How We Stay Debt Free & Save Up For Purchases And Projects

Q: You really should consider posting about how you two budget and save for your purchases and DIY. I’m constantly amazed at how you seem to never charge anything and how you consistently mention saving up for things. Now just tell us how you do it!! What about making the decision to replace something that still works? Is that a hard call for you guys? I never know when to live with something, replace it with something semi-cheap for the interim or save up for the big thing I actually want and go right to buying that instead of putting money towards a placeholder while I save. I’d love to know more about how you know when to save and when to splurge and how you live such a debt free life full of projects and home makeovers! -Barbara

A: First and foremost, John and I are super lucky to each come from families with famously frugal dads. So we both learned all about saving up for things, paying off our entire credit card balance, and never buying anything that we can’t afford on the day that we buy it. Of course it takes a decent amount of discipline (and it means that we’re constantly walking away from great deals & lovely things), but if we can’t afford them they’re not such good deals after all. So to honor our dads, we thought we’d post embarrassing old photos of them. Notice John’s dad’s tie- it was a Father’s Day gift John made using puffy paint… proof that paint doesn’t always make something better.

It’s funny because a lot of our stuff falls into the “simple and affordable” category (our dining table was around $150 from Target and we have a $25 thrift store chair in our den and a $30 consignment shop coffee table in the living room). So that really helps us keep money in the bank. We don’t believe in buying chintzy low-quality stuff to save a quick buck, but if there’s a chunky wood dining table at with good reviews for a third as much as the one on, we’re likely to go for the thrifty Tar-jay version (we’ve had our current dining table over three years and haven’t had one complaint yet).

But although we usually shop around for the best deal (and read reviews to be sure we’re not seduced by a lemon), every once in a while we do fall in love with the notion of something pricey and save for it like crazy (like our plush organic mattress or the new 2009 Altima that we saved for over the course of the past few years and then paid for in full on the day we drove it off the lot). But more on that a bit later. Basically, the key to our financial approach really is just to hold out for sales, use coupons, shop around, and aim for affordable items to mostly fill our home- and then devote a sliver of our savings to spendy stuff here or there (so we don’t feel totally deprived but also don’t drain all that money that we saved up overnight either).

Oh and living in Richmond helps! The cost of living is waaaay lower than it was in Manhattan, so years of dealing with those insanely inflated expenses makes it seem a lot easier to cut costs and save money here (since our mortgage is half of what we used to pay to rent two tiny NYC apartments). Our house was also completely affordable since it was a total fixer-upper (as in: less than 200K, you guys have seen the befores!). So we knew we could afford to put money towards fixing it up since we didn’t spend it all up front by purchasing a newly renovated casa to come home to (and since our monthly mortgage payment is a lot lower than it would have been for an already gorgeous new home in the area).

We also try to be frugal in other ways like by sharing a car, getting books from the library, making our own bagged lunches, and DIYing whatever we can (from tiling to haircuts) instead of paying an expert (you’ll see some links to other how-we-save-money posts at the bottom of this one). It’s not always glamorous, but the old a-penny-saved-is-a-penny-earned adage really rings true to us. So instead of making lots of money and spending it just as quickly, we choose to do what we love- aka: blogging- but live comfortably on less with a few simple switcheroos like haircuts at home and one dollar spaghetti dinners.

As for what we do when it comes to replacing something that works but still bothers us (like a functional old fridge that’s big and yellowed and probably not terribly energy efficient) we just save our pennies up if it truly makes us cringe. Once we have enough to actually afford a new one without putting it on a credit card that we won’t be able to pay off right away (which makes us feel so guilty that we wouldn’t enjoy the spurge) we go for it. Oh and we always sell the working thing that we’ll be replacing on Craigslist so we don’t send it off to a landfill. Plus then we get a bit of money for it (which we can mentally put towards our upgraded version, so it feels even more affordable in the long run).

We’ve learned that in our case it’s never smart to buy something cheap for the interim just to tide us over because we end up hating the fact that we spent money on something that’s just a placeholder for the real thing that we want (and we would rather have waited and put our money towards the forever-item instead of some temporary solution). This is a personal thing though, so if replacing your cringeworthy chandelier with a $50 version from Home Depot will help tide you over while you save for the $250 beauty that you’ll love forever, then it might be the best approach for you. Just think about what makes you happy and what you can honestly afford and try to weigh the pros and cons to come up with a plan that feels right for your situation.

We also always talk a lot before taking on a major room makeover to be sure that we’re both on the same page about how much we’ll spend. For example, after a lot of chatting and number crunching we guessed that we’d spend 3-5K on the bathroom remodel- and were totally surprised when we got it done for $1800 by doing all the labor ourselves and hunting down some amazing deals. So in the case of the big bathroom reno, we saved our pennies until we had 5K sitting there in our high yield savings account and ended up super happy to just spend the 1800- which meant we could move on to our nursery makeover with extra funds already on hand… which is always a bonus!

We actually find that we overestimate things a lot more often than we go over our budget- which we’re very thankful for- but we still like to save up all the money and make sure it’s in the bank just in case we don’t come in under budget (it would be super stressful if we only saved two thirds of what we needed for a project just because we assumed we were overestimating again). Oh and there’s a bonus to having our renovation dollars in the bank before we start. We’ve found that it takes a lot of stress and anxiety out of the equation, so the project is a lot more fun.

Take the nursery makeover for example, we went into it thinking that we’d spend around $1500 since we needed totally new furniture and accessories (like a crib, mattress, dresser, chair, ottoman, rug, curtains, chandelier, lamp, art, etc). But thanks to some deal hunting we’ve actually done everything from scoring a $20 thrift store chair and a $20 Craigslist dresser to hunting down a clearance rug and chandelier- which makes us confident that we’ll get ‘er done without reaching or exceeding our budget. Who knows, we might just come in substantially under if we’re lucky. It really does pay to spend the time pounding the pavement for the best deals and trolling places like Craigslist for solid well made furniture that you can refinish (a lot of which is much better quality than the cheap stuff that companies churn out today). See how the Craigslist dresser below turned out after we made it over with some stain, some paint, and some elbow grease.

All told, we probably spend between five and ten percent of our total income on home improvements (not bad considering that we’re pretty much constantly painting something or pulling up at Home Depot). But that’s just a rough approximation and it’s a really personal thing so each family should look at their bank account and their house to figure out what budget and home improvement priorities are the most important to them. Plus it’s kind of our job now (since I’m a full time home blogger we need to constantly take on projects to sustain our site). So because it’s such a high priority in our life, we go out of our way to save a lot of money in other areas, like by having just one car that’s fully paid off.

We drove a ten year old Maxima for four years with over 170,000 miles on it until we could save enough cash to fully pay for a safer-for-the-baby 2009 Altima, which we did a few months ago (yeah, that was a fun day). So making sacrifices and cutting costs in other areas has allowed us to save money which we use to pay things off completely (instead of continually laying out cash each month for a car payment or a credit card bill that we just can’t squash). And of course we do save a bundle on the transportation front by making the decision to be a one car household, so we can save all the money that might otherwise go towards purchasing, insuring and gassing up a second car.

We know the way that we save and pay things off is rare. And we know that there are probably people reading this post who have no idea how on earth two people like us could save up for renos before we do them or pay off a new car the day they drive it off the lot (hint: it’s not because we make a lot of money- in fact by national averages we fall way below the average income level, even in our area). So we’ll share this factoid about our spending habits. We’re insanely frugal in many areas where other “normal” people are not. A nice meal out for us is a once monthly trip to Chipotle. We probably spend about $10 a month on clothing (combined, and some months it’s zero). In fact I’ve spent less than $20 on my entire maternity wardrobe (thanks to generous friends and family members who have passed their leftovers my way). We’ve even begun to make our own cleaning products to save more money in that area and we already mentioned that we give each other haircuts instead of paying a professional.

So before you think it’s totally impossible to save a few hundred dollars a month towards some big reno goal or some dream furnishings that you’ve had your eye on, consider whether you can cut anything out at all (from that Starbucks coffee to that monthly haircut). And if you want to save even more, try going a whole month without buying clothing or going out to eat. All of a sudden you’ll see that it’s not that hard to save money once you really decide to make a major change. Heck, you can even downgrade from two cars to one (and start carpooling or riding your bike). Or you can even sell your expensive vehicle for something a bit older with more miles on it (trading car glamour for house glamour isn’t a foreign concept to us since we drove our last car into the ground and sold it to Carmax with nearly 200,000 miles on it when we finally had enough saved up to replace it).

In general our advice is just never to spend beyond your means and to take the time to save for items and projects that are truly important to you… instead of frittering away funds by grabbing a bunch of cheap accessories (but they’re on sale!) that you don’t need every time you walk into a store. Resist the urge! Really, if we don’t have the money in savings that we’re talking about spending then we just don’t spend it. Instead we use paint and other items that we already have around the house for some free mini makeovers to tide us over. And we’re always sure to take our time hunting down the best deals while our savings account grows (even doing things like hosting a garage sale or selling unnecessary items on Craigslist to make money to put towards our latest goal). And it seems to work for us- so we certainly hope that it does for you guys as well. Happy saving (and smart spending) to you and yours!

Oh and we’d love to hear how you save your pennies (any envelope system peeps out there?) or how you live well on less income. Share and share alike!

Pssst- To learn more about how we pinch pennies here at Casa Petersik check out our Save It series (read Part 1 here, Part 2 here, and Part 3 here) and find even more money saving ideas right here. Oh and this post about living with less (along with this one and this one) might help too.


  1. Sophie says

    I love your penny pinching tips! We always pay off our credit card off every month, and we auto-deposit a portion of our paychecks into our savings accounts… for somebody who doesn’t have the strongest will, this is what helps the most.

    Just out of curiosity (please forgive my nosiness), once Baby Petersik comes who gets to keep the car during the day?

    • says

      Hey Sophie,

      Good question! John will be taking a nice long paternity leave so we’ll both be home with the car and the bean for a while. And once he goes back to work we’ll probably just play it by ear (since some days a friend or family member will visit so he can take the car, while other days he can carpool with his sister who drives right by our house and also works downtown). Hope it helps!


  2. says

    As my husband and I are planning to purchase our first condo just across the Hudson from NYC (it’s so expensive in this area! but we both work here, love the city and our families are here), these are great tips to keep us on track to saving up for things to come! Thanks for sharing…inspiring as always!

  3. says

    Thanks for such an inspiring post!

    With only one full-time income in our household {I work from home} we find all sorts of ways to cut costs and save pennies… it’s surprising how easy it is to move from ‘want it, so buy it’ to waiting & saving up!

    My big money saving goal for this year is that we’re planning on buying a small chest freezer to take advantage of fabulously low prices on in-season local produce. I plan on freezing large batches to have on hand throughout the winter and next spring. We’re big on eating healthy so this will make a major difference in the grocery budget!

  4. Dena says

    Aside from our mortgage, my family is also debt-free. I switched (3 years ago) to a weekly cash budget for groceries & household items and it has really helped me. Another key for me is that for everything that goes on my grocery list I ask myself if I can wait one more week before purchasing it. It may sound silly, but it really helps!
    I would say the keys to saving wisely and spending wisely is in knowing your spending habits–be brutally honest, often it’s those little things (like coffee) that pack a punch! And creating a budget. The other key that many don’t think about is thinking about what you truly NEED and what you simply WANT. More falls into the want category than you realize. It doesn’t have to be that new cd you’ve been eyeing. It can be the 3 different types of potato chips or 5 different types of snacks for school…when 1 bag of chips and one type of snack can get your family through this week.
    It isn’t always easy, but it is so freeing and greatly helps the stress quotient to be debt free. I wish more people would try it!

  5. says

    What a great post, you guys!

    My husband and I just participated an Engaged Enrichment day in which we gave a talk, twice, called “Finances & Freedom.” Our basic principles are by no means new, but by every means good for the marriage and good for the bank. If I were to summarize, I would say these include:
    1. Cash envelope system (we saved $500 this month alone by not spending it all) on all our flexible spending such as groceries, entertainment, gasoline, home improvement, dining out… while everything else is automatically withdrawn from our checking, like netflix, car insurance, mortgage, etc.
    2. One shared car (I walk the mile+ to work)
    3. No TV (good for SO many reasons, wink wink)
    4. Never spend what you don’t have
    5. Never carry a balance over on a credit card
    6. Everything is a joint account–no money is owned, cared for, or spent by one spouse without the other having the same access and responsibility for it.
    7. Savings off the top of our net income at 10%, plus an additional $150 toward our mortgage.
    8. Tithe off the top of our net income at 10%.

    So we really only use 75-80% of our income each month. And even that goes into short savings projects like a new chandelier, a new couch, carpet under the table, etc.

    I wish more youngsters thought as you do. There is something so FREEING in not being a slave to constant spending.

    Hear hear to you!


  6. says

    we’re along the same lines as you guys, although our “house rules” aren’t so strict as yours (we definitely go out to eat more than just once a month). we find that there are a few things that help us save instead of splurge:

    asking eachother “do you REALLY need that” or “where would you use it/what would you do with it”. unless the other person can come up with a good enough response to convince the asker, the item goes back on the shelf.

    having a larger goal in mind. it’s really easy to put back the $40 blouse and not go out to eat every other night when you’re saving up for something big! “do you really want that [item], or would you rather be $[50] closer to owning your own [big ticket item]?”

    we LOVE our local ALDI! they’ve saved us a BUNDLE. even though they don’t have everything, it’s still a time and money saver. we go in, get whatever we need that they carry, and then what’s left on the list we pick up at the Publix that’s a block further down the road.

    one final thing we do is to periodically track our expenses/income. it really helps if you have a handle on exactly how much you spend on gas or eating out. every couple of months we tally up the expenses from the previous month and then separate them into groups like gas, food from grocery stores, food from restaurants, home improvement expenses, utilities, etc. we’ve managed to save $100/month after tracking gas expenses showed us that we could save by deciding to drive around town together in my 27 mpg, regular unleaded fuel sipping small sedan instead of my husband’s 19 mpg, premium fuel guzzling giant sedan.


  7. says

    Thanks for being honest and sharing about your finances. We’re the same way – absolutely no credit card debt and lots of saving up for projects. We were absolutely thrilled to build our garage for 10k and pay for every last nail in cash. Of course, we also saved ourselves 25k (plus!) by doing it all ourselves, but I think that’s just another money-saving strategy.

    Congrats on the new car! I love seeing other people who are committed to staying away from car loans. It’s hard to save for that long but so worth it in the end!

    I’m inspired to go squeeze some more pennies out of our budget! Thanks so much for such an inspiring post.

  8. says

    I’m another Dave Ramsey fan – debt free and living in financial peace, so it’s so nice to see others extolling the virtures of living within one’s means. You guys really are inspiring!

  9. Jennifer says

    Great post! We live way below our means and have no debt, which feels great! We’re currently saving up to buy a home, whenever that may be. We have almost 20% of the listing price for the low end of our price range, so we’re really making progress!

    I use coupons and match with sales to keep our grocery budget incredibly low. We do in-house haircuts, homemade cleaning products, no cable/satellite, no texting, rare entertainment spending, and no home improvement projects since we’re in this home temporarily anyway. I’d like to fix up a place someday and love your site!

  10. Katy says

    I have to ask. How did you learn to cut John’s hair? I won’t let my husband anywhere near mine, but I have cut his a couple of times, and we always end up getting really frustrated and buzzing it off with a larger guard. I don’t really know how to “cut” it, just clip it with the clippers. Tips?

    • says

      Hey Katy,

      I actually use real hair cutting scissors and my fingers (no clipper) to cut John’s hair just about once a month. I don’t really know how I learned but I used to cut my brothers’ and cousins’ hair growing up… and by the time I was in college I was cutting a ton of people’s hair in dorms (girls too, but guys are cheaper so they loved free haircuts- making them my best “customers”). By the time I met John I was somewhat of a pro and I actually first cut John’s roomate’s hair (back when we were just friends) which made John think I liked him (ew!). So I guess that gave John the courage to offer up his hair to me and I’ve been cutting it ever since. To roughly describe my method, I just use the middle and pointer finger on my left hand to pinch his hair vertically all around his head and snip off the extra that sticks out beyond my fingers (so it’s all the same shorter length when I’m done- about the length of my finger pincher thing). Then I leave it a little longer around the top (two fingers-ish) and give him a good trim around the ears and shave his neck. Hope it helps!


  11. Elisa says

    I read your blog everyday. My husband used to think I was nuts, but then last night I caught HIM looking at your House Tour page! Anyways his question is: Where do you guys work? I know the blog is a good part of your income but I think I remember reading that John has another job as well.

    • says

      Yup, the blog is my full time gig and John works downtown at an advertising agency as an account manager. Of course he puts in well over 20 hours a week on the blog beyond his 40 hour work week in the corporate world, so he kind of has two jobs going on these days! My hero.


  12. says

    I’ve always been impressed by your patience and ability to save for those large projects also! Great post! I’d love to read more about how you guys saved for the baby also. What type of supplies you’ve bought before hand, etc. We ourselves are currently thinking about kids and we are also frugal. Someone once told us that having a kid sets you back financially about three years and it would be great to see how you guys planned it!

    • says

      Hey Melinda,

      We’ll have to answer that question after having the beanette here for a bit. We have definitely only registered for things we need (nothing frou-frou or extra since our small house makes storing all that extra stuff a pain anyway) and our friends and family have been incredibly generous to donate their extremely gently used hand me downs along with purchasing a lot of new items for us from our registry. In fact, so far we really haven’t spent that much at all (under $100) on baby stuff. And I plan to breastfeed and we’re using cloth diapers so those two choices should help us save some money as well. Stay tuned for more details while we learn as we go…


  13. says

    I really enjoy your blog and always feel that I learn something. Today is no different. You are so wise to be so young. Your parents taught you well. In this day and time, I think we all realize that we have to change how we live if we want to continue to be able to survive.

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