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 target.com with good reviews for a third as much as the one on potterybarn.com, 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.
If you are a credit card user for small purchases (and pay it off every month) for the purpose of getting points another great resource is http://www.mint.com. It auto catagorizes your purchases (you can do it with cash but it requires more manual upkeep) and tracks against your budget. All the pie charts as to how much $ goes where and bar charts that show your spending over time or as compared to people in your geographic region, really help to put things in perspective.
Another tip, if you can’t break the “pick up dinner from the local restaurant” habit (like us) splitting one entree and pairing it with a cheap bag o’ salad from the grocery store can cut cost, and calories. :) Happy saving!
What a delightful and refreshing post! With the state of our economy it’s nice to know there are at least 2 other people out there who really get it. It’s no coincidence that our economy is in the dumps and people’s spending levels are at a record high. People are going to have to wake up before things level off but hopefully the last bust was a wake up call for many. Congrats to you (and your parents) for understanding money, savings, and frugality!
I love this post. I just wrote a post about how “less is more” so it must be on everyone’s minds. It’s nice to be encouraging of a thrifty but comfy lifestyle–my husband and I definitely never buy something on our credit card that we can’t pay for in full, but we love using the card to get our rewards. We’re also a one car family and our nice meals out are usually In N Out Burger. :)
Lauren @ chezerbey says
We bought a fixer-upper in a relatively expensive city (Seattle), so we sort of volunteered for the frugal lifestyle! But we’re putting our money into what we love and have convinced ourselves that if we had just kept renting, we probably would have blown the extra money on trips, going out, clothes, etc. =)
We’re getting ready to start a big remodel project and have found that planning ahead makes a huge financial difference. When you’re in the middle of a project and tired you’re more likely to just throw down the credit card and do whatever it takes to get things done!
Love this post. This is such a hard thing for so many people ( me included )… it’s great inspiration to pinch those pennies.
I am going to show this to my daughter and her soon to be husband. They moved 1800 miles away from their hometown, secured jobs (just out of college), saved for 9 months and just purchased their first home on the west coast! The first time homebuyer credit did help them, but they put down a decent down payment on a home they can afford on one income. Unfortunately, my future son in law takes alot of mean spirited ribbing from his co-workers as he declines restaurant lunches in favor of brown bagging and partakes only occassionally in evenings out for drinks. They also have a substantial savings account in spite of re-paying student loans. I could not be prouder of these two, they do not come wealthy families, but are on the right track. I tell them that while their twenty-something co-workers are squandering their futures, they are securing theirs.
Hi Guys! Thanks for the great post. I am an engaged girl and we will be living on my salary for the next three years while my fiance finishes school. We tend to be good savers, but it is nice to hear your tips. Keep up the great work and a big thanks from an avid reader!
Mary B says
Amen and Amen. You guys have the ticket! My husband and I are climbing our way out of debt, and I can’t wait to be able to pay cash for our next car. Our current cars WILL be driven into the ground… one already has 190,000 miles on it, and I expect it to last a while longer.
Way to be frugal, and sharing your thoughts and ideas… thank you!
I am a HUGE proponent of living below your means. The best way my husband and I have managed to make that work…don’t buy a house at the top of what you can afford. We were approved for a $300,000 mortgage and told that’s what we could afford based on our salaries, but we bought a house roughly half that. Because of that we have a lot of wiggle room in our budget to save up for things or to just have fun now. Our house may be small, but it’s totally worth it to not feel stressed by our budget!
Kasey at Thrifty Little Blog says
I’m like you and was lucky to grow up with money smart parents… who knows where I’d be if they went around charging up large credit card bills and taking extravagant
vacations! Because of them, I’ve been a saver and thrifter almost from birth.
As for my money saving ways, I could probably write an entire blog about it… ;)
Thanks for this post, it is so inspiring!
Jennifer D. says
I loved your comment about Richmond being a less expensive area to live in. My husband and I moved from the Baltimore area a few years ago because there was no way in heck we would be able to live within a comfortable budget and purchase a house in an area where the cost of living was higher and still left a lot to be desired.
We made the move to Richmond once I was hired to work at my alma mater, played our cards right, and a year later we were able to purchase a home in the southside which we love and there isn’t a day that goes by where we aren’t thankful for the opportunity to live down here.
You offer a lot of great tips and my husband and I think very highly of you both (i.e. you two ROCK).
Great post! Very inspirational and helpful. Thanks.
BTW: I saw you in town at the Carytown Starbucks before the race. You are the most adorable pregnant gal. Almost made me want to try for a third…Almost.
No way! That was totally us. Did you see how our family actually brought homemade banana bread to Starbucks and sat there eating it while we met up to exchange bib numbers and get ready for the 10K (ok, and some other relatives purchased coffees and snacks there too). Cheapness runs in the family! And Starbucks is a great place to gather before getting caught up in the zoo down by the race’s starting line.
Great post! Good to know we’re not the only ones who live that way. We also do the at-home dinner thing, except once a week when we go out for a special date night. We’ve found that by cooking at home we save so much money every month. Another way we save tons of money is by not having cable. We have digital television that we use (we get Fox!), and have Netflix where we can stream/rent just about any movie/show, so there’s really no need for us to have cable (although I do miss HGTV!). :)
Sherry- I’d love to see a few more of the easy, no-fuss meals you guys frequently eat. I think this is one way to easily save a ton of money but I’m always running out of ideas!
Sadly we’re definitely not chefs (not by a long shot!) and this blog is really dedicated to our true passion: home improvement and DIY. But we do find a ton of amazing recipes here: http://www.youvegotsupper.com/
Brittany Gegan says
I love reading your blog, and am constantly inspired by you. However I was always wondering how you managed to afford to make your home so incredibly awesome. My fiance and I are in the process of buying our first house now ( we should close on it mid april :) )We were both feeling overwhelmed with how much we wanted to do to fix it up, and what are our priorities as to what gets done first. As well as how we could find the funds for not only home renovation but also buying furniture which we are lacking. I have indeed been hunting thrift stores for furniture that can be refinished, but you definately gave some awesome pointers or things you do that I think could definately help us out. Eating out is a big thing. Eating lunch out at work daily really does add up, and though we say we are going to stop it never seems to happen. But thanks to you I feel more motivated to make an attempt at cutting back and being more frugal. Thanks for allowing us readers a glimpse into your life and how you manage money!
Cash is the king at our house, as well. We pay cash for everything – from cars, to groceries (yes, with envelopes) to furniture. I’ve found I usually get better deals on higher ticket items when I have cash, because it provides an incentive for negotiation. The only debt we have is our mortgage, which we’ll pay off in 5 yrs, start to finish. :)
This is only one of the reasons I love your blog! I have done the spend, spend, spend, and lived with the credit card payments in the past. I can’t say that I do as well as you two, but I don’t do to bad. I am a firm believer in the “envelope” system. I still use credit cards occasionally, but work had to payoff if I have to and definitely take advantage of 0% interest offers. That is how I bought my couch and love seat and some major purchases at Lowe’s. Hey, what’s one more envelope!
Also a big believer in waiting. Sometimes the excitement of a new find is better than actually having whatever it is. If you walk away, but are still thinking about it a week or two later, then go back for it. Really think about where you will use it too. There are plenty of things I am still thinking about that I either don’t have a place for, or it is long gone. But that makes the next find so much better! We are planning our wedding right now and have been saving, saving, saving. So far, everything has been paid for with cash. I do plan to put the reception dinner on our Discover for a little cash back bonus, but we already have the cash put aside for it.
Am absolutely amazed that you were able to save for the car and pay in full. I will need a new one soon and don’t think that will be one we can do in cash. But, I want a significant down-payment before I go shopping for new wheels.
Thanks again for sharing, not just your home decor style/advice, but your lives too!
Sara @ Russet Street Reno says
Well, I’m glad that you have found a way that works for you. I think it’s very important for everyone to figure out their own perfect way to save and be thrifty. I would rather have a car payment and enjoy twice-weekly Starbucks and weekend dinners out. That is something that makes me enjoy life more, so that is a trade I make. However, I fully believe that no one should EVER pay interest on a credit card. I haven’t paid cc interest for many years – after college I wised up!
It’s so refreshing to hear some really realistic money tips. I think we all suffer a bit of envy now and again when we see a friend splashing out on something but I wonder how often they have the money to do it and how often they’re up to their eyeballs in debt (and I often think that when seeing house tours in decor magazines).
Kudos to you both!
Brooke H says
Thank you for the great post! I’m totally with you guys on the virtues of living below your means. My husband and I are like you in that we make below the average and yet seem to have a higher quality of life than many of our peers all because we look for ways to save our pennies. Some people seem to be in awe of the fact that we are debt free and have nice things, but it really is just as simple as you stated it above. It is not worth it to us to have to buy anything we can’t afford at the time we buy it.
I don’t know whether to be encouraged or depressed. We have friends who have successfully saved the way you two have, and they’re (honestly) kind of glib about it. They were able to build up a cushion by living in a family home rent-free for 3 or 4 years, and I think that would make it easier for nearly anyone.
Did you have a home equity loan when you first bought? I remember a reference to a few of the big-ticket things you did early on and wondered how those fit into your budget.
For myself and my husband, we have staggering student-loan debt (it’s consolidated and well-managed, but still there), and it’s hard to break a pattern of debt when two cars are a necessity and our to-do list for home improvement is quite long. We’re doing cheap aesthetic things (painting and textiles) while looking at new windows and insulation within the next year.
We need all the luck we can get, but I’m glad to see it’s possible to enjoy life and make a house awesome while doing it.
Nope, no home equity loan for us, we just paid less for our house than most people do (seriously, it was a wreck) and also put down as much as we could to make our monthly mortgage payments extremely low (which allows us to save up for things a lot easier than if our mortgage were a lot each month). We also didn’t take on any big projects (like the kitchen reno) for a few years (we bought four years ago and did that reno two years ago), so while we did paint and knock out dividers and rip up bad carpeting in the beginning, those were super simple and affordable undertakings (along with laying peel and stick tile or hanging curtains). And we actually found that living with the house for a while before diving into the more pricey projects helped us to see what we really needed to change so we could make it more functional than if we had jumped into ripping out the kitchen the day we moved in (and charged all that to a credit card that we couldn’t pay off). We actually did put some of our kitchen reno on a Home Depot credit card because it was interest free for a year, but we still hated that hanging over us so we ended up paying it off four months later, just to be done with it. We really do hate debt!
Love the post and the blog! We are gearing up for a kitchen/living room renovation this May. We are not rich by any means, in fact we are both active duty enlisted in the Navy; and with two small children our money is tighter than a circus tight rope! We saved 12k for the remodel and after all of the research on prices, and even $1500 for the unknown we are coming in at 10k! This is including 800sqft hardwood floors (thank you owner/friend of floormall.com!) all new stock cabs that we are finnishing ourselves, new countertops, 2 new appliences – and all the work being done oursleves! It will be a lot of hard work, frustrating moments, but the result of a new kitchen/living room and not going into debt is priceless!
I was wondering what yours and John’s theory is on TV? Do you pay for it, do you watch it online, or are you even TV watchers at all?
Thanks so much for your continued dedication to your blog and also these extra posts that give us helpful tips in non decor areas too!
We do watch TV and we have cable. It’s not a free hobby by any means, but it helps us decompress after tons of DIY projects and sale hunting so we just worked to fit it into our budget (again doing things like making lunches, cooking at home, giving each other haircuts and having one car helped us fit it in). And we know if pennies ever get tight it’ll be one of the first indulgences to go since it’s definitely a “want” and not a “need.”
Would you share what bank you use for your high-yield savings account? I presently stash away nearly 20% of my paycheck into savings and we use ING Direct. It’s online, so I can’t go to the ATM and make a quick deposit in a moment of weakness, and I’ve been very happy with their service. But in this economic climate, the rates haven’t been as high as they used to be so I thought I’d see what other people are using.
Thanks for sharing your strategies!
We have actually been told by our accountant that we shouldn’t disclose that info to people online, but it’s a well known high yield savings account and although the rates aren’t as high as they used to be (it seems as if all of them have fallen for a bit) it’s definitely better than keeping all that money in an interest-less checking account. Hope it helps!
I love your blog. Today’s post brought back memories to when my husband and I had no children. At that point in our lives, we were debt free and paid for everything in cash. Four kids later- with more expenses than ever- we’ve strayed away from that a bit. Your post re-lit the fire under my but to live like that again. Thanks!
I need to give a shout out for Suze Orman who is much more comprehensive than Ramsey. And I need to say “dollar cost averaging in a low cost (Vanguard)mutual fund that follows the S&P 500.”
You should also try using tomato juice (with garlic) instead of sauce for your shrimp pasta. It’s much lighter and ‘springy’ than its wintery tomato sauce counter part.
Barbara the CT Granny says
This is probably the most valuable post you have made and you have made a lot of good ones. You prove, day after day, that it is possible to have a lovely home and not be in debt. I can only make one suggestion that might help some of your readers: open a money market account and deposit each month one twelfth of your real estate taxes, one twelfth of your total insurance costs, plus an amount for things that go bust in the night. I also set aside an amount each month for travel. Then, when these larger bills roll around, you don’t have to scrimp for a month or two to be able to do what needs to be done.
Thank you! This post was so timely with baby #3 on the way for this stay-at-home-mom! I even went back and reread all of your other posts on savings. It is so nice to know that other people try to live similarly to us. Thank you.
OHHHH MMMM GEEEEEE!
y’all are two of the cutest lil’ tiny tots, ever!!!
sherry, my eyes are watering at you…such a lil’ peanut with your smile ;)
first of all, my dad is UBER frugal and my mom’s mother is too! they were both HUGE advocates in my life of saving, buying only things you can afford! great life lesson to learn early on…in addition to the value of a dollar through hard work via our chore list :)
CC hubby is actually quite the self made mad and grew up on welfare and has had no one in his life to sit down and explain finances to him. he’s BEYOND generous and would buy everything in site…but we make a good team and it’s a good balancing act!
isn’t that what marriage is all about, right?
we practice MANY of the same frugal habits that y’all do over here at CasaCullen so a big cheers to smart cookies like all of us :) xo and such a great post!!!
After reading some of the other comments I want to add that you CAN be at home with the kids and no car. It works. We just plan our days we want the car (usually only once or twice a week) and we drive dad to work on those days. Other days we stay at home all day or walk to where we want to go.
Erica Cummings says
Loved the blog today, my husband and I try to live the smae way :)
Best post ever. Some of the smartest advice to others and best way to manage your finances. Its fabulous to be car payment free but also makes no financial sense to finance something that depreciates. Goes for credit cards to.
Pay as you go. Only leverage yourself when you it is to make more money than the finance charges would cost you, rare unless you are a business owner.
Great post, its amazing how inexpensively you can make change and you guys do a fabulous job at showing how its done!!
Kim at Yellow Brick Home says
This was a great, informative post – thank you!
When it comes to saving for vacations, the hubs and I make use of the envelope system. It seems so gratifying to see the cash in our tucked-away envelope, and we’ll add $20 bucks here and there if we skip a night out on the town. If we start saving a year out, we really see a big wad which makes us VERY happy. We have less guilt while on the vacation and can just really enjoy ourselves!
Thanks so much for a truly inspiring post! You guys are amazing!
One thing I find that people often forget is to actually DO THE MATH. For example, I bought a new car a few months ago. I had plenty of savings to pay cash for it, but with a little haggling (and my good credit) they offered me a 0.5% interest loan. I earn significantly more than that where I keep my money, so it turns out I’m SAVING money by getting a car loan rather paying for the whole thing up front. I get to keep my money for longer, in a place where I’m earning way more interest than I’m paying the car loan people. The numbers aren’t HUGE (it’s just a car, after all, not a house), but still! :)
Of course, depending on the interest rate you’re offered (which seem to often be horrible for some unknown reason), this may or may not be a good plan. But it’s definitely worth checking into!
Such an inspiring post–as usual, but for a different reason! It makes me so happy to hear about other young people who are successfully avoiding debt. I appreciate your honesty and that you are so careful with your money. It’s hard for most people (including myself, often) to realize how much of what we spend really isn’t “necessary.”
For people that like “how to” guides and self help books (my friends tease me about this…), I alway recommend Ramit Sethi’s I Will Teach You to Be Rich. I prefer books for something like finance, but he has a blog too. I learned so much from that book–even if a lot of it was common sense–and we totally revamped our savings system because of it. The most effective change for us was automating everything possible. After we get our direct deposit pay checks, it automatically sends money to our “Down Payment,” “Savings” (for emergencies), and “Self Gifts” (like furniture, a new laptop, a bike, etc) accounts, which are also in a high interest online bank. Our credit cards are also automatically paid off completely each month, along with most of our bills. So much less stress!
Things have been a little tight since we got a dog, though, so we’ve still got plenty to work through! Hopefully that expense won’t be as jarring now that he’s been neutered and made it through most of his big puppy appointments… I hate being worried about money!
Christine Schwalm says
I’m also a fan of mint.com. It is a great way to analyze your spending habits. I was spending way more on food than I thought. I also have an ING account that automatically deducts money for my savings account. I don’t think about it at all and then I log on once a month to a pleasantly higher balance.
i am totally moving to virginia! yea right i wish! L.A is so expensive…and it doesnt help that i suck at budgeting. but im gonna totally try! because i want my home to be as pretty as yours :)
Great post. I will add that things will change when you have kids! :) I myself am a very careful budgeter; however, kids cost money and that really made it more difficult for us. I’d be interested to have another post from you once you’ve had your little one for a while and how you’re keeping up your “frugality” (is that a word?). :)
Yup, we already have heard that request a few comments back, so we definitely plan to update everyone when the bean comes along! Stay tuned…
My eyes typically glaze over when money is mentioned, but you managed to make this post entirely readable and understandable! My husband and I are on the Dave Ramsey bandwagon, and your advice is much like the suggestions he offers. Although my husband is in law school (just one more month to go!), we only have student loans and one car that need to be paid off. Your post has reinspired me to stick to my guns. Ramsey’s favorite phrase is “Live like no one else so you can live like no one else,” and I love that you guys are an example of that. Thanks for inspiring!
We tend toward the frugal at our house as well and do lots of things on the barter system. (I sew costumes in exchange for my girls dance tuition. It saves us about $1000 per MONTH!)
I don’t know if your library has this program, but our library has cultural passes that you can check out for free. They get you into various museums, gardens, sight-seeing destinations around town for free! :)
Very insightful, thank you. For many of us who are lucky to make more than the minimum to scrape by, I think so much comes down to just one word: priorities.
My husband and I consider ourselves very lucky to own a home in the San Francisco Bay Area. But like you, we only have one car, we pack lunches, and our idea of a fun day out is a trip to the library. And we never even got around to having cable TV switched on; $10 per month at Netflix is all we need.
Everyone makes different decisions and if we really stop to look at all those things which modern marketing has told us are ‘necessary’, I reckon most of those must-haves are optional.
My suggestion is at the grocery store – we all have those little savings cards – when I spend $64 and my receipt tells me I saved $8.79, I IMMEDIATELY take $9 cash and put it in an envelope. That’s how I bought drapes for the bedroom fabric to recover the windowseats, etc.
AND my new trick? Every $5 bill I get goes into an envelope and monthly I deposit them in a savings account I don’t have access too online and I have to go out of my way to get to – since October I’ve saved $500 in $5 bills!!! Yes, sometimes it means breaking another $20 for a cup of coffee, but just think – THAT’S another $5 saved when they give you $17 back in change!!! I must give credit where credit is due – I read about this idea on some guy’s blog – he couldn’t afford vacation once they became a one-income family, with a baby, so he saved his $5 bills for a year and had $2000 to take the wife and child to Disney! That was my inspiration!
Thanks for the great post!
My husband and I are chipping away at our debt (years of frivolous spending that we wish we could un-do…we are getting there!) and are now on an all-cash system. No more credit cards..ever. We’re just better off without them now that we know the damage we can inflict with them.
We also saved up for our mattress purchase—Tempurpedic—some things are just worth the extra dough!
Such helpful advice. I love that I can learn so much from you in so many ways. Thank you both.
Fantastic Post! It is refreshing to hear that people are actually saving and living beneath their means…and in the process remodeling and redecorating (in your case, mine would be just decorating). Thanks for the encouragement.
We are totally on the envelope system for grocery money (you would be amazed at how much less you spend when you know thats all you have for the month), eating out money (including coffee), date money, gift money and gas. It has been a huge help!
Loved this post! My husband and I do many of the same things…but bc we rent in Brooklyn, NY we really don’t put money back into our place. For the first two years of marriage we decided to pay off our student loans. We started having potlucks with all of our friends bc we couldn’t afford to go out to eat. After the student loans were paid off- $30,000 (that was basically one of our salaries at the time) we decided to beef of the savings account and start a vacation fund. So instead of DIY’ers we are vacationers! Last year we went to Italy for 2 weeks and had the time of our life (we were frugal once we got there)- went to buy cheese, bread, and wine and ate in our rooms. We also brougt playing cards and would just sit in a little square and people watch!
the best thing about being frugal is not getting in trouble when unexpecteds happen– ie my sweet pup needed surgery last month for $1500. It’s nice knowing that we won’t have to worry about rent or were our next meal is coming from bc we plan well….
Kuddos to you both! Can’t wait to meet your little girl in less than two months!
Great post! I am inspired by your frugality — totally agree on the eating out thing — we had some bad habits that stemmed from husband being able to expense 90% of his dinners when the economy was good… well folks, it’s not 2006 anymore. We found that we actually like cooking and it’s a nice way to spend quality time together. Anyway.
Here’s our frugal tip —
It may not work for everyone, but when the right opportunity arises, we use credit to our advantage. When we moved into our house, we needed lots of new appliances (washer/dryer, dishwasher, fridge) because it was a major fixer and the appliances were either missing, or in terrible disrepair. While we had the money to pay for them outright, Best Buy was running an interest free for 36 months promo. So — we kept our cash in the bank earning interest and pay the Best Buy in installments. Doing that allowed us to remodel our bathroom much quicker than we would have otherwise, which makes me very happy.