This year I made it one of my new year’s resolutions to pay off some major debt. I had some naughty credit card debt, a car payment, and student loans that were all weighing me down. I needed to make a change in my habits because what I had been doing wasn’t working and that’s when I signed up for Financial Peace University with Dave Ramsey at my church. I am so excited to share that I have officially paid off three credit cards, my car, put a major dent in my student loans, and built up a small emergency fund! It feels so good to just have less money flowing out to bills every month and be in more control of my finances.
Over the last year I somehow made a fundamental change and I started living with less stuff. It’s amazing how when you stay away from shopping and spending freely you actually crave it less. It’s just like nutrition; when you eat less crap, the less and less you will crave it!
Here are some ways that I made those changes to live with less and save money:
This was difficult for me to get the hang of. I have always hated math and I thought sitting down with a budget would basically be a long math session. But now, I have finally mastered it! The Dave Ramsey course offers budget forms that I use but you can find tons out on the web. Simply write down (I encourage the use of a pencil with a large eraser for this) all of your monthly expenses. And I mean EVERYTHING. I went back and looked at my checking account for the past several months to see what I spent on groceries, gas, and eating out on average and then set myself a monthly spending amount for those things. It’s okay to be wrong for the first few months (this is where the pencil comes in handy). If you decide that you need a little more to spend on gas, erase your original amount and write in the new amount. That just means that you are going to have to cut the money from somewhere else…
2. Cash Envelopes.
I learned that once you start spending with cash you start to have more emotion with your money. It is a lot harder to break that $20 bill for me than it is to just swipe my card. I don’t want to break my $20 so I have to consciously decide if the item is worth purchasing. I made cash envelopes for my gas, groceries, and entertainment. I use the term ‘entertainment’ loosely. For me, this translates into my eating-out-fun-activity-impulse-buy-envelope. I can basically spend that money on whatever I want but once the envelope is empty, I am done for the month!
3. Eat out less.
Eating out is without a doubt my favorite hobby. I am a social person and so when I want to do something social with my people it usually revolves around food or drinks. Since this activity is such a big part of what I like to do I didn’t want to cut it out, but I decided that I needed to cut back. This is usually about once a week for me which still sounds like a lot for some but this is down from the few times a week I used to do! Progress!
4. Cut out shopping.
This may seem obvious but this was a big one. If you think about it, you have enough stuff. You have a closet and dresser full of clothes that you have been collecting over the years. I think our society puts pressure on us to have the latest trends and if we don’t have a particular style or fashion then we will fall behind. Learning to be content with what you have is going to take time. Introduce yourself to this concept slowly if this is going to be a big shock. Instead of your weekly shopping trip try to cut it down to every couple of weeks and increase your time in between. You shouldn’t be spending money you don’t have any way!
5. Sell anything you can.
I don’t know what it is but I think I get a high when I am getting rid of stuff. It’s the same feeling when I hit ‘delete’ on my computer. I love getting rid of things. I never really knew this about myself until I started with my closet. I knew I would be moving and this motivated me to clear out ‘things.’ If I don’t wear it – gone. If I don’t use it – gone. If I have four things that basically look the same; I cut it down to one. I encourage donations but here are a couple of things I used to make money off of my excess:
This is a site/app where you can sell clothing and accessories that are gently used. The buyer pays for the shipping and Poshmark emails you a two-day shipping label. All you do is bring it to the post office!
This is another app that I discovered where I can sell items that aren’t clothes. When I moved out of my old place I sold this old table and chairs I had picked up from the thrift store and painted for triple what I paid for it! Look for things around your house that you don’t use or that you don’t like anymore. Maybe it’s a piece of décor that you never found a place for. Maybe it is something in your garage that is just taking up space. This app is similar to Craigslist but all of the communication and price negotiation is done through the app. You post pictures and a description of the item you are selling, provide your zip code of where you are located, and wait for offers to come in! If you have a buyer, I recommend meeting this person in a public place rather than you home for safety.
6. Cut out non-necessities.
As I mentioned, I was moving to a new place while in the middle of this financial transition. At the time, my roommate and I had a cable and internet bundle so I decided that when I moved into my studio that I would not have cable. What that actually turned into was also not having internet for about four months! I just didn’t want another bill after I had been making such progress to have less of them. I did a lot of what I needed to at work and local coffee shops with free wifi, so it can be done folks! I now have internet but cable has stayed away. I have an antenna and pick up the basic channels which have most of my favorite shows anyway. I also gave up my parking pass at work and switched to public transportation. That transition alone is saving me $50 a month. Find things that you can live without for a while. Once you are in a better financial position you can always get them back. Maybe you have monthly subscriptions to things you can live without. Or maybe you have an expensive hobby that you can put on hold for a little while. Whatever it is, find it and put the money you would spend on that towards a pesky debt that is weighing on you or towards a savings for an item that you want and you would normally put on a credit card!
I hope some of these inspire you to clear out your excess and encourage you to save money and be smart with spending. It is going to take time to make habits out of these but start with whatever you can and work your way up! Leave a comment with tips that have worked for you to save and clear out excess!