Mo Money, No Problems
Through college, my parents payed for my rent, they gave me an allowance, and helped pay the remaining amount of my college tuition, after scholarships. I also worked a job during the semester and had several different jobs in the summers. Still at the end of each month, my bank account balance fell below a dollar.
Obviously, I am not the financially savvy type, which is why I married Zack.
He's the most amazing saver I have ever met. He knows and understands the stock market, and he's an expert when it comes to budgeting.
In his words, here's how to get out of debt, spend less, save more, and enjoy life.
Gracin's right. Each month it would drive me crazy that she'd be completely out of money. I calculated that at one point she was spending $112 on Starbucks each month. So, Gracin is an extreme case, but thousands of people struggle financially.
Since I got married to Gracin, I had to start developing specific strategies and thinking through some of the habits I have used to save money.
Here's what we're doing, in this order. We are hoping this might help others:
1. Get out of debt.
This is by far the most important and necessary step because you can't save and invest without being out of debt. Gracin and I were blessed enough to graduate without student loans, and Maw Maw, Gracin's grandmother, gave us a free place to live for a few years. However, Gracin's transmission went out in her bug, and we had to get her a new car right before Christmas. I put as much as possible down on the car, but with that and the honeymoon, we still had about two thousand dollars of debt to pay off. To get out of it, we...
- Cut ALL unnecessary spending- As in we ate rice and beans for a few weeks. This is the one time I would say you don't need to follow a budget. Instead, just don't spend, at all- unless of course you have to. For a few weeks, we only paid for gas, bare minimum groceries, and that was it. I recommend this only if your debt is below your monthly income. If it exceeds that amount, stick to your budget, but don't put any into savings, instead all into paying off debts. Start with the smallest debt and work your way to the largest.
- Buy in and be All In- Clemson just won a national championship, so it worked for them. It will work for you too. Both partners have to be bought into the finanical goals. Which leads me to my next point
- Make goals- Make a two year plan with rewards at the end. Tell yourselves, "if we get out of debt in ______ months, we'll go to a nice dinner," or in my wife's case, a cool trip (as you can tell she has champagne taste on a beer budget ;)
2. Save like crazy:
- Be a smart shopper- Groceries can get really expensive, especially if you are like Gracin and you choose to buy all organic and only from Whole Foods. While she's adapting to the Laura Lynn life, we have found ways for both of us to be happy. One thing that can really help is reading and comparing labels. Often times the ingredients are the exact same even though one option is just more expensive. Other times, like with maple syrup, the cheaper options are made of corn syrup and water. Also, plan the meals you will be cooking so you can eliminate waste. Call your grocery store and find out the day they restock, and go the day before.
- Get a credit card, only if you think you can handle it- Credit cards take advantage of millions a year, but if you're smart, you can take advantage of the credit card company. You can build your credit and earn cash back. This only works if you treat your credit card like a debit card and only spend what you have. The minute you start to spending more than you have, you become the one who gets fooled.
- Invest- There are many things and many ways to invest, and it can get pretty crazy. Younger people, specifically those of us without kids and without many responsibilities, should make high risk-reward investments. Be aggressive because you can afford to lose. Invest in stocks like new start-ups, and tech. companies. Under Armour was an example of this type of stock. But, of course do your research. For those that cannot afford to lose, invest in conservative stocks, mutual funds, gold, etc. Another important thing to remember is that you cannot pull out money from stocks without paying taxes on your gain. If you sell your stocks in less than a year your tax penalty is double the tax penalty if you hold onto it for longer than a year, so be smart. You can invest in these through your local brokerage firm or an online brokerage firm. No matter which category you fall in, if your job offers a 401K, put as much as you can into it.
3. Enjoy life
Being responsible is important, but living is important too. Plan trips and go on a date. Don't let saving keep you from living.
Save for a reason and combat greed by giving.
The Lord has called us to be free- free to give and free to live. Don't let your finances tie you down. And remember money is the root of all evil. He is the only true fulfillment and satisfaction we can get.