Top Ten Ways We Have Saved Money: Series I

I thought I'd start a Friday series on the Top 10 Ways We Have Saved Money over the last year.

I will start it out with our story. I enjoy hearing other people's stories and my hope is that our story and ways we have found to save can be an encouragement to you and where you are in your journey.

My husband and I married young and ambitious. We were lucky to have been raised with good money saving habits, and did not start out with any debt (of course, not too many 19 year olds have much debt!). The three cars we owned between us were all old but paid off. Within months of getting married my husband started his own construction business, we bought our first house and upgraded to an almost brand new car. We had lots of goals and were not about to wait around to accomplish them!

While we did not incur credit card debt early on, we certainly lived up to or a little beyond our means. We adopted the American lifestyle mindset that a certain amount of debt was normal and even good. It could be a tax write off! Because we were young and naive, we were pretty reckless with our money. We didn't save much. At 23, we put thousands into buying a sub shop because my husband was getting bored with contracting and he figured it would be fun. Unfortunately, we knew nothing of that kind of business and it failed rapidly.

We used credit cards to help cash flow the business. A job would go bad, a customer wouldn't pay, a job would go over budget, and we began to build a build a balance on the credit cards. We worked hard to keep it down, but over the years it grew to around $15k. We weren't worried though. We felt it was a cost of doing business and that it would get paid off eventually.

Over the years, our lifestyle grew rapidly as well. Never being ones to ease into anything, we would always stretch ourselves to the limit. We bought into the image of the big house, fancy cars, nice vacations, etc. We paid for all our personal expenditures in cash, but never saved anything. About the time that we had our first child, things began to turn and get tight for us. I went from working full time to one day a week. My husband worked harder, started to diversify what he was doing and things were stressful, but we managed.

A couple years later, one of my husband's businesses went from providing a steady monthly income to zero. We had used that monthly income for a couple years as our main monthly source of income. At first we thought it was going to be just a temporary interruption and we continued to spend as we had before. Within months we realized that this was not temporary but permanent. Unfortunately, we had racked up about $5000 in personal credit card debt before we came to the realization.

I found out about using coupons a little over a year ago and started with that mostly as a hobby. It was weirdly entertaining to me to walk out of the store getting things for free or paying very little for a cart full of food. Plus, I was able to upgrade my normal stores from Winco to Safeway and Albertsons! About August or September 2008, I began to realize that the real estate market was not going to bounce back like we thought it would. We began to see the start of the bank failures and bail outs, and really began to see clearly how important it was for us to start working on getting a savings together and paying off debt. We started brainstorming, and that is when I decided to go back to work one day a week, we put ourselves on a budget and started making financial goals.

We have grown up a lot when it comes to our finances and have found many ways to save without sacrificing our whole lifestyle.

Here are 5 out of the Top Ten Ways We Have Saved Money over the last year:

1. Shop your insurance. I shopped our car insurance and was able to save $60 a month by switching to Geico. Yes, I really did!

2. Switch to using cash for grocery, eating out and household item type expenses. Up until November 2008, we had used our credit cards exclusively for all purchases. We had felt like cash just disappeared way too fast with nothing to show for it. I decided to try out the cash system and found that if I limited myself to the cash only, I was much more careful about how I spent it because I knew it had to last. We still make some purchases on credit cards, but it's very few and far between and mostly for things that are hard to budget for like boat expenses.

3. Put your monthly and yearly financial goals down in writing. There's something about writing them down that keeps you accountable and better on track towards meeting your goals.

4. Have a garage sale. I had my first garage sale ever the last week in September 2008. I made $760 in one and a half days! For those of you who live in the Pacific NW, you know that the beginning of September is usually the end of garage sale season and I was quite a bit past that.

I was pretty amazed and most of what I sold was items I had stockpiled through couponing.

5. Go through your house and see what you have that you are no longer using that you can sell. We had been storing a large hot tub that we had taken from one of our rental homes. Our plan had been to use it ourselves and sell the hot tub that we already had. As our mindset changed towards saving money, we realized that it would be better to sell it. We listed it on craisgslist and sold it for $800 which we put towards our car savings. Other things we have sold are light fixtures (when we changed them out for new ones), motorcycle helmets & gear, snowboards, etc. Be creative!

Next Friday I'll have the last of the Top 10 Ways We Have Saved Money.

Feel free to leave comments on ways you have found to save money. I think we can all use more ideas and encouragement in this area!

Erika