Baby Steps to Your Financial Freedom--Guest Post by Amy

Hi again! Two weeks ago I shared with you a story about how my sister and I saved money to buy our own swing set and how that taught me how work and money go hand in hand. Then last week my sister, Mindy, shared with us how important it is to be SMART with your goals. I’ll continue to build on both of those posts as well as previous posts from my mom…

Here are some ways I’ve learned to save money and keep a “Wise Spender, Smart Saver Mentality”…

The first important lesson I learned about having a Wise Spender, Smart Saver Mentality: Focus on your goals and know the difference between needs and wants.

In 2003 I got my first real job working at a local grocery story making $7.50 per hour. It wasn’t my favorite job, but it helped me to save money for my first year at BYU. I remember as I received my paychecks that I would sometimes have moments of temptation to take my payday money and go have fun or buy a few new outfits… BUT, I would remember that my goal was to pay for as much of my first year at BYU as I could. So into the bank that money would go to save for my goal of going to BYU. Yes it is very tempting to go party and spend the majority of your paycheck, but I knew that I wanted to be able to pay for as much of my time at BYU as I could. Make sure to take time to think about your future (remember those questions I had you ask yourself in my last post? “Where do you see yourself next year? And in 5 years?…”). Knowing your needs vs your wants will help you to keep focus on those important future goals. It is okay to give yourself a little bit of money to have some fun with, but it should be a modest amount.

The second important lesson I learned about how to have a Wise Spender, Smart Saver Mentality is: Follow those who have already figured out ways to save and become debt free. 

When I was almost 22 years old and in my final year of my degree in Elementary Education at BYU, I got married. We were given a gift at our wedding that really changed our lives. My great-uncle Dave gave us a book by Dave Ramsey titled The Total Money Makeover. As we opened gifts, we thought that it was kind of him to give us a book about finance, but we were so busy with schooling we didn’t take time to read it… Looking back we wish we had read it as soon as we received it. We were thinking of our now and not so much about our financial future.

A few years down the road, we were finally finished with our degrees and reality hit. We had student loans to pay back that totaled over $45,000 together…Ick! Looking at that amount made us sick (thank heaven it wasn’t more than that!). We were doing our best to live like our parents taught us and not spend money we didn’t have, but at the end of every month we were feeling very tight. We had student loans, a modest car loan, and medical bills from our girls being born 3 months early. So at that time I picked up Dave Ramsey’s book off the shelf. And what he said made so much sense! I strongly advise that if you are seeking financial freedom and wanting to pay off debt that you read his book as well as continue to read this blog. My husband and I are on baby step 2 - which is paying off debt - and we are so excited that we will be finishing baby step 2 in just a few short months! We’ll have paid off our Student loans 2-3 years early, a private loan for our solar panels 4.5 years early, credit cards completely paid off, and our van paid off 3 years early!

The third important lesson that I learned about how to have a Wise Spender, Smart Saver Mentality is: To learn to be frugal, be wise in what you buy and when you buy it, and use the money leftover to pay off debt and then save.

At a young age, I learned from my parents as well as from living on my own some tips and tricks to being frugal…(as well as a few things not to do as well).

Tips for paying off debt early:

1. Budget and plan ahead…don’t let the month happen to you and think where did my money go?!?! Before the month starts make a list of everything that you will be needing to pay for the month. And I mean EVERYTHING! (Even put things in your budget like date night and paying for your kids school lunches!)
2. As well as Budget for future needs. An example of this is a home repair fund. This will cover money spent on little things like filters and light bulbs, and it’s also a good idea to save for bigger things that may happen. (Dave Ramsey calls these “Sink Funds”. “Sink Funds” are funds for your home, car, Christmas, birthdays, etc.) I find it so much easier putting $60 away every month than in November/December realizing I need to come up with $700+ to pay for Christmas. This also allows for me to do something my family calls “Amy’s deals” where I find awesome deals on toys I know my kids will love during the year for their Christmas presents. I can buy it then and put it in my Christmas present storage box. I usually get their toys at 50-90% off the normal price this way. Make a budget and don’t spend more than you have coming in. If you need to make changes to it as the month goes, that is ok, but the money needs to come from somewhere in that budget.
3. Buy off season! I always buy my kids clothes after the season is over. I usually only spend $100 on each of my kids clothes and shoes during the year when I make sure to buy winter clothes in the spring and summer clothes in the fall.
4. Meal plan, meal plan, meal plan…think of how much money you’ll save if you eat 95% of your meals at home. Homemade freezer meals and planning around sales help you to avoid eating out. Our family only eats out at a “sit down” restaurant once every other month, and I take my kids to a fast food restaurant to play and have fries & chicken nuggets once or twice a month. *Also wanted to add that if you make sure to use coupons for those few times that you do eat out it will help a ton as well!*
5. Avoid using credit cards, and if you do use a credit card, pay it off right after making a purchase.
6. Brown Bag It! My husband and I both make sure to to take a homemade lunch to work so we don’t spend that money on eating out. If on the rare occasion Brian needs to go out to eat because he forgot his lunch, he has a small amount budgeted each month to make sure it’s available. (The amount budgeted is only enough for him to eat out for 2 meals.) We also had him take a box of canned soup and other longer shelf life foods to store under his desk in case he forgets to bring a lunch.
7. Do your homework! I don’t actually mean the kind a teacher gives to you even though that is important…what I mean is take some time to look at the stores around you and how prices compare. Build your shopping list for groceries around sales and look at what foods you already have in your home and what you’d need to make meals for the week. This is also the case if you’re needing to buy something like a car, furniture, or even a house. Look at what you can afford and take the time to do your homework so you get the best bang for your buck! 
8. Stock up! There are times when the grocery store does a case lot sale or Target does a Baby Sale (they give you a gift card for buying 2 boxes of diapers). Just make sure to budget for these purchases but I totally advise to do it if you have the space in your home! An example of the diapers…I would buy 12 boxes of diapers at Target during their Baby Sale, but I purchased them in two separate orders. In the past Target would give you $20 in gift cards with the purchase of $125 in baby items as well as $10 in gift cards with the purchase of 2 giant diaper boxes. So in the first transaction I got the $20 gift card as well as $30 in gift cards for the 6 boxes - repeat again for the 2nd transaction, but I used the first set of $50 gift cards to help pay for the next 6 boxes of diapersI I would also use coupons to help save even more money. I ended up saving close to 50% off the normal cost of the diapers. (I also made sure to use my 15% baby registry to help get those savings.)

So this week I encourage all you readers to try and do some or all of these tips that I’ve shared. We’d love to hear the success you’ve had at saving money and learning to have a Wise Spender, Smart Saver Mentality! Good luck! I know you can do it!