I equate making a commitment to saving money and frugal living the same way I would tell someone to look at a fitness plan: no pain, no gain. It's hard work to go from fabulous to frugal. Well, at least it was for me.
When I first started the journey to living a frugal life, it wasn't without a few self-centered, Oscar-worthy temper tantrums. However, over time, not only did living a frugal life become easier, it became more rewarding. Over the past three years I learned how to save money, how to spend smarter and how to enrich my life in three unique ways.
No. 1: I Ditched the Second Car
Several years ago, we had two cars and two car payments. My husband's Honda, which came with a $400 a month payment and my Dodge Durango, which was costing us an additional $500 a month. I ditched my Dodge and began carpooling with my husband back and forth to work. Not only did this save me $6,000 a year in car payments (and even more in interest payments), but it slashed our car maintenance bills, gas bills and insurance bills to boot.
And while only having one car can be a little inconvenient at times, I can say that by having to taxi the kids around or being forced to travel with my husband for an hour or two each day has led to some great chats and additional quality time that we were missing out on before.
Savings: $9,200 a year
Personal benefit: Improved family time and communication.
No. 2: I Changed How I Used Credit
Instead of making minimum payments on a variety of cards, I paid off my debt and downsized my wallet to only two credit cards. We have MasterCard with a $10,000 limit, and a VISA with a $20,000 limit.
The MasterCard is a cash back rewards card. I use this card to pay my monthly bills and receive 1 percent cash back on all of my purchases. I pay this car off on the 21st of each month with a cash back rewards debit card -- for which I earn an additional 1 percent cash back.
I keep the Visa in a fireproof safe and only use it for emergencies. This method of paying my bills with one card and paying that card off each month keeps feeding my credit report positive items while helping me earn money just for paying my bills. I don't know about you, but I call that a win/win.
In addition to downsizing my wallet, I also downsized my life. I only buy what I need, and what we have enough cash in the bank to buy outright. I don't use credit on a whim anymore. I'm not "finance happy". My minimalistic, penny-pinching lifestyle has saved us a lot of money over the last few years.
How much money, you ask?
Savings: $4,500 a year
Cash back earnings: $1,800
Personal Benefit: Less stress, no fights and less clutter.
No. 3: I Became a Couponing Freak
I am no extreme couponer --by any stretch of the imagination --, but I started using coupons in a not-so-extreme-but-still-powerful way about a year ago. Each week, I download grocery coupons from E-bates and Coupons.com that I can print and cut with ease. I match these coupons to the sale items at my local market via flyer and a handy dandy iPhone app. From here, I make my meal plan and then my list. This alone saves me a bunch of money.
From here, I combine my manufacturer coupons with my in store coupons and double my savings, giving me an opportunity to double dip or "stack" my coupons for even bigger savings.
Savings: $2,600 a year
Personal benefit: Money I can use to buy things for my family.
Was it difficult to make these large cuts to my budget and change up my lifestyle? At first, it felt impossible. In all honesty, I think I would have preferred a root canal. However, once I made the commitment and stuck with it, my family has been rewarded with more money to spend on vacations, extra quality time and have money for more things we need -- like college for my twins. Today, if you were to ask me whether or not my savings was worth the pain, I'd say, "No question. I gained far more than I was pained." Because $18,000 of extra cash a year and a happy family is more than even I could have hoped for.
How have you transitioned into a frugal lifestyle?
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