My family lived with the stress of debt far longer than we should have before my husband and I finally woke up, changed our ways, and began saving our money.
We struggled through the Great Recession of 2007 – 2009. At that time, I had my own early childhood education business.
Due to the economic downturn, I ended up closing my business and sold all my classroom equipment and supplies.
I went back to work for The Man.
We attended Financial Peace University, a life changing 9-week class that focused on Dave’s teachings to set up a budget, get out of debt, and save for the future to achieve true financial peace.
Going through the course with other people who were in the same boat really did change our lives.
We cut up all our credit cards. We paid off a huge amount of debt using the debt snowball method.
We didn’t step foot in a restaurant. Beans and rice, baby!
We made a lot of progress, but it wasn’t enough. We ended up filing bankruptcy and lost our home.
Admitting our financial blunders wasn’t easy, but it became the fuel for wanting to do better.
Then my husband almost died.
He was working out of state and his brain blew up.
With no warning, my healthy, hard working husband experienced a ruptured brain aneurysm.
According to the Brain Aneurysm Foundation, 40% of ruptured brain aneurysms result in death.
This was the scariest time of my life – I didn’t know if he was going to live or die at first. I still thank God that my husband survived.
It’s only through hindsight that I realize how unprepared we were to handle financial emergencies.
At the same time my husband was lying in a hospital bed far from home, the non-profit agency I worked for decided to cut back everyone’s hours.
Of course, my primary concern was whether or not my husband was going to live, rather than my paycheck.
After my husband came home and continued his slow recovery, we knew we had to focus on building an emergency fund and grow our savings.
We looked for ways to reduce our spending even further, and I found ways to increase my income, including making extra cash through side hustles.
These past few years have been challenging, as I was the sole bread winner of our household until my husband was finally awarded permanent disability and began to collect his pension.
Reflecting on the truth about our money story, I realized that yes, we made just about every possible mistake with money.
The good news is that we changed our spending and savings habits to win with money, and you can, too!
Our money story can help you improve your finances if you take these 5 simple but important money rules to heart and make them your own:
- Get out of debt – and stay out!
- Save more – spend less than you make.
- Have a back up plan.
- Build your emergency fund.
- Invest in yourself.
If you’re in debt, get out and stay out!
We cut up all our credit cards and never looked back.
We sold stuff on Craigslist and eBay, and started side hustles to help pay off our debt.
Save more – spend less than you make.
Live within your means. Any amount you save is yours to keep, even if it’s just a few bucks a month at first. It adds up, and creates momentum.
Have a back up plan.
Your job is not guaranteed. What else can you do to make money?
Whether it’s starting your own business, keeping your skills updated and fresh, or knowing you can side hustle, it’s important to have a back up plan.
Although you have a little more control over some aspects of it, your health is not guaranteed, either.
As my husband and I learned first hand, a disabling illness or accident can strike at any moment (usually the worst moment).
Take steps to keep yourself as healthy as you can and figure out a way to generate a passive income.
Build your emergency fund.
Emergency funds are for emergencies, not for things that you know will need to be replaced periodically.
You know your car won’t last forever, so have a separate savings fund for that.
Your emergency fund should have enough money in it to cover your basic expenses for 3 to 6 months.
That can be a lot less than you think – you’re going to cut back on all the extras when you’re in crisis mode.
Invest in yourself.
Right out of high school, I went to college and got a social work degree.
Unfortunately, it’s a very low-paying field.
By taking extra classes at an inexpensive community college, I was able to start my own profitable business. I paid for these classes as I took them, with no college debt.
Later, I found the least expensive online college and got a second Bachelors degree in a better paying field. Again, no college debt.
This became my best paying side hustle, better than my primary job.
Now I’m investing in my future, trying to catch up on retirement savings.
I finally started contributing to the retirement plan at my job. At first, I only contributed $20 a month to my plan.
With every raise, I increased my contribution. You can do this, too!
We’ve started IRAs again. And this time, we’re going to let them grow.
Question: What is one change you could make to save more money for your retirement?