Ladies, I have a very special series that I am introducing today. A few months ago I asked my dear readers if they would like to hear more about budgeting, something I had never really written about before but thought was important to discuss because as a housewife we are often the main spenders in our household. The vote for a budget series was an overwhelming yes, but the problem I ran into was my household finances are vastly different than the average person reading this blog. I thought it would be better to hear from someone who struggles with both debt and tighter funds than I do because the lessons learned can be applied to a wider variety of readers.
So I asked Raki Wright at Outside The Box Mom to come join my Team Glamorous Housewife as the Budgeting Expert. Raki’s blog has a lot of great advice on saving money and I thought she would be the perfect person to discuss all things related to debt and household expenses. I thought it would be fun if she read the book “The $1,000 Challenge” and tried to follow the author’s advice on squeezing out a grand from her monthly expenses. Being a woman who loves a challenge, Raki accepted. So please, will you all welcome Raki to The Glamorous Housewife and both learn from and enjoy her experience as she tries to get out of debt and live free.
Are you willing to put your family’s spending to the test? Do you think it’s possible to cut your monthly living expenses by $1,000 without sacrificing anything truly important? In Brian J. O’Connor’s book “The $1,000 Challenge: How One Family Slashed Its Budget Without Moving Under a Bridge or Living on Government Cheese,” the author did just that by trimming $100 from each of his family’s top 10 spending categories.
Brian challenged readers to look at all of their monthly costs using bank statements and recurring monthly bills. His suggestion was to trim regular expenditures, instead of ones you were emotionally tied to. If you cut your monthly expenses, you will experience that savings month after month. The author wanted to give his family some luxuries regardless of whether he had received a raise. He completed this experiment over the course of 10 weeks.
Brian’s word of caution – “Your goal probably won’t — and shouldn’t — be $1,000. I chose that number because it made a good headline. But whether your goal is $500 a month, $200 a month or $50, the idea is the same: Cut your current spending as deep as you want or need to go. Focus on your biggest recurring monthly expenses. Finally, redirect that cash at your financial goals.”
After reading the book, I feel optimistic that I could find significant savings on many of my family’s monthly expenses with research and an intentional plan.
I have a large debt I’m trying to pay off, so this savings will immediately be put to use. By nature, I am very thrifty. However, with a busy family and even busier work schedule, I can easily get sucked into spending too much on conveniences and allow expenses to increase each month without much thought.
My relationship with debt began in 1996, my freshman year of college, with a free t-shirt from American Express and a $500 credit limit. Almost 20 years later, I still have hefty student loans, payments on financed purchases, and lingering debt from things long-gone. I guess I never really got the concept of paying cash or using credit responsibly. The good news is that I don’t have any credit cards or auto loans.
Being in debt feels overwhelming, suffocating, discouraging, and sometimes hopeless. I compare it to nearly drowning in the ocean. Imagine that you are swimming, but have become overwhelmed by the waves, the water suffocates the oxygen out of your body, the tide gets stronger, and there is no help in sight. That’s how being in debt feels. As the Bible says in Proverbs 22:7, “the borrower is slave to the lender.”
Is my long-term goal to live debt free? I’m not certain. I think I’m okay with having a mortgage, but beyond that I plan to limit my use of credit, in the future.
I’m bold – my goal is to save $1,000 each month by the end of the experiment.
That is the exact amount I wanted to pay toward this debt before the opportunity to write this series presented itself to me - which I believe is further evidence that this experiment will work. I am working today to pay for something I used yesterday, instead of saving for what I would like to do tomorrow.
I call the large debt I need to pay off the “Lifeboat Fund.” My goal is to use any savings I am able to create during this experiment to pay down that debt – hopefully by the end of next year. I have a few smaller debts that I am paying off this year. I will use that extra cash to pay on the Lifeboat Fund. Dave Ramsey calls this a “debt snowball,” as you pay off the smallest debt first and apply that debt’s normal payment to the next debt, to create the greatest momentum.
Over the next 10 months, our series will cover:
- Kid Costs
- Work Expenses
- Personal Spending
- Life Insurance
The first category of expenses I reviewed were my transportation costs – car payments, insurance, taxes, maintenance, repairs, licensing, gas, etc. Part 2 will be in a few weeks and we will see if I was able to trim $100 from my monthly transportation expenses.
Have you ever made significant cuts to your transportation expenses? Share your savings strategies, questions and tips in the comments.