Finances

Theo and I have been known for being frugal.

I feel like finances are a huge part of everyone life, but no one talks about them. At least not specifically. People either “don’t make much” or “make enough to get by”. Sometimes I hear my friends complaining about how they don’t have much money, but then they drive a brand new vehicle and get a manicure every week and I’m not sure if we are talking about the same kind of money.

So I want to be clear here. I’m going to write this post about our finances. And I will go into as much detail as possible, while still maintaining our security. This is the interwebs after all.

First, let’s start with income.

When we first got married, neither one of us was working. I was finishing my senior year at Cedarville and Theo had a job at a data analysis place (that has since closed). Thankfully, we didn’t have a huge gap of time without an income and Theo found a job at an EMS company that paid $10/hr. So that was our income. There were many months when we would have $2-3 in our bank account before the next paycheck came in. We were paying rent/utilities, grocery and gas. And that was it. No spending money, or any extras. We were getting by. Maybe I should say we were squeeeking by. Barely.

After I graduated, I got a job and also started making around $10/hr. Wooohooo! Doubled our income! I worked for a little over a year and pretty much all of my paycheck went straight to paying off my loan. You can read more about that process here. Within a year, we had paid off my $15,000 school loan. We lived off Theo’s income.

Once my loan was paid off we were feeling rich!  Two incomes and no debt??? We were free! Free at last!!

So we had a baby.

And then we bought a house.

Womp. Womp.

I put in my notice at work and “quit” my job. I was now a stay-at-home Mom and we were (again) living off Theo’s income. The same income that we had before I worked ($10/hr). And we now had another family member and a house.

This past summer, Theo got a new job! Whoop! Whoop!!! His pay increased and for that we are thankful. We now have an income that is close to $25,000 a year!

What’s that you say? $25,000? Yep. That’s what we live off, travel with, pay our mortgage with and tithe with. And that is before taxes.

The reason that I wrote that out point blank is because a lot of times we get into this mindset that we make a lot of money, or that we don’t make a lot of money. I have no idea if you make waaaayyy more or waaaay less than us, and I don’t really need to know your income. But if you are going to get money saving tips from me, you are going to need to know how much money I really need to be saving just to get by. You have to know that when I say we took a road trip and staying in a hotel on the night of July 3rd (a holiday), that was HUGE for us….and now you can see why. It’s not just an expensive stay, it’s a HUGE part of our income. Once you know that, you know what it means when I cut corners or when I say that I’m truly sorry I can’t make it to your wedding because it really does cost too much for us. You have to know how hard Theo works to earn every single penny and how hard I work at home and at the grocery store to not spend money. You need to understand that when my entire wardrobe is from the thrift store, it’s because if I shopped retail, I would be able to buy one piece of clothing a year. And you have to know that I truly have learned how to save money.

I’m writing this post because I have had some questions about how Theo and I do our finances. I thought I would lay the rest of this post out in a little Q&A.

Q: How do you manage your finances?

A: This is something that we really need to be working on. Nowadays, we hardly write any checks and I’m pretty sure no one our age knows how to balance a checkbook. Online banking has made managing a budget so much easier….and there is so much less accountability. One thing that we try to do is write down all our spending for the month. We are honestly pretty terrible at this, but on the months that we actually write everything down, we are much more accountable. We honestly don’t have a budget ($200 for groceries, $20 for clothes), and sometimes I think that it would be much easier to have one. I know that my brother and sister in law do an excellent job at creating and sticking with a budget. Perhaps I’ll have him write a guest post on his budget to help you all out! I have also heard excellent things on the Dave Ramsey envelope system. However, this is my blog and I’m just going to be completely honest in saying that we don’t have a budget. We simply try to spend as little as possible in all areas.

Q: Do you have a budget?

A: Actually, we don’t. I actually don’t recommend this system, but it works really, really well for us. I don’t have a grocery budget or an allowance or a saving budget. While I don’t neccessarily recommend this method, we have decided that this works for us. I spend my money on groceries, we pay all our bills and usually about once a month we purchase some extras, usually through Amazon. We also do put some things towards savings, but that honestly just depends on the month and the most pressing needs on our list.

Q: How do you pay off your debts and manage your mortgage payment?

This, my friends, is one of the huge ways that we differ from the average American. We have both agreed that when it comes to debt, we want to pay it off as fast as possible. When you have debt, someone is collecting interest on that debt. Every given month, the interest collected is a percentage of the money that you owe. So when we first took out a mortgage, our loan was big. Let’s just say $2,000 to make it easy. (Clearly that is not the real number, or we would be living in a shack) Anyways, at the beginning, if our interest rate is 10% (again, not the real number), the first few months we will be paying $200 in interest. So if we pay the minimum payment for a few months, bringing our loan down to $1,500 and the interest rate is at 10% still, then we will only be paying $150 in interest.

So our strategy is to pay off our loans as quickly and as efficiently as possible. That means that our budget is essentially groceries, bills, tithe, a little bit for savings…and then the remaining money goes towards our mortgage payment, even if it is WAY over the minimum monthly payment. We used this strategy to pay off my student loans and we paid off $15,000 in a year. Of course, as I mentioned above…we were both working. Our mortgage is not going to go quite as quickly with only one income.

So often the American/human mindset is that if we get a promotion or make a little more money, we can therefore spend a little more money. But Theo and I have agreed that it is far more beneficial to live at the same level, not suddenly spending every extra penny that we make. Instead, we try to save it. Invest it. Put it towards something beneficial to our future, like stock or investment property, instead of going on more date nights or spending money on things that we didn’t need before.

Q: Do you ever have arguments over your finances?

Hahahahaha.

What couple doesn’t? Seriously. When you have two people with different personalities, different desires for leisure activities, different love languages, and sometimes different dreams, it gets a little sticky. Something that I feel is very important is a complete waste to Theo, and something that he feels is very important is a complete waste to me. It takes talking through things, and in the end, I need to trust Theo that he can make the right decision regarding our money. And Theo has the responsibility of making the wisest decision possible. Fighting over money is not uncommon. AT. ALL.

Often, I get selfish and ask Theo when I will ever have enough money to just spend money on myself. As you read above, we have been married for three years and the entire time we have dedicated pretty much every penny on loans, bills or house payments (and a little bit to savings). But when I really step back and focus I need to remember that me being “comfortable” and “pampered” isn’t exactly the first goal with our money. I often get stuck comparing myself to friends who can afford some luxuries that we have to say no to. And while we don’t have to say no to some things, we have decided that we will say no in order to pay off our mortgage and live relatively free of debt.

Q: If you don’t have a budget and you don’t even write down the money that you spend, how in the world are you frugal?

Well, I have come to one conclusion: it’s a lifestyle. It’s not just having a good budget and knowing a lot about your money and seeking to be wise with it, it’s weighing the value of the money we are spending with every single purchase. When I go grocery shopping, I will look at what is on sale. I will try to find the cheapest things while still working hard to be healthy. But I actually don’t shop at the organic health food stores (although there are some items that I will pick up there), instead I try to feed my family healthy and balanced meals that I have made from scratch.

If there is a piece of furniture that I am just dying to have, I will scout out all second-hand stores and garage sales until I find it for cheap!!! This sometimes means waiting years before I find the perfect piece that I want. Take our dining room table for example. We bought the thing at a garage sale for $10. It was functional, but it was hideous and cracked and popped real loud if you leaned on it. Plus the legs were all wonky so you couldn’t even fit a chair under them and someone was constantly banging their knees against the table leg. I knew what I wanted to replace it, but I knew I didn’t want to spend a lot of money. THREE YEARS after we bought that creaky one, my friend called me to say that someone in her neighborhood had just put out a table and chairs on the curb. You guys…it was exactly what I was looking for!! One leg was broken, but handy Theo fixed it no problem. I had to put up with the awful one for a long time, but I scored exactly what I was looking for FOR FREE. But I had to wait three years.

It’s a mindset. You have to choose to be frugal, to save money, to sacrifice in some areas. It’s not all fun and games to be frugal. Sometimes it’s hard to say no to the things that everyone else seems to say yes to with ease.

Q: What are some resources that can help me get on track financially?

Of course, you can feel free to ask us any question that you want, but we are not experts in finances at all. I have heard amazing things about Dave Ramsey and his budgeting system, his Financial Peace University, and I really enjoy listening to his talk show on the radio. Theo read the book Rich Dad, Poor Dad…and that changed a lot of our thinking about budgeting and finances in general. There are financial counselors out there as well, but you will probably end up paying a fee. I highly recommend putting your frugal mindset to work and finding FREE ways to save money, instead of paying money upfront to learn how to save money. Your local library is a GREAT place to start, as well as your local church. You won’t have to look far to find someone who is in a different stage of life than you who can give you some really helpful tips on saving money or paying off loans.

Stay tuned and next week I will publish a post on the top 10 ways we have learned to save money. We still have a long ways to go, and we are not the best money savers on the planet…but you asked, and I answered! What other questions do you have for me in regards to finances?

One comment

  1. Nancy says:

    Well done! Livin’ on love isn’t as easy as the song makes it sound! I think that when people use cash it is easier to stay in budget. Cash is gone…..no more spending. But when we are in the USA we use our debit card. We don’t have problems over-spending because like you we now have “a feel” for what we can afford. But here on the mission field we use cash only, other than a few things that are charged through our mission account. We do the Dave Ramsey envelope system and that works for us! Sometimes we do borrow from one envelope to use for one that’s empty, but other than for major purchases, we don’t go over what’s in the envelopes. We use our credit card ONLY for on-line purchases and emergencies and by emergency I mean true emergency (missed a flight; have to get a hotel in Paris kind of emergencies).

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