One of the greatest habits we formed during the first two years of our marriage was meal planning. At first the mission was to spend less and eat at home more, now that it is second nature, we can focus on making our diets healthier and more satisfying. I’ve always loved meal planning, even when I was poor and single, but it’s not something I really tackled in an organized way until marriage and the debt payoff. It’s just so nice to come home at night and not have to be creative or run to the store but instead to have all the meal ideas and ingredients ready to go. It can also help you save money if you focus on efficient use of ingredients, take advantage of sales, and limit your convenience foods.
While 2016 was kind of the worst in a lot of ways, it was also kind of a home run for our financial life and goals. We started out 2016 with $20,000 in student loan debt and $2000 in our emergency fund. We will end 2016 with zero debt and $10,000 in our fully-funded emergency fund. We also were able to buy a car with 30,000 miles on it in cash, treat ourselves with a king size bed and a long weekend trip to Chicago, and begin saving for our Roth IRAs.
If you’ve been with the blog from the beginning, you’ll know that none of that is meant to brag. We’ve been grinding it out one budget at a time, keeping our expenses super low and striving for frugality in every corner. Please read it not as, “look at these cool things we’ve done” and instead as, “look at what you to can accomplish if you prioritize your financial health.”
It’s been a bit difficult for me to navigate what this blog looks like in our post-debt world. But then I realized that although the Just hit $50k in debt payoff!!!1!! posts get a lot of likes on Facebook, the actual number of readers on the blog is very modest. I’m going to take that as an indication that those of you here, reading beyond the headline, are interested in the nitty-gritty of my personal take on personal finance. I hope the next steps of our journey still resonate with you and maybe our work to figure out a good plan will help you navigate the complex options and decisions that seem to pop up with growing regularity.
So I had a big blog written about how we were breaking away from the strict Dave Ramsey baby steps once again and saving for retirement concurrently with building our 6 month emergency fund. Then Mark’s car bit the dust a couple weeks ago. We jumped on a deal and bought him a new (used) vehicle the following weekend. A big reason we were ready to make a move and buy a new vehicle in cash was because of sinking funds.
What is a sinking fund?
Sinking funds are pretty simple: they are savings funds dedicated to a specific cause which you contribute money to each month for a period of time. Say you want to save up for a fun trip or to replace your back deck. You can’t just do those things the instant you want them. (Or at least most of us don’t make enough money to spend thousands on a “want” in a single month). And you can’t just use your emergency savings as a slush fund for your whims. You also don’t want your budget to be blown up by a big and expected yearly bills. Instead, you need to put a little money away over time so you have enough for the whole trip/project/bill.
One Saturday evening back in 2008 or 2009, I was sitting at a table at the Reynolds Alumni Center on the Mizzou campus enjoying a fancy, three course dinner with a room full of education leaders in the state. You know, your typical college Saturday night – at least as a College of Education Ambassador. I remember chatting with the superintendent sitting next to me and we got on the subject of finances.
He advised me that when I graduated and started working, I should not change my spending levels at all and trick myself into continuing to live on less. Then every time I got a raise, he said I should just add that to savings/retirement and keep my lifestyle at the college-spending level. He was very earnest and kind and obviously the conversation has stayed with me, but I’m not sure it is actually that helpful.
Maybe you’ve heard similar advice. It’s not a bad thought, trying to limit lifestyle inflation and realize you can live on less than you make. The problem is that college is fake. I don’t think I know a single person in my age group who went through college with no financial assistance (parents or loans or government grants). And I don’t know anyone who wasn’t getting health insurance for free while in school. I had a lot of help during school, so even though I worked throughout college, I was only responsible for a small, artificial part of my expenses. I certainly wasn’t on a budget, I just checked my online banking regularly and spent what I wanted.
SCREAMS: “WE’RE DEBT FREEEEEEEEEEEE!”
Surprise! We made our final payment today and we’re 100% debt free. We don’t owe nothing to nobody. We’re not heading to Nashville or getting on the waiting list to do a Debt Free Scream with Dave Ramsey, but we can still answer all of Dave’s usual questions here. If you’ve been an avid follower of my blog (Hi Mom!) then you probably already know these answers. For everyone else, read on…
Starting Debt November 2014: $55,421
Debt Remaining June 28, 2016: $3,642
Anticipated Payoff: July 2016
I wanted to share some of our cheap tricks to stretch our budget and still have some fun. When we first started this whole thing, it was really hard to break away from some of the luxuries and spending habits we were used to. I mean, I used to buy books all the time. I’m still haven’t developed a great habit of going to the library, but I’ve at least broken my spending habit there. When you’re in the dating stage of a relationship, it’s so easy to justify multiple dates or dinners out a week. We don’t want to completely forget about dates, but we also can’t pretend like multiple meals out a week is a viable option forever (both financially and for the waistlines!).
So below you’ll find some the products and things that have helped make our budget feel cushy and roomy without adding any more money.