Rich Girl Gone Broke..My story fighting debt, saving money and using cash to save.

Cash:  We all want more of it, yet the number has grown to 70% of Americans living paycheck to paycheck that number up from 42% of in 2010.   Three-Quarters of Americana's are barely making ends meet. Count 10 houses on your block and 7 of them are barely making it. YIKES!  Upper class neighborhoods the studies show 8 OUT of 10 are struggling. Truth is we were once part of that percent.  I use to think that we simply didn't make enough money and things would never change.  As long as we had kids we would be: Broke, In debt, and always fighting over money.  I was fed up! I became the "Rich Girl Gone Broke" I was sick of always being sick over money!  They say it is the root of all that is evil, well I disagree.  Being financially smart is freeing!  With more money in our pockets we can give more, stress less and enjoy our simple life. 

I paid the bills in our house and balance the check....Why not my husband?  Well it became a habit not in a good way but in a if he doesn't see it he can't complain habit.  I also did ALL the shopping in our house.  When my husband would say something about how much I spent at Target I would fire back with "You have NO idea how much it cost to feed and cloth 7 people".   He would say "there is no reason why we should be living paycheck to paycheck"  Oh course I would always have something back to say to that....This is where you insert a huge fight over money.  I was set in my ways.  I didn't want to hear any of his ideas on how we could save money.   It wasn't going to help.  

One day I was reading a post on Facebook about Dave Ramsey.   I had heard of Dave and his program before, his lifestyle changes didn't seem like something I would ever dream of doing.  This time something was different, something clicked.  I was done being broke all the time, always telling my boys no we can't afford things, and fighting over our lack of money. I THOUGHT I was doing my best, buying store brands, shopping the clearance racks. I soon found out it wasn't a income problem it was a spending problem.  I spent about an hour looking around his website, watching a few videos, and reading success stories.  The cost of the 12 week course $100.  Truth is I didn't even have the $100 to take the course.  I printed off his budget forms and free tips then sat down to make a budget.  I was shocked to see just how much money we should have at the end of the month, how much we spent on random things, and just how much debt we had.   Close to $7,000 in credit card debt.  How did that happen?  I hardly used credit cards.  Well, here and there it added up to $7,000.  That made me sick to look at it.  Every month we were paying over $450 a month just in credit card bills.  I started figuring out how much better we would be off if we had that $450 a month in my pocket.  The thought of being debt free seemed like sweet relief.  I sat down to see how I could budget lunch money for the boys, fun, date nights, tutoring, food, and more.

I was on a mission to go broke!  Yep! Live like we were poor again.  Those day were LONG ago.  When my husband and I first married in 2001 we lived in Goshen. (If you're from the valley you know living in Goshen was a sign we were REALLY broke)  We shared a 3 bedroom house with our son, my husbands friend and his son.  We got paid a quarter of what we make now.  As my husband finished school, got a promotion and a few raises.  Our lifestyle changed.  We moved into our own rental, bought newer cars, went on vacations, bought our own house (with almost $2400 mortgage YIKES), our clothes got designer labels and soon we were always fighting over money.  Pretty much the one and only thing we would fight about.  Fast forward 10 years with a plan to be debt free by 33 and here I am sharing coupons and money saving tips to others. 

Back to Dave.  His number one piece of advice pay CASH! I wasn't exactly sure how that would help me.  I didn't really use credit.  I only used my debit card.  Just like cash right....WRONG!  More on that in a bit.  Second piece of advice make a budget.  Oh and STICK TO IT! It doesn't have to be so hardcore.  Simple budget you can stick to at first. You will see you will find money just knowing where your money goes.

Here's how to get started.  In two basic steps.


1)Make a list of a few categories.  Food, Household, Fun, date money and Gas (Fill in others that you may spend regularly.  These are the basic 5 I started with)


2)Take a look through your banking statements and roughly added up what you spend on Food, Household (Trips to Target, Walmart,etc), eating out, going to the movies "Fun" things, what (if any) you spend on date night, and gas.  Write that average down over 2-3 months next to each category.

It's really that simple. Now that you know what you spend figure out how you are going to divide it up each month.  I divide my monthly cash stash in half.  On the 1st and 15th of the month I pull out my the set amounts for each category and stash them in labeled envelopes I made from card stock (I just started using the $1 coupon holder from Target I labeled each slot with my categories. I also have a slots for my Extra care bucks and Register Rewards. Its working way better than the envelopes for me.)

Here's is a example of what it looks like:
 Food- $500
Household -$200
Fun-$150
Date $100
Meds- $50
___________________________
Total $1,000

1st of the month-Take $500 out.
Divide into categories
Food-$250
Household-$100
Fun $75
Date- $50
Meds-$25

15th do the same thing.

Now the trick is once it's gone IT'S GONE!  You can't pull more cash out.  It's like paying monopoly.  I suggest you start out with an amount that makes you comfortable then as you go along cut your food and household a little bit each month.  Don't try to cut the fun out.  Life is only worth living if your living it.  Everything can't be about saving and paying off debt. It's OK to have cash set aside to treat the kids to ice cream or to go out to see a movie with your husband.  When you are paying with cash you are less likely to add those "Extra" things when shopping.  You will think twice before tossing that clearance shirt or another toy in the cart.  I was amazed how much money we have saved just paying with cash.  Do it for a month I bet you will be amazed with just how much you will save too!



Not buying the cash?! Here's a tip for credit cards with perks or using debit cards.

I know many people that have credit cards with perks or just plain don't like the idea of cash.  Try doing this:

*Keep a check register in your wallet when you purchase things subtract it from your budgeted amount.  Once you have hit your set amount game over.  No more buying!


More tips for paying cash and not breaking the bank on every day needs:

* Have a set amount you take out every month for clothes even if you don't need them. Stash it away until you do! Even $5 a month will help ease the pain of back to school shopping.

* Same goes for gifts and parties. Set aside money for birthday gifts/parties. Even if your kiddos birthday is months away start saving now! Pick a theme early and every month grab something you will need for the party. Soda and Juice one month, some paper products next month, decor the following month and so on. It feels like my boys are ALWAYS going to birthday parties. They can break the bank FAST! I always walk the back aisles of Target and use my "party" money to snag good toys on clearance. I have a stash of toys we use for birthday party gifts. I also keep a box in the garage of toys I get for my boys through out the year for Christmas or their birthday's .

* Keep the change. I have a large jar of all the change I get back from purchases in my cabinet and every 3 months I use it to stock up on meat, do something extra fun with the boys, or get my hair done. This could work if you are doing credit/debit as well just around the amount of money UP and keep track of the change. (Bank of America has a "Keep the change" program where they round up the purchases for you and put the change in your savings account.

* Don't be so hard on yourself. It's OK if you don't get it right. Trust me I had plenty of epic fails while doing this. I also have had a few good cries over how we USE to leave. Including the time I sat in staples parking lot crying because I just spent $13 on coupon inserts and it only left me $53 for a week. Thank goodness my husband brought me back to earth and said "It's OK if we don't get it right the first time, it's a learning processes" That is SO true.  

*Buying food and household items together in one transaction doesn't have to be tricky. When you get home highlight the food items, household items and tally them up and replace the money from which category you paid for it from. (Or if you are using debit/credit subtract food cost from food budget and house from house) Example:

Target $75.02
$44.02 on Home
$31.00 on food

Food Budget $250
Minus $31.00 from Target
_____________________
Leaves you with  $219 for food until payday. 
(If you paid for it out of Household funds take $31 for the food slot and place it back into the household funds)


There is a quote the military uses:
 "There is no trying...Either you do it or you don't" 
That kind summed it up for me.  Either I was going to save money and live a better or I was going to stay in this slum forever.

I am happy to report I will make my FINAL car payment this week (A whole YEAR early) and by May we have our 401k loan we took out to buy our house paid off as well! YIPEE!! We will continue to live like we still have those payments and apply them to our student loans to help pay them down faster and in less than 2 years we will be DEBT FREE! $25,000 in student loans and all!  By being debt free I can my change family tree of being in debt.  The only thing I knew about debt was you would always have debt, a car payment and live paycheck to paycheck I will teach my boys things I was never taught like how to stay out of debt and how to live a life FREE of money worries.  Saving money and buying off debit isn't easy, if it was 70% of American would be doing it.  I can tell you ...it is worth every penny pinching moment when one more thing gets paid off.

If you have a Dave Ramsey or "How I save" story you would like to share with "Make Cents to Save" email me at
nscholl21@me.com

For more information on Dave Ramsey's programs check out
www.daveramsey.com

If you have questions, tips, or more would like more information on couponing/budgeting classes.  Please feel free to email me
nscholl21@me.com