Getting Out of Debt: The Nature of Frugality

This past Wednesday, my husband made the last payment on his last student loan…meaning, except for our mortgage, we are now completely out of debt.  No credit cards.  No car payments.  No student loans, or loans of any kind.  In case you’re wondering, I am 26 and so is he (until September).  Today’s actually our 5th wedding anniversary, too.  When we got married we were over $100,000 in debt (not including the mortgage).  And now we are not.

That’s not all.  During this time, we saved up and paid cash for our “new” van (it’s a 2003 model, purchased in 2009) and our new furnace and a/c.  We’ve also increased our savings significantly.  We have a 401K, college funds for both kids, and a small emergency fund.  By September we’ll have our six-month emergency fund saved up, too.  (If you’re curious, yes, we generally followed the Dave Ramsey plan.)

There’s a lot that went into this huge change in our lives.  And I have to say, it is so reassuring to know that we really don’t owe anyone money.  If something happened, our cars wouldn’t be repossessed.  We have savings to pay for problems that crop up.  We wouldn’t be hyperventilating if Ben lost his job tomorrow.  We’re not living in a finely-balanced, highly-leveraged world filled with credit.  We’re living in a totally grounded, safe world where the vast majority of our needs, however unexpected they may be, would be taken care of.

That is amazing to know.

Today I want to talk to you a little about my role in this process, which has largely been to “save money wherever possible.”

Saving Money

My husband and I strive to model our marriage on the Biblical model, where men and women have different but equally important roles.  My role is not to be the breadwinner in our home, although I have worked (from home) at different points in time, and I do continue to work (blogging) to earn a bit of extra money.  This is not unlike the Proverbs 31 wife, who kept her home but also contributed through working some.  She did not have a “career” (nor do I), but she was resourceful in bringing in a little money while caring for her home and family.

My primary role, though, is to save money.  My husband earns (most of) it, and I choose where to spend it.  Of course, there’s some stigma attached to that thought: husbands working the days away while their wives spend money frivilously and indiscriminately.  That is not a Biblical model for marriage!

Truthfully my husband spends the money on investments (which he’ll talk about in a future post) and major purchases, with my input; and I spend money on the day-to-day needs of the house (with his input).

I take my role very seriously.  It’s up to me to make the decisions about the food we’ll purchase, the clothes we’ll purchase (for us and the kids), and so on.  These are not light decisions, they are not stupid decisions.  They are as important as the decisions we make on investing, just in a very different way.  And since I make these decisions, my goal is to do things in a way that is as frugal as possible, without sacrificing our health or safety.

Clothing

This one’s on my mind now because I’m planning my kids’ wardrobes for next summer.  I always shop a year ahead of time so that I can take advantage of sales and clearance.  Shopping smart means that I can save quite a lot.

Recently I went to Good Will and happened to find a sale, 3 items for $1.99 (up to size 5T).  I bought my son 5 pairs of shorts, 4 t-shirts, a bathing suit, a jacket, and 3 winter shirts; I bought my daughter 3 sundresses, 3 skirts, a shirt (I had more but she said she didn’t like them!), and snow boots.  For $16.  My son already has a couple more shirts and another pair of shorts, so he’ll just need some sandals and he’s set.  My daughter will need a few more shirts and shorts/skirts, and some sandals, and she’s set.  I might get away with under $30 for both for the summer.

Are the clothes new?  No.  In fact, some of what my daughter picked (she loves bright colors and floral designs) looks like it’s from the 80s.  Who cares?  She has clothes that are in good repair, that she likes, that fit her.

I wanted to go to The Children’s Place and buy the cute, preppy stuff.  I might, once the clearance hits $2.99 (it’s actually a great option in the winter to buy a new coat, I don’t find coats that cheap at any resale stores).  But I really have to weigh my options: is it worth it to spend 3 – 4x as much on clothes just to get new ones?  Especially for kids who will outgrow them in a season.

The one area I “splurge” on is shoes.  We know that poor shoes can cause problems with the foot arch and lead to back problems, so once a year we take the kids and buy them new, sturdy shoes.  We only buy select, clearance pairs, but we buy good ones.  Sure, spending $20 – $40 per pair is “expensive” compared to buying them for $2 at Good Will (which is where boots, dress shoes, and “fun” shoes come from), but it’s cheaper than healing back problems.

Making these choices to spend as little money as reasonably possible, and put on hold things I want is one major reason we were able to get out of debt.  Is $3 for an item of children’s clothing a good deal?  With many new items costing $10 – $30 each, you bet it is.  But it’s not the best deal I could get.  Choosing to wait for the best deal and take lower quality (not new) really helped me to save.  It’s the difference between spending $100/year on kids’ clothes and $250 – $300/year.  That really adds up over time.

Activities

A lot of people put their kids in a lot of activities…too many, in some cases.  They’re in preschool (I hear that averages $100/month), they’re playing sports, they’re taking swim lessons, dance class, cub scouts….  I could go on.  These activities all cost money.  Some moms sign up for health clubs like YMCA and take their kids to classes there.  I know our local YMCA costs about $800/year.

We don’t do any of these things.  No preschool, no gym memberships, no extras of any kind.

Our kids aren’t deprived, though.  We’ve formed friendships with others in our area and we plan our own special outings and activities which are free or low-cost, and we do these instead (especially with some of our homeschooling friends).  We will send them to AWANA this year, which is not that expensive (I’m not sure how much yet).  We do buy a zoo membership, and can actually go about March – November (though it’s open year around), which is around $100.

This fall I’ll start teaching my daughter to play the violin, and we’ll rent an instrument for the first month ($20) to see how she does with it.  We’d look into purchasing a basic instrument for $100 or so if it goes well.  This will be a special one-on-one activity we’ll be doing.

It is possible to provide your children with incredible and enriching experiences without spending all the money.  I’ll be blogging more about the materials we use (which we find free online or create ourselves most of the time) and the activities that we do over the next several months!  We are embarking on our first “real” homeschooling journey this year!  (Although we generally subscribe to unschooling, we will be loosely following a kindergarten-level curriculum.)

Food

I’m not going to take this on here, because it’s such a huge topic.  I’ve already blogged about it quite a bit, including Super Charge Your Grocery Budget and other grocery shopping trip posts.  I’m also planning to write a book about how we’ve handled this area over the next few months.  I got side tracked and felt not quite ready to write it this summer, and ended up writing Treat Yourself: Real Food Desserts instead, which comes out sometime in August!

Salary VS. Spending

I’m not going to disclose here exactly how much money we earn, but the amount has increased significantly in the last five years. 

But the thing is, we continue to live frugally.  It’s frustrating at times, because we see people around us going out to eat often (we don’t, even though there are healthy options here), buying new cars, taking vacations, and so on.  We don’t do any of these things.  It would be nice to say, “We have some money beyond what we require for our expenses, let’s do something fun!”  But we don’t.  We use roughly 40% of the money we earn for investing and saving.

A lot of people get caught in this “stuff” mindset.  “I work hard, I earn money, so I deserve to….” fill in the blank with whatever you like.  We thought like that once too…and we were $100,000 in debt.

It doesn’t matter how much our income increases, we will never, ever put “spending” above saving.  We will continue to max out our retirement accounts, the kids’ college funds, and our other investments first.  If there’s money left after that…sure, we’ll have some fun!

That is the true nature of frugality.  You will never get ahead if you increase your spending to match your income, or worse, exceed it.  It’s like the kids’ clothes…I could say, “We make enough money, I’m just going to buy them the $3 – $10 items because we can afford it and I like them better.”  Still not a bad deal.  Or, I could say, “I’d really like a newer/nicer car…and we can afford the payments.”  But with that mindset we would never get out of debt.

Getting out of debt is all about your attitude towards money.  Anyone can find a way to spend what they earn, buying cars, houses, vacations, etc.  But instead of thinking, “I can afford this” think “How can I spend the least amount of money until I meet my goals?”  Whatever is left once you have met your goals is ‘fun’ money!  As long as you continue to think, “I can afford this” (even if you can pay cash, if it takes away from your paying down debt/saving on a regular basis), instead of “What are my long-term goals?” you will never be out of debt.

It’s important to keep long-term goals in mind.  When I find myself getting frustrated that we “have” money but aren’t doing anything fun with it, I remember that I’m not making decisions with my money to amuse myself now.  I’m making decisions to have a financially secure future.  I’m making decisions that will allow my kids to go to college free (if they want), buy our family a farm, ensure we have steady income through our retirement, and are taken care of in the event of a job loss or other emergency.  That’s much more important than any outfit or vacation.

I’ve heard some say, “I don’t care about debt, I’d rather have the memories.”  You do not need to spend money to make amazing memories.  There are a lot of ways to connect with your family and do fun things without buying things!  I remember this every time I wish we could do ‘normal’ things.  There’s a reason why Dave Ramsey says, “Live like no one else…so you can live like no one else.“

Are you out of debt, or on a journey to get out of debt?  What has it taught you about frugality?