Tuesday, August 26, 2014

How we made little/big changes and saving $20,000/year.

 
Over the past year, my husband and I have sat down and talked a lot about finances. The talk had mainly focused around our desire to travel {with the kids} across the country, visit new states, discover parts of our history, and feel free from this idea that money is an object that holds people back from their dreams. Unfortunately, it is just that. Money buys things. Money buys experiences. Money even sometimes {briefly} buys happiness. What money doesn't do though is have control over us. That is, unless we let it.
 
Now, before I go any further, I have to preface that although we are far from rich or even close to it, we do alright. Our family has never had to live paycheck to paycheck, we have never been on a budget, and we are able to vacation and spend without the stress of finances {for the most part}. For that, I am thankful.
 
However, that being said, I still felt like we were being tied down with bills, projects, and ongoing debt. I understand this is a season of our life---we're 27 and 28 with student loan debt, new cars to pay off, and of course a mortgage. Not to mention two children who didn't exactly come into this world for free,and certainly don't live in this world for free. I know, I'm preaching the choir of millions of people out there who live the exact same lives we do.
 
But we wanted to be free of all this.Sooner, rather than later.
 
We wanted to live less on things and bills and more on life. Go out more. Travel more. Give more. Specifically, this last part. To give. I have a lot on my heart on this topic and have written this post on giving so many times {in my head}, and need to actually sit down and spill it all out onto the keyboard. I'll save it for another day, but a lot of my reason for wanting to get rid of debt is so that we can live more of a life of giving. As we all should who are more fortunate than most of the people in the world.

What is money anyway really if you don't know where you will be 10 years from now, 5 years from now, or even tomorrow? What will it buy you when you're gone? How exactly will it provide us with happiness when it's simply a little green piece of paper?
 
I know those are just lingering questions that don't actually require an answer, but an answer that we all know far too well. Money shouldn't be anything but a means to something else, but man, it sure does hold a lot of power.

And so, my husband and I started making changes over the course of a year. Some big. Some small. But necessary changes at that. At times they didn't seem significant, and many times I would ask if it was really necessary, but I always came to the same conclusion each and every time: absolutely.

So what have we done?

1. We refinanced our home in 2013 & got a 15 year loan. - 1,000/month 1250 a year {savings overall in 15 years, monthly payment the same} Our interest rate went from 5% to 2.5% and so we decided to cut our mortgage to 15 years, and our monthly payment stayed the same! If we stay in our home for 15 years, we saving 150,000 in comparison to our first mortgage. Even if we do not stay 15 years, every monthly payment that gets paid means more money for the next home and less going to interest. Best financial decision we have made to date.

2. We switched to cloth diapering/cloth wipes. - $50 month savings/ $1200 total estimate . When Graham was about 4-5 months old I finally took the plunge and placed my first CD order. My first of two ever really. I had been wanting to make the switch not for the financial aspect, but mainly because we were trying to get rid of as many toxins in our family's life as possible. Disposable diapers being one of those. Thankfully, it came with a financial savings as well.

3. We sold Andrew's BMW and got a Honda Lease- $400 month savings/4800. I'm embarrassed to even say that we ever had such a ridiculous car payment, and for what? Amazing how kids {and growing up} really puts things into perspective. Not only did we sell our luxury car, but we went with literally the most basic Honda {which is super nice}, and are saving money on monthly payments as well as gas. My only regret is not doing this sooner.

4. We got rid of all the cable and kept basic only. -$80 month savings/$960 year.  It's almost been a year since we got rid of all our fancy channels, but I honestly couldn't tell you that I miss a second of it. We kept the local channels only package because it was cheaper with the internet, and now only pay $50/month for our internet and TV, in comparison to the $130 we were paying before. I know some people that pay $200+. So what do we do now? We got Roku {a one time $100 fee} and use logins of family/friends and pay nothing monthly!

5. We paid off a student loan. $50 month savings/ 600 year. I wish I could be sitting here saying we paid it all off. One day... one loan at a time.

6. Sold things that were cluttering up our house. $800 savings. From garage sales to instagram sales, we started getting rid of junk/stuff that wasn't being put to good use. Our goal is to do more of this throughout the year {and every year}, and donate whatever we don't sell.

Total monthly savings: $1580 month {$680 actual, without including mortgage interest}/  $19460 year.

There were other little changes that we made in our lives that helped us financially, and we continue to be amazed by the things that we thought we needed and when it was gone we barely even noticed, nor missed it. There are also things that we have been doing for years that continue to save us money in the long run– kids' college funds and our retirement fund.

A little confession here– during one of our "talks" about our dreams for the future, we got to a point where we wanted to make big changes fast– we are talking getting all debt paid off in a year---no car loans, no student loans. In order to do that, we thought about selling our home and moving to Oklahoma {where our in-laws live} for a year and working out there and putting all our money from working into paying off these debts that we felt were dwindling ever so slowly.

Obviously we didn't do that, and have no intention of doing so. Although it does seem lovely to have everything be paid off in a year, we decided that we needed to be patient and with the changes we have already made, we should be reaching this goal within the next 5 years.

Five years seems like a long time, but in the grand scheme of things... it's nothing.

 

6 comments:

  1. Definitely some smart "grown up" choices! It is funny how our priorities change as we get older :-)

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  2. You go girl!! We cut cable and Internet out of our house 3 years ago. Honestly I don't miss it at all. I can stay up to date with everything through my phone or the library.
    We have been working on becoming debt free as well it's a process that's forsure. We paid off around 8,000 dollars in debt just last year it's insane how much interest rates are these days.

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  3. Way to go!! We re-financed our last house 3 times and we only lived there 5 years. We just sold it and had enough equity to put over 30% down on the new house and cut our mortgage in half we were also able to pay off our vehicle loan and the rest of our school loans. It feels SO good to get rid of that debt!! Ofcourse, I'm married to a farmer...so we'll never really be 'debt free' but I'm glad to get rid of those monthly expenses!

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  4. When I came home from deployment and was setting up a new apartment my husband and I decided not to get cable. Since he's in SC and I rarely watch real tv anyhow it didn't make sense. I did get internet and hooked a tv up to an old laptop so I just use Netflic and Hulu for tv. I miss a few shows. CBS really needs to start streaming their shows. But I'm happy to be paying $16/month for our streaming vs $60/month for cable.

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  5. Great choices! We follow Dave Ramsey and have absolutely no debt now. Paid cash for our car, no more student loans, no credit card debt, whatever. I love it!

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  6. My name is Glenn Baker and i live in USA Florida and i am a happy man today, I told my self that any Loan lender that could change my Life and that of my family, i will refer any person that is looking for loan to Them. If you are in need of loan and you are 100% sure to pay back the loan please contact them and please tell them that Glenn Baker referred you to them. scottlarry918@gmail.com


    Glenn Baker

    ReplyDelete


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