My husband and I are frugal. In fact, though we had four kids before we were 30, we still managed to be completely debt free (including our mortgage) before we were 40.
And just as importantly, we have managed to stay debt free, despite funding college degrees for our four kids, and two weddings thus far. It hasn’t been easy, though I must admit I do find thrifty living to be fun. So if you’re ready to make some changes in your life, adjust your spending habits, and start your family on the path to being completely debt free, then read on. By adopting the tips outlined below, it IS entirely possible for the average American family to have a wonderfully enriching and full life, without going into debt. It takes planning, and dedication certainly, along with a willingness to adhere to these core principles.
1. Never buy IMPULSIVELY – HAVE A PLAN. Every purchase should be conscious and deliberate. Do you really need this? Or are you simply shopping for the sake of shopping? Do you find yourself shopping because it’s just “something to do?” Many people consider shopping a hobby. They do it for fun, for a girl’s day out, or even when they’re stressed or bored. Merchants know this. They market to our vulnerability. They have studied us, and know what tempts us. They know just where to place “it”, and BAMM – they’ve got you! If you live by this first “rule”, and don’t cave to impulsive buying, you will find many purchases simply don’t have the appeal after some thought and consideration (and the passage of time). Knowing the true cost of an item, including the potential interest payments too, can really take the seductiveness out of a spur of the moment buy. And equally important, impulse buying doesn’t allow you to be a savvy shopper either. By planning your purchases in advance, you are able to comparative shop, and really do your homework, thereby allowing you to get the very best values every time.
2. Don’t buy into “KEEPING UP WITH THE JONES’ ” MENTALITY – Americans, more than any other culture, I believe, have a fetish with comparing ourselves to our peers and neighbors. We want what others have, and are often willing to borrow (go into debt) to have it. The biggest culprit here, I believe, is with our homes and cars. We may see the neighbor remodeling their kitchen, and all of a sudden we are no longer happy with ours. And if it means going into debt to make our dreams a reality, then so be it. Sound familiar? Well, that “Keeping Up with the Jones’ mentality” is costing you and your budget big time. Being satisfied with living a more simple life, with less debt (or no debt), can be rewarding in and of itself. And when others are fretting about being strapped to their debt, and expensive lifestyle, you can breathe a big sigh, and be glad you opted out. It really is quite liberating.
3. LIVE BENEATH YOUR MEANS – Living frugally with less than what you can actually afford, is another great way to stay debt free. If you spend less than you bring home, you will gradually build up your rainy day fund, making it less likely you will need to go into debt down the road when an emergency occurs. And it will happen. It might be the furnace, the car’s transmission, a sudden job loss, an unexpected health scare, or sadly, a funeral. Living beneath your means, day to day, will leave you prepared and able to handle these unexpected life occurrences, without having to run to the bank or beg your relatives for a loan. And if you’re one of the few lucky ones, who never experiences that unforeseen financial emergency, you are building your nest egg and future financial security. For example, living in a smaller house will cost you less in mortgage payments, as well as less each month for heat, maintenance, insurance, and taxes. Several decades ago, families were happy to have children share bedrooms, and average home sizes were cracker boxes compared to the mega mansions of recent years. Homes used to have one-car garages; now we expect three stalls at a minimum. And those mega mansions have to be filled – filled with furniture and belongings. More stuff to buy, more stuff to clean, more stuff to need repair, more stuff to fill up our lives. There’s been a new trend of late, as some are yearning to go back to smaller homes, so the tide may indeed be turning now. A good trend I would suggest. Warren Buffet, one of the richest men in the world, still lives in a very modest home, though certainly he could afford much more.
4. THINK CREATIVELY when it comes to FUN & ENTERTAINMENT – Having fun does not need to cost an arm and a leg. Fun on a tight budget is possible, and often just as much fun. It might take some forethought and a little more creativity, but learning to get out and about without pulling out your wallet is entirely do-able. Whether it’s going on a picnic or bike ride, or checking out the stars on a beautiful summer evening, there are countless ways to build ample fun in your family life without busting the bank. In fact, many of the free (or nearly free) activities tend to get bigger raves than the more expensive excursions in our family. Instead of going out to eat at restaurants, why not host family and friends at your home for BBQ’s and potlucks. And game night can replace attending high priced, over hyped events. We do this, for the most part, and our calendar is full, as are our lives and pocket books too!
5. When you must buy, ALWAYS BUY AT A DISCOUNT – There’s always a sale or one coming soon in the good old United States, so there’s really never a good reason to pay full price for virtually anything. Appliances can often be purchased at steep discounts if you buy last year’s floor models, or scratch and dent pieces. They’ll still come with a full warranty, so why not bag an initial savings of 25-50% right out of the gate! And now, these days with Craig’s list, garage sales and Ebay, reselling is in vogue and easier than ever. Buying someone else’s unwanted “stuff” is truly a win-win. It puts money into the sellers hands, saves the buyer considerable dollars, and is good for the environment (keeps landfills from filling quite so fast). Considerable discounts can be had by the savvy shopper willing to make treasure hunting a quest. Sure, there are some things I’d never buy used (underwear and mattresses for sure), but most items can be found for pennies on the dollar if you are willing to wait to find them. My good friend, who is also an avid garage saler, keeps her eyes out for things I need, as I do for her. And don’t buy into the notion that “you get what you pay for”. It’s simply not so, in most instances.
6. BE ORGANIZED – An organized person will save money. “Why is that?” you may be saying. Well, an organized person knows what they have, and where it’s located. For example, if your workshop area is well organized, you will know if you have that specific screw or bolt you need for a new project. The less organized person will instead head to the store, and purchase the item, though they may already own it at home (unknowingly). The organized person will keep warranties (along with receipts) so that when a product goes bad, they have the paperwork necessary to making a warranty claim. And organized person will spend less on gas, since they keep track of when they are running short of basic necessities, and don’t have to make quick trips to the store because they’re out of milk or bread. You get the picture. The examples could go on and on, as to how being organized helps your financial bottom line. From keeping accurate records for your car maintenance, thereby helping your car last longer, to keeping an organized fridge so food (shoved to the back) doesn’t go to waste and spoil, an organized life will no doubt save you thousands over a lifetime.
7. Learn to BE HAPPY WITH LESS – A happy life, does not necessarily mean a life (and home) filled to the brim with stuff. Though the commercials and ads seem to be brainwashing us into thinking we must own certain things in life to live the “good life“, it just isn’t so. For those trying to live debt free, life becomes more about relationships with others, friendships and experiences. You can find many a rich man who is no happier than someone with very little in terms of material wealth. When you spend more time for relationships, and less time on working for money to buy that “stuff”, you may actually find you are happier. So while we still have time in our life, why not remake you life now. Focus on what you value. Maybe it’s getting back to your roots, going back to church, re-igniting relationships, or rethinking what you value most. Spending our time and treasures in those areas, rather than what we’ve been brainwashed into thinking will make us happy. It requires an inward reassessment, and can be quite liberating.
8. BORROW & SHARE – We Americans seem to have gotten the notion that it is a race to see who can die with the most toys. We’ve become obsessed with accumulating, so much so that a whole industry has emerged, just to store all of our stuff (self storage). What happened to the concept of borrowing a tool or piece of equipment from a friend or neighbor? Do we all really need to own our own 20′ ladder for a once a year project? Borrowing and sharing with others will not only save money, but also save precious storage space too, allowing us to keep our homes more organized and clutter free. The roaster that we use once a year at Thanksgiving, the punch bowl for the occasional bridal shower, the tile cutter or wallpaper steamer, the folding tables and chairs – are all things (amongst many others) we can borrow and share with friends and relatives. And we are not only saving money and resources, we are building relationships too.
9. Learn to DO IT YOURSELF – Instead of automatically hiring out jobs, why not learn to do things yourself instead. You may find it exciting and rewarding, and in most situations will be much cheaper. From the small things like coloring your own hair or grooming your pet, to the bigger things like home improvement projects, most people will find they are far more capable than they give themselves credit. Start out small, and as your confidence builds, try more do it yourself projects. Get the kids involved too, and make it a family affair. You’ll be teaching your children valuable life skills, while also instilling the value of saving money at the same time.
10. TAKE GOOD CARE OF WHAT YOU OWN, it will last longer. Cleaning and routine maintenance of your home, for example, is about more than just wanting a nice “looking” place to call home. Taking care of one’s belongings will, in most circumstances, greatly extend the life expectancy of many items you own, saving money. Regularly vacuuming your carpet, cleaning your refrigerator coils, emptying your vacuum (prevents dirt filtering up toward the motor), changing your furnace filters, and occasional washing down your kitchen cupboards, are a few of the numerous household chores that will save you thousands of dollars over the course of your lifetime. So the bottom line is that by taking good care of what you do own, you will help it last years, and sometimes decades longer, thereby greatly delay the need to replace those items. In my home, I fully expect some of my belongings to last my entire life, because of the way I care for them.
By living life by these basic 10 rules, only going into debt for a true emergency, you’ll find that you slowly free yourselves from the grips of the debt that has enslaved you and your family. Slowly, you will find a new freedom emerges, as your life becomes yours again. Not being indebted to anybody is liberating. You will live a more stress free and deliberate life, one that is focused on relationships, and your values. And that truly is living the American Dream, in my mind.
Other helpful related articles by this writer:
8 Tips to be Debt Free Before 40!
101 FREE THINGS to DO – How to Have FAMILY FUN on a Tight Budget!