The question so many people ask is, “How do I save money when I have nothing left? I’m broke.” That’s the same question we had. We had cut all the obvious things, and made big changes, as I mentioned in part 1 of this series. Let me share with you the next steps of our story and some ways you can “find” and save money.
Also in part 1, I talked about how we moved in the direction of me coming home to homeschool our kids. I explained our two year plan, telling you what steps we took to meet our goal. You need to know that it wasn’t easy. Sometimes on the other side of something, we forget how hard the thing was when we were muddling through it. So, I don’t want to say, “Just stop doing ______ ” or “Just be sure to do ______.” The concept can seem simple, but not to someone trying to make heads or tails of this beast named Finances.
What happened after the two-year plan
Remember, our income was cut in half, and we were at a loss as to where to go from that point. With almost no extra to pay down debt, we had no idea how to pay down the student loans we still had. That’s when we discovered Crown Financial Ministries’ Debt Elimination course.
Neither of us can say that we were regularly subject to wise financial practices. However, according to cultural standards, we were “good” with money: we always paid our bills on time and mostly kept the checkbook balanced. As good as that sounds, it’s deceiving. We were bound to all that debt and burdened by the weight of carrying it all, even if we could manage the payment each month. Truthfully, sometimes manage was barely manage.
It wasn’t until we worked through the Debt Elimination Workbook that we really began to understand how poor of an understanding we had. As assigned in the course, we began writing down what we owed our creditors, tracked daily spending, and at last saw how ugly the real picture was. We were convinced that we needed to be keeping better records and implement a budget.
The course also recommends using the envelope system and, therefore, cash for purchases. Our envelopes were and still are for groceries, gas, auto needs, miscellaneous stuff (eating out, birthdays, etc.), and our little farm expenses. We then set up a separate savings account so that we could plan for insurance and taxes and pest control and not be caught by surprise during the year. This was huge for us, and one of the the most important steps we took.
Even with all this, we still at times defaulted to the credit card. You know that funny little Murphy’s Law? “Anything that can go wrong, will go wrong.” Yep. That one. When you have no money saved, and you’re barely scraping by, the only thing to do in an emergency situation is borrow money. While we didn’t use the credit card freely like we had in the past, there were times when we felt we had no choice. It is a never-ending cycle, friends!
Kicking it up a notch
That’s when we got wind of Dave Ramsey. I’ll be honest, he’s hardcore. He’ll tell you like it is, and most likely hurt your pride and your feelings. Nevertheless, he knows what he’s talking about and can help you get out of the financial dump.
We began our Total Money Makeover on one teacher’s salary! We stopped spending, and started saving so that we could have a cushion for when emergencies come up. And ya’ll, they will; I promise they will!
It took us some time to get an emergency savings fund, but when we did, that was a total game changer. The difference is, when you have actual money to pay for emergencies, like the air conditioner going out in June in the South (yes, that is an emergency!), you aren’t digging a deeper hole. Many timescar we had to replenish our emergency fund following said emergency, but we were paying ourselves back interest free instead of someone else.
How did we save money when there wasn’t much to save?
Along with continuing with those things I mentioned in part 1, here are some ways to save money when you’re broke:
- Eat cheap. Like beans and rice cheap. We did this multiple times a month.
- Sell stuff, lots of stuff.
- Come up with side hustle. I started selling crocheted blankets and hats and scarves. Chris would at times have odd little computer jobs, and everything we made, we either saved or threw at debt (depending on what phase we were in). For more side hustle ideas, check out these.
- Use “extra” money to pay debt. When income tax time came, we finished our emergency fund and used any remaining refund to pay on student loans rather than take fun vacations.
Those first steps were huge for us. It was then that we could begin really making headway on our remaining debt. Since we had multiple student loans, we started with the one with the lowest balance. Once we kicked one out, we started on another, adding the monthly payment from the first to the second, and so on–the debt snowball it’s called. It takes time; sometimes lots of time, but it’s so worth it!
Are you ready to kick debt to the curb?
You’ll work hard, crazy hard. It will get tough, then tougher until you start making headway, but the freedom that comes from being debt free is amazing! Hard work pays off. Think about how much money you would have left each month if you didn’t have credit card payments or student loans or car loans. You are talking hundreds, my friend, hundreds.
Are you ready? Join me in kicking debt to the curb!