1 The Secrets We Used to Become Debt-Free

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1 1 The Secrets We Used to Become Debt-Free

2 The Secrets We Used to Become Debt-Free With a Family of 10 & How You Can Use These Secrets In Your Life Jennifer Roskamp Copyright 2017 By JR Publishing Find additional systems, solutions, tips, and resources to help you take the overwhelm out of your daily life at TheIntentionalMom.com Cover and layout design by MoniqueBDesigns.com. 2 The Secrets We Used to Become Debt-Free

3 Contents Introduction... 4 Chapter One... 6 Basic Smart Money Habits... 7 Chapter Two Common Budget Busters Chapter Three About That Emergency Fund Chapter Four Little Changes Can Make a Huge Difference Chapter Five Create a Money-Saving Kitchen Chapter Six Wealth Building Chapter Seven Be a Savvy Shopper Chapter Eight The Power of One Chapter Nine What Comes After the Power of One Chapter Ten When There s Not Enough Chapter Eleven Practice Living on Less Chapter Twelve Make it a Family Affair Bringing It All Together Resources Mentioned In This Book... 73

4 Introduction Does becoming debt-free sound like a dream? Maybe it seems impossible or unattainable to you in some way. Perhaps it is hard to believe that you, even you, could become debt-free. You may find yourself thinking that becoming debt-free is for those who have high-earning jobs with both parents working or family wealth that comes into play. My husband and I are living debt-free with a family of 10, and it isn t for any of these reasons. Much of our 20 years of married life were spent with only one income that amounted to less than $50,000 a year. Throughout our journey to becoming debt-free we endured pay cuts, layoffs, and job loss. How did we do it? How did we become debt-free in the midst of these life circumstances? We did it little by little. We made both little and big decisions that were financially wise, always keeping the future in mind. We set goals, we dreamed dreams, and we worked hard in bringing the things I share with you in this book to fruition. The thing is, none of these things are really all that big on their own, But, once these skills are all put into place and followed month after month, year after year, you can eventually end up being financially free and living free of debt just like we are. While these things won t be easy to implement, each one of them is incredibly powerful and all an integral part of the complete puzzle that is now our financial story. What you find in the following pages is powerful, and if being financially free is your desire, be prepared to work and to work hard. But, the view from the top of the debt-mountain is truly spectacular and worth every sacrifice we ever made. 4 The Secrets We Used to Become Debt-Free

5 Just like my husband and I, you can do it, too. Ready to get started? Your journey to financial freedom starts right now! See you at the top! Jennifer 5 The Secrets We Used to Become Debt-Free

6 Chapter One

7 Basic Smart Money Habits Being intentional with your finances doesn t just happen; you have to make it happen. Being money savvy, saving money, building wealth, developing wise spending habits, and knowing what to do when the money isn t there none of these things come without work. Before you can even put forth the work, you need to have the knowledge. It s a matter of knowing what to do before you can actually do it. - In this chapter, it s all about being money savvy. It s about having a basic plan. It s about gaining a mindset to be intentional in your finances. Here s how. Create a budget Your budget often needs to remain fluid as changes will need to be made, but it starts with creating a basic budget. Live by that budget Sure, it is nice on paper, but when it comes to intentional finances, you need to live your budget. Every. Single. Day. Set long-term financial goals You need a broad target to shoot for. Do you want to pay cash for a house? Do you want to get out of debt? Do you want to reach a certain income level? These would all qualify as effective long-term goals. Set short-term financial goals Once you have your long-term financial goals determined, you must create short- 7 The Secrets We Used to Become Debt-Free

8 term financial goals that will help you achieve those long-term goals. You can only eat an elephant one bite at a time. Pay yourself first Before you pay the bills, pay yourself. Pay yourself something. Pay yourself anything. Put a certain amount of money into savings. No matter how small, every time you have money come in, pay yourself first. If you are married, discuss your purchases first Of course there might be small things that don t have to be discussed, but if it is more than a $20 or $30 purchase, it should be discussed. Have an allowance for adults This is especially effective if you or someone else in your home is a spender. Oftentimes spenders don t mean to overspend. If they are given an allowance, overspending by mistake isn t possible. We ll touch on this more later, but having an allowance for every family member is so important. Dump debt Dave Ramsey speaks of the debt snowball where you are paying off debts from smallest to largest. I think this is awesome advice. That s why I used it in my own life. Pay cash This is pretty simple. If you don t have the cash for something, you better save for it until you do. Of course there are emergencies when this isn t possible, but overall you should have the cash on hand to cover whatever you are buying. Have an emergency fund You knew this would be on this list, didn t you? I cannot tell you the number of times that my emergency fund has saved me, but it is a large number. Start small and 8 The Secrets We Used to Become Debt-Free

9 build up to six months or so in an emergency fund. Then, only use it for true emergencies. In a few chapters I ll actually give you a game plan for getting an emergency fund going STAT, so, be ready! And, if you feel overwhelmed at the thought, no worries. Help is on the way! Live within your means This also means that if your income goes down, your spending does also. If you are always living within your means, there is no need for debt. Say no When it comes to being financially free, you will have to get very good at saying no in most cases. Unless your income is rather unlimited, you will have to say no to opportunities, even really good ones at times. Learn to say no to others. And, learn to say no to yourself. Use the cash envelope system This is a great way to encourage paying cash, and it is also a great way to avoid overspending. In addition, it is a way to break larger bills that may only happen once or twice a year down into smaller monthly pieces. That way when the bill comes, the money is there. Work hard Seems basic, I know. Work hard. If your income gets slashed, find a way to make more money. Get a second job, get a better job, work more hours, or come up with a way to bring in some income on the side. I don t want to make this sound easy. Believe me, I know that it s not. My husband went to school for four years in order to get a better job. However, in the long run, it was all part of working hard. 9 The Secrets We Used to Become Debt-Free

10 Shop smart Do your research before buying anything. Make sure you are buying the best thing for the job and that you are getting the quality you expect. You can do even better by waiting until the items you buy are on sale. I make it my mission to never pay retail for anything. Know the difference between a want and a need This line can get a bit blurry. Don t let it. Oftentimes if you aren t looking to buy an item after a few days, it s a want rather than a need. Define what a want means and what a need means to you. Wants are not bad, and I m not saying it s bad to buy things that are wants. I m simply saying it is wise to know the difference. Before you buy anything, it is beneficial to know whether you are buying something you want or something you need. Silence the naysayers If you have people around you who aren t financially wise, don t let them talk negatively to you about your decision to be intentional in dealing with your finances. You earn your money, therefore, you can decide how to spend it or not spend it. If there are people around you who are speaking down about your decision, maybe you need to keep your distance. Naysayers can really muddy up the waters. Being financially wise is all about being money-savvy first and foremost. It won t be easy, especially if these are new concepts for you. The things in this chapter are some great tools to get you started. 10 The Secrets We Used to Become Debt-Free

11 Action Steps to Take From Chapter One Create a realistic and honest budget. Need help with this? You can visit www. theintentionalmom.com/bootcamp to sign up for my free course that will lead you step-by-step how to create your own working budget Set three financial goals: one for six months, one for one year, and one for five years from now Establish a set amount to put into each savings account each month 11 The Secrets We Used to Become Debt-Free

12 Chapter Two

13 Common Budget Busters Let s revisit a couple of ideas from the first chapter more deeply. We ll take on budgets in this chapter and your emergency fund in the next. So. I ve talked before about why you want a budget and even taken you through the steps of creating a budget that works if you ve taken my free course. But. What if you just can t seem to make your spending meet up with your budget at the end of the month? The truth is, our money can slip right through our fingers if we re not careful, and we won t even notice the problem until the figures don t add up at the end of the month. So, are any of these hidden expenses blowing your budget? Bank fees or credit card fees Some, but not all, banks and credit cards have fees. In fact, you may be paying one without even realizing it. These are usually charged on an annual basis, and unless you are going through your statements line by line. you may not even be aware that you are paying these at all. First, look into all the accounts you have, and then decide whether any fees you may be paying are fees that you want to be paying. Bank fees and credit card fees are among the things that I don t pay for. The truth is, there are plenty of cards and bank accounts you can get that don t have fees. If you choose to pay these types of fees, make sure the benefit far outweigh the cost. Late fees These are pesky little things and again they are things that can go unnoticed. Library fees and Redbox fees are among the ones that I find the hardest to keep in check. But, maybe you struggle with something different. Even paying late fees for credit cards and loans or on various monthly bills can go unnoticed. 13 The Secrets We Used to Become Debt-Free

14 These types of things are generally smaller in nature, but if you pay just one or two of these a month, these late fees will really end up blowing your budget. Making impulse buys We all find things that we would love at the last minute, but these little exciting things so often leave us not quite as excited at the end of the month when our money has somehow vanished. Certain times these unexpected things can t be avoided, but when your impulse buy is only a want, sleep on it first. Marketers are smart. They know how to get you and I to tall for these things. Again, they may not be bad. But, the problem comes in buying what you don t need and can t afford because you decided to buy it on impulse. Not having a what if fund This is not to be mistaken with an emergency fund. This is a smaller fund that would come into play for a last minute birthday party gift or school field trip, your son s shoe that has gone missing, or when your coffee maker stops working (who can go without that?). This is a fund that is for all of those little things that annoy us when we need to buy them. Having the what if fun keeps us from just mindlessly buying them and throwing the purchase on a credit card. The truth is, we feel the purchase more if we re forking over the cash. Sometimes, feeling the pain of that purchase will cause you to make due without out that item. You might also decide that something else can fit the same purpose nearly as well. And, you might even decide that something was unnecessary in the first place. Gift shopping at the wrong time of the year We love showering our loved ones with gifts, don t we? However, this can also be a place where we can blow our budget really fast. In order to most effectively shop, which means saving the most money, it really is a year-round commitment. 14 The Secrets We Used to Become Debt-Free

15 I shop for gifts year round just by being aware of what s on sale when I m in store, spotting online deals, and purposely shopping when things are in their off season. Not having a budget for each person you buy gifts for Of course sticking to that budget is also a part of it, but predetermining how much you have to spend on gifts each year and then dividing that up between the people you have to buy for is key. As kids get older, their gifts get more expensive. How will you account for that? When one of our children gets a higher value gift for their birthday, this will make for a more lean Christmas for them. This is because each person has a specific amount for gifts each year, and it s an essential part of being financially savvy. Everything balances out. And, everything needs to work in the budget. Not looking into fixing things before replacing them So often when something breaks we head to the store to replace it. Oftentimes we could actually fix some of these things if we just put forth a little effort. When bigger things break we often call for the repairman, but even these things can be easily fixed at times, too. We saved more than $1000 last year by fixing and/ or installing three appliances ourselves by watching videos and buying all the parts on our own. Not adjusting your money out when your money in changes Whether you earn your income on commission, receive a cutback in hours, or even experience job loss or a layoff, your spending habits simply must be changed when this sort of thing happens. These changes are usually only for a time, but to keep spending as though your income stayed the same simply will not work when it comes to your budget. 15 The Secrets We Used to Become Debt-Free

16 Not being open and honest about money matters in your marriage It can be so hard to tackle difficult money issues in a marriage, but not facing and handling your money matters together means that they most likely aren t going to be faced or handled at all. Having a budget meeting once a month or so is such a good thing. If both people in a marriage or relationship choose to adopt the bury the head in the sand mentality, budgeting will be nearly impossible. Being open and honest about money will help keep things balanced if your relationship is one with both a spender and a saver. Not shopping around Whether it is insurance, cable or phone packages, or things at the grocery store, not doing your homework before making a purchase could be blowing your budget. Rates change, packages change, and things go up in price. Not making an accounting for these things and being a smart shopper is costing you money. Just because something was on sale yesterday, doesn t mean it will be on sale today. We can all have the best of intentions when it comes to the money we save, the money we plan to spend, and the money we actually spend. The best part is when all of these things actually go the way we think they will, but there are hidden expenses that can be blowing our budget and sabotaging our best efforts. Make sure that these 10 hidden expenses aren t blowing your budget! 16 The Secrets We Used to Become Debt-Free

17 Action Steps to Take From Chapter Two Research any and all fees you are paying on credit cards and other debt. Be aware of what you are paying Establish a set amount for each person you buy gifts for throughout the year Establish a what if fund this month with a certain amount being put into it each month as a line in your budget 17 The Secrets We Used to Become Debt-Free

18 Chapter Three

19 About That Emergency Fund I think we can agree that having an emergency fund is necessary. While none of us like to think about the unthinkable happening, the truth is, it can happen. Layoffs, job cuts, pay cuts. You just never really know. There can also be unexpected expenses that can appear without warning, and without an emergency fund, how can you cover them? The question becomes, how does one actually get an emergency fund? The short answer is, you need to build an emergency fund. Before your eyes glaze over and you find yourself thinking, easier said than done, starting your emergency fund really doesn t have to be as complicated as it sounds. In fact, it really can be easy. The truth is, the thought of building an emergency fund can be scary or daunting, but it doesn t have to be that way at all. Here are five things you can do to start building up that emergency fund fast, and you can start these today. Sell stuff Nearly everyone I know has more stuff than they can ever use. If getting rid of stuff is hard, I understand. It s hard for me, too. I have a hard time letting go of things we might use someday, and I also struggle to get rid of things that have special memories attached to them. But, do you know what I do love even more sometimes? Cold, hard cash. And selling stuff is a great way to get some cold, hard cash to jumpstart your emergency fund. Go on a spending freeze 19 The Secrets We Used to Become Debt-Free

20 The length of time you devote to a spending freeze can be personal to you, but 30 days is a great place to start. Unless things creep in that absolutely must be purchased, don t buy them. For example, you may need to pay a repairman to fix your washer (although thanks to the Internet you can actually make simple repairs on your own in some cases). However, many of us are guilty of buying plenty of things that are a want and not a need. These are the kinds of expenses that are targeted and annihilated while on a spending freeze. The second step here would be to put the extra money you will have during the time you are on a spending freeze into your emergency fund. For instance, let s say that while on your spending freeze you are giving up your daily Starbucks visits. This could easily cost you $20 a week. When you don t spend that $20 a week at Starbucks, put that money into your savings. Start using rebate or cash back programs My two personal favorites are Ibotta and Ebates. All of these programs are free to join, and they all pay you back on things you buy anyway. Please see the Resources section at the end of this book for the exact place you will want to go to get the best place to sign up and get free bonuses for using these links as well. Ibotta is an app that you download on your phone. You clip coupons in the app for the things you re going to buy anyway (think grocery store or pharmacy purchases), and then you take a picture of your receipt and the barcode of the item once you purchase it. That s it. It really is that easy. The amount you save with your Ibotta coupons get added into your account. Then, 20 The Secrets We Used to Become Debt-Free

21 you can have your balance transferred to a variety of gift cards or even transferred to a PayPal account. Just recently, I paid for all my food and extra expenses while traveling using the cash from my account in Ibotta. Ebates, which is also free to join, is a program that offers you cash back rebates on nearly anything you purchase at any kind of store online. Clothing, household products, and even some services can all be found on Ebates. Once visiting the website you want to shop at via Ebates, everything you purchase at that store becomes something you earn an Ebate rebate on. Can you imagine how much money you can earn if you already shop online and use Ebates for things like back to school shopping or Christmas shopping? If you are a regular online shopper, your savings really start to add up quickly! Downgrade or downsize your cell phone plan, your cable plan, or any other monthly service that you can It is so easy to think we need more than we actually do. My husband and I currently pay $90 a month for both of our cell phones with more calling, texting, and Internet service than we could ever use. Then, we have a simple prepaid phone for our kids. When they are at home, they have ipods they can use for Internet rather than our kids having an expensive cell phone tacked on to our plan. This setup has served our family well, and we have three teens! Would our kids love the fancy cell phones and the expensive cell phone plan? Sure they would. But, when you are looking to cut expenses for the overall better objective, sacrifices simply must be made by everyone if you are to get to where you are going. Here s another example. We got rid of our cable years ago, and haven t missed it one bit. But I can tell you, thinking about getting rid of it was much worse than actually doing it. 21 The Secrets We Used to Become Debt-Free

22 When you downsize, take the money you were previously paying and dump it into your emergency fund. Stop paying for what you can learn to do yourself Conveniences are so convenient. But, they are also something you pay for. And, if you want to get $1,000 in your emergency fund, you are going to have to get radical. My husband and I have learned to repair many of our own appliances, I cook and bake so many things from scratch, and there are tutorials all over the Internet that will teach you how to do things like cut your kids hair, take on various DIY projects, and even sew basic things like curtains. I have two kids in cloth diapers. Do I sacrifice convenience in doing that? Sure, but I also save a ton of money in doing so. And saving money is how we got out of debt. I m guessing saving money is something you d like to do as well. Stop paying for conveniences and put the savings in your emergency fund. Why? Because you need an emergency fund. We all do. Get radical in applying these five things and you ll get to your first $1,000 in no time. 22 The Secrets We Used to Become Debt-Free

23 Action Steps to Take From Chapter Three Sign up for the programs mentioned in the Resources section at the end of this book. You ll even get $10 free for signing up! Brainstorm three different things that you are currently not making that you could make on your own. Search the web for ideas Choose one thing to downgrade in the next month and then do it! 23 The Secrets We Used to Become Debt-Free

24 Chapter Four

25 Little Changes Can Make a Huge Difference When it comes to keeping more of our hard-earned money, there are a lot of things we can do to save money. And, it starts in the home. In living frugally over 20 years, I ve picked up so many tips and tricks like what you will find in this chapter. And yes, everything listed here are things that I ve done or things that I still continue to do in an effort to have more money for the things I really want. General areas Your dryer Because the dryer is the most expensive appliance to run, use it wisely. Run loads one right after the other so the heat stays in, and if you re really looking to save money, line dry. It can be done even in the winter. I know because I did it for an entire year. Hang curtains in general, but especially thermal curtains These curtains make a huge difference in keeping out drafts during the winter and heat out during the summer. Electricity Turn off lights, fans, and various electronics when they aren t in use. My kids are notorious for keeping their CDs playing with no one listening. It really does all add up. Heat and air Play around with your heat and your air conditioning. I often keep our heat way turned down and just use a space heater in the room we are in all day. Between that and the fireplace, we can stay warm without having to pay the big bucks to heat our entire house with the furnace. 25 The Secrets We Used to Become Debt-Free

26 Play around with it, you might be surprised to find that you can dial up or dial down and still be comfortable. You just have to be willing to experiment and become warmer or cooler in different ways. In the kitchen Cook smart Make things from scratch whenever possible, and there are many possibilities these days with recipes for just about anything all over the web. This doesn t just apply to food, either. You can make your own cleaners, too. Paper towel Don t use paper towels, use rags instead. Plan smart Cook in bulk, make budget friendly recipes, and feed your family healthy foods. This is not only the healthiest option, but you can also bulk up the things you make like bread, cookies, and brownies by adding in things like flaxseed meal. Much of this just takes a plan. It takes a meal plan, it takes finding the recipes you need for things, and it takes planning the time to make these things. Keep in mind, when it comes to radically saving money, you are trading your time for more money. But really, aren t you doing this when you go to work everyday? You give them your time, and they give you a paycheck. It s all in how you look at it and then what you re willing to do. Alter recipes Do this to make them more budget friendly. Substitute expensive ingredients for less expensive ones where you can, lessen the amount of expensive ingredients that a recipe calls for, and don t choose recipes that are full of expensive ingredients in the first place. 26 The Secrets We Used to Become Debt-Free

27 I love a great meal. But, in an effort to get radical in saving money practical meals that are created and served intentionally to save money will save you a ton of money. Water Drink plenty of water. Often when we feel hungry, we could be dehydrated. Your body will thank you, but so will your wallet! General savings Reuse and repurpose Avoid the temptation to get rid of something when it might serve a different, yet equally useful purpose. Before heading out to buy something you think you need, take a look around to see if you have something that will work. Make due Sometimes it is just smart to make due with something that you already have. Might something work better? Perhaps, but intentional finances means that at times it will be best to make due. Do without Yes, sometimes we just have to do without something that we want, and at times, even something that we need. This isn t easy, but it is essential at times when it comes to being financially wise. These are all basic things you can do to save money and get smart with your finances. Notice I didn t say they were easy. It can be done, however, and my husband and I (along with our kids) are proof of that! 27 The Secrets We Used to Become Debt-Free

28 Action Steps to Take From Chapter Four Commit to doing more than one load of laundry at a time Create and implement a plan to search out things left on that aren t being used. In our home, this is part of our morning, afternoon, and evening chores Dial up or down (depending on the season) one degree for the next two months be sure to monitor your bill to see the amazing results! 28 The Secrets We Used to Become Debt-Free

29 Chapter Five

30 Create a Money-Saving Kitchen In the last chapter I mentioned some money saving things you can do in your kitchen, but there are plenty more things that need to be mentioned when it comes to saving money in the kitchen. In addition to these being simple things you can do to save money, these are also things that you can do to be more mindful of the world in which we live. With so many foods, dishes, and products of all kinds coming and going, the kitchen is an important place to focus on making smart decisions. You really can do small things to have a frugal kitchen, and they take little to no extra effort. Ditch the paper towels There is nothing you can do with paper towel that you can t also do with a rag or cloth. Not only are paper towels an expense, they are also unnecessary waste that can easily be eliminated. Use cloth napkins I m all for kids being polite while eating. This includes wiping their mouth and hands, but this is something that doesn t have to be done using paper napkins. Instead, get some really festive cloth napkins. There is something so special about using cloth napkins, too. Cloth napkins have a way of making the most ordinary dinner extraordinary. Use an assigned cup or water bottle The amount of waste that a family like mine could create using paper cups or even using a different cup that needs to be washed after every drink would be astronomical. Instead, we have a nice cup or water bottle that everyone uses all day. Simply rinse between uses. Avoid using disposable k-cups or pods 30 The Secrets We Used to Become Debt-Free

31 Not only is using a reusable coffee pod or k-cup dispenser more frugal, it also greatly limits the amount of waste your family puts out. Clean using natural ingredients There are so many things that can be cleaned effectively using things like baking soda, vinegar, and rubbing alcohol. Before you head out to buy things like stove cleaner, try some natural options using things you already have on hand. Use your scraps Rather than throwing out things like potato or carrot peelings, onion peelings, fruit stems and other vegetable waste, put it all in a plastic bag in your freezer, adding to it as you get more. Then, use it to make your own vegetable stock. Doing this makes use of your waste and also helps you save money. Make your own whenever possible When you cook and bake from scratch, you leave less waste behind. Without all the packaging, there is very little waste when you only have the baking dish or the pots and pans left behind. You really do pay for all that packaging as well. This is one of the best money-saving tips I have! Buy in bulk Not only is buying in bulk often the most frugal option, it is also the option that leaves less waste behind. Again, packaging is something you pay for whether you think about it or not. Reuse Reuse whatever packaging you can. Boxes covered in scrapbook paper can make great drawer dividers, for instance. Cans can have the labels removed, be painted, and make the cutest vases or supply holders for things like pens, markers, paintbrushes, scissors, and more. Before you throw away or recycle something, check out Pinterest for ways to use 31 The Secrets We Used to Become Debt-Free

32 that item in a more creative way. Chances are you ll find something you love! Looking to have a money-saving kitchen? Little changes like these take little to no extra effort but can make a huge difference in your family budget. 32 The Secrets We Used to Become Debt-Free

33 Action Steps to Take From Chapter Five Purchase reusable cups or water bottles for every member of your family to use throughout the day Search the web for ideas on repurposing things you commonly throw away Ditch the paper towel and invest in some nice, thick rags 33 The Secrets We Used to Become Debt-Free

34 Chapter Six

35 Wealth Building 101 Building wealth is similar to saving money, however, the focus is on the future. Building wealth is a longterm process with a longterm goal in mind. The premise of this chapter is that there are things we can do in the here and now that make a big return on investment now, but more importantly in the future. According to the latest government reports, the average American household of four people spends over $60,000 a year. Can you imagine what my expenses would be as a family of ten if these stats were true for us?! I can assure you we would not have the income to support this, not even close. But, even using these figures, by cutting expenses by only 10 percent, you (or I) would be saving a whopping $6,000. $6,000!!! That is a lot, and that is only 10 percent! In the past couple of chapters, we ve focused on saving money and on doing things to cut expenses. This provides you with the perfect opportunity to start building wealth. The idea is to take some of the money you re saving and focus specifically on building wealth with it. Think, tucking it away for longterm gain. Why? Here s five reasons that cutting expenses is the way to bring wealth. It all adds up and quickly When you choose to cut spending, your money will add up much more quickly than it would with getting a small pay increase. Think of how excited you get about a $.50 pay raise. But, when you compare the amount of extra money you would have a year from 35 The Secrets We Used to Become Debt-Free

36 that to the amount of money you would have by saving $100 a year in expenses, the difference between the two is huge. Imagine if you were able to cut $300 a month from your expenses. When compared with a small pay increase, it is almost laughable to look at the difference. In this same way, you will make more in savings by cutting expenses than you will selling stuff in most cases. Cutting spending and then doing it on a regular basis packs a huge punch over time. You cut out the middle man With a pay increase, you are still being taxed on that increase. However, when you are saving through cutting expenses, you are keeping the entirety of what you are saving (and actually earning interest, therefore making money if you are investing it or paying off debt somewhere). Obviously your savings don t need the approval of anyone but you and your family as a pay increase would. Cutting expenses is all about you and maybe your family. No one else needs to sign off on it or agree to it. Saving money is like having a part-time job When clipping coupons, making a call to cancel cable, or reworking the family budget to save money, you are making much more per hour than you would most likely ever get in a pay increase or in the income earned through a second job. Even eliminating eating out a couple of times a month to make a meal instead gives you an overall net earning that will add up to more than an hourly wage increase does. It s contagious Making lifestyle changes that put more money in your pocket usually gives way to additional lifestyle choices that put more money in your pocket. Cutting expenses in one way often breeds the desire to get really serious about cutting more expenses. It becomes almost like a game to see how fast your savings 36 The Secrets We Used to Become Debt-Free

37 can add up. You re Making a Higher Per Hour Rate When you are clipping coupons, working on your budget, shopping sales, or downgrading a monthly service, you are making more per hour than you could most likely receive in getting a per hour raise. Even just cutting out a meal or two in a restaurant a month can give you a sizeable raise. There are so many ways to build wealth or to save money long-term. However, are you getting the best return on your investment (ROI) for the time you put in? You can spend a little time to score some amazing savings based on the tips I shared in this chapter. Over time, those savings roll, roll, and then roll some more. That s one of the secrets to wealth building. Focusing on cutting expenses is an amazing way to get that wealth ball rolling! 37 The Secrets We Used to Become Debt-Free

38 Action Steps to Take From Chapter Six Name three frivolous expenses that you can cut without hardly missing them at all Name two expenses that you are willing to try cutting out of your monthly budget Create a place where you can log all of the savings you will be earning by making the changes suggested in this book 38 The Secrets We Used to Become Debt-Free

39 Chapter Seven

40 Be a Savvy Shopper In this chapter, it s all about wise spending habits. Thinking about spending money wisely isn t always fun. In fact, even just the thought can be a real downer, but when it comes to being intentional in your finances and changing your future, you must play it smart. Playing things smart when it comes to spending can be done in so many ways, but I want to give you five quick and pretty painless ways that you can do it. If even these seem overwhelming to you, just pick one a week to apply, or, move even slower if that s what it takes to get you on the spending smart train. The point is to get on the spending smart train. It s up to you to decide how fast you want to get to your destination (your long-term financial goals). Ready for those five tips? Here they are! Discover a spending weakness and get rid of it Ok, so this one can be a bit painful as it requires a healthy dose of honesty, but that really is a good thing. Getting rid of a guilty pleasure will make a positive impact in your life in many ways, not just financial. Is your weakness shopping on Amazon? Then don t even visit the site. Is it watching deal websites for the latest deals? Then visit these sites less frequently or even stop visiting them altogether just do this during this season while you are focusing on taking control of your finances if that makes it easer. Knowing your weaknesses and doing something about it is a very smart way to shop. Eliminate one thing per week The thing you eliminate can as little or big as you want it to be. Be big, be bold, or take it slow, but, eliminate one thing that is not necessary every week. Just once a 40 The Secrets We Used to Become Debt-Free

41 week. For instance, if you get coffee on the way to work five times a week, just cut it out once a week. Don t get drastic. Then we resist it. Just eliminate something extra once a week. Over time, accelerate this habit to get you to your financial goals quicker. Downsize one thing per week This one is even easier than the previous tip. You only have to downsize, or do/buy less of something once a week. Give it some thought. Chances are, you can find something to downsize fairly easily. Although it may make only a small impact on your overall savings a month, you ve made a great impact in your overall spending habits. Shop around for insurance rates This may seen trivial, but I can say that there are years where I ve saved nearly $1,000 by simply switching from one insurance carrier to another for the exact same thing! The company that had the cheapest rates six months ago may not have the best rates today. You re taking control of your finances. In doing so, the goal is to take control of every area, and this is one that can make a huge difference. Even better, it is fairly painless to do - it will just cost you a bit of your time. Read reviews Before you buy nearly anything, head over to Amazon and read the reviews about that thing. Do this even if you re not buying it from Amazon. I cannot tell you how many times I bought something different or avoided buying something altogether because I read what others said about the item. Because, you know what? Those people are generally right. As you read, look for 41 The Secrets We Used to Become Debt-Free

42 common positives and common negatives. The more people you find saying the same thing, the more confident you can be that whatever they are saying is most likely the truth. It pays to take the time to read reviews. Developing wise spending habits starts with doing so in small, even primarily painless ways. It s a great way to ease into shopping smart, which makes it a great way to get more intentional in your finances because you are saving money in doing so. 42 The Secrets We Used to Become Debt-Free

43 Action Steps to Take From Chapter Seven Survey five friends about the insurance companies they are using Research these companies and track their rates Choose the best company, and write it in your calendar to shop these same five companies for rates every 6 or 12 months 43 The Secrets We Used to Become Debt-Free

44 Chapter Eight

45 The Power of One Financial matters can really get messy. Being financially savvy does take work, after all. It is important to do things like create a budget, shop smart, and handle the money you have wisely. But, I want to make things even easier for you. Short and sweet, plain and simple, doing this one thing could save you thousands every year. Are you ready for it? Here it is. Live on less than you make. Yep. See what I mean? It s a basic concept. You may already be thinking that it might be a basic concept but it is not one that is always easy to implement. If these are your thoughts, then you would be right on. It is basic and so difficult to put into action at times. But, when you do, here is how this one thing could save you tons of money each year. You will avoid debt If you re living on less than you make, you won t be buying anything that you can t outright pay for. Of course, most have housing costs, but take it from someone who no longer has a mortgage, not paying for housing costs anymore is pretty awesome! Without debt, you also won t be paying interest on your credit cards and loans. Some people I know have multiple credit cards that they keep using again and again. Others take out loans for various things such as a remodeling project, a new car, or a vacation, none of which they can afford without the loan. 45 The Secrets We Used to Become Debt-Free

46 While this may seem like a nice thing at the time that you are buying the new car or while you re on that vacation, you ll pay for it later - literately and figuratively. You won t have to stress when it comes time to pay bills Who likes paying bills? Really no one does. However, it is so much easier when you ve actually got what you need to cover them. Due dates come without stress, strain, and overwhelm when you ve got what you need. You will avoid buyer s remorse You know what this is, right? Buyer s remorse happens when you buy something that you can t really afford to buy, but you find justification for it in some way. You might find yourself saying, Oh I worked really hard at work this month, or, I deserve this. Later, once you re home and thinking about it, you feel bad for ever buying it at all. Try sleeping on it for a few days before you buy. This helps you truly determine the difference between a want and a need. If you re married, you will both automatically be on the same financial page Have you ever purchased something and then felt as though you needed to hide that purchase from your spouse? This is similar to buyer s remorse. If you know that you can t really afford something that you bought, you really don t want to hear the same thing from your spouse. So, you might hide it. Living on less than you make means you lessen the likelihood of having to hide purchases from your spouse. Hiding anything in a marriage is not a good thing. 46 The Secrets We Used to Become Debt-Free

47 You ll learn how to become a pro at creating a workable budget Most likely, your income will fluctuate at times for a variety of reasons. But, when you are committed to living on less than you make, you simply must adjust your budget as your income decreases at times. So often money fluctuates. If the one thing that remains constant is your commitment to living on less than you make, then you will be able to play with your budget as often as is necessary. The really cool thing is to not change your spending habits a ton once if your income increases. Then, you ll be able to save money all over the place. Living on less than we made is one of the tricks we implemented when working towards paying off our mortgage. You will have an easier time discerning the difference between a want and a need This is an important distinction to make, but it is one that many people don t know how to do. Living on less than you make means you may very well have to forego things that are just wants if your income doesn t allow for it. Buying wants isn t a bad thing, it s just important to know if that thing you re buying is a want or a need. When true financial hardship comes, you will be able to handle it No one really likes to think this will happen to them. But, the truth is, it just might. This way if the unthinkable does happen, you ve got a cushion to fall on financially. If you are already accustomed to spending habits that fluctuate at times as your income fluctuates, it will be something you ve got experience in doing if that income falls right off. 47 The Secrets We Used to Become Debt-Free

48 If you re a parent, you will be teaching your kids invaluable skills I m a parent (8 times over!), and my kids have become so financially wise just from being exposed to the way we do and don t spend money. Our kids see us carefully weigh everything we buy whether it is things we need or things that we really don t need. The truth is, our kids watch what we do, both good and bad, and they learn from that. If we practice good financial skills, they will see that and learn it for themselves. Then they will take these skills into adulthood with them. Hopefully, they choose to use them! Living on less than you make can seem inconvenient at times. However, if you keep focused on these benefits, it will make it easier to spend less and save more. It s never too late to start living this way, and every little bit counts toward making a huge difference in your overall annual financial picture. 48 The Secrets We Used to Become Debt-Free

49 Action Steps From Chapter Eight Decide on a day every week that you can spend 10 minutes revisiting your budget Decide on a day every week that you can spend paying bills and handling financial matters Commit to learning everything you need to learn in order to create a budget 49 The Secrets We Used to Become Debt-Free

50 Chapter Nine

51 What Comes After the Power of One If you have fully implemented the power of one, it s time for the next step. It s time to capitalize on all those savings you ll be accumulating. Start or add some padding to your emergency fund This really should come first if you don t have a fully funded emergency fund. The truth is, you never really know when you will need your emergency fund. We would all like to avoid emergencies, especially financial ones, but not planning for them certainly is not a way to avoid them. Trust me, they will happen. Six months worth of the money it would take to cover your bills is an excellent place to start. Put a good portion of it your savings into a long term interest bearing savings account This is the whole out of sight, out of mind principle. Dumping it into a savings account that is earning interest is an awesome way to make all these savings multiply. Pay down on high-interest credit cards Are you carrying a balance on your credit card? At times they are a necessary evil, but now is an excellent time to really start eliminating the credit card debt in your life. You can get really crazy and pay off as much credit card debt as you can with much of your savings. But, paying interest on your credit cards is throwing money away, so pay it off ASAP! Make one (or more) additional mortgage payment, just to principle As with any form of interest, this makes a huge difference in the long haul. Tricks like 51 The Secrets We Used to Become Debt-Free

52 this is how my husband and I managed to pay off our mortgage in our early forties. Start a short-term savings account for an expense you know is coming Burying your head in the sand about an expense you know you have coming is nice, but it isn t practical. Think about the things you own will they need to be repaired or replaced in the next year? Start saving for them now so you re not left having to drain your emergency fund or throw it on a credit card. Invest in your retirement I m really not sure you can ever really save too much for retirement. It is amazing how much it costs to retire. So, plan for the future wisely. Start a Roth IRA A Roth IRA is a really easy yet rewarding way to invest. They can be used for all sorts of things. And, since the money isn t easy to withdraw, you won t be able to dip into it when you stumble upon something that you d like to spend your money on like you would if it was just in a regular savings account. Start a vacation fund Have you used a credit card to pay for some or all of your vacation before? How awesome would it be to pay cash for a vacation? Plan for it now! Tuck money away for Christmas Christmas comes once a year. It doesn t catch anyone by surprise, or at least it shouldn t. But, it is often a reason many people take on some added debt. It might be early in the year, but it s never too early to start being smart with your money - and that includes saving for Christmas. Invest in your future No matter what it is, there is almost always more to learn. There are a thousand different ways to invest in your future as well. 52 The Secrets We Used to Become Debt-Free

53 Investing is an active verb. It is something you must do. You must put forth an effort in order to invest in your future in any way. One great way to invest in your future is to educate yourself. I am a firm believer in learning from those who know more than I do. One thing I am an expert in is frugal living and saving money. I didn t really seek out becoming an expert in these things, but my life demanded that I become an expert in all things money. My husband and I have a super-sized family to support since we have 8 kids at the time of this writing, and our income certainly hasn t grown proportionately to how our family has grown. In fact, there were times throughout my 21 years of married life that we were forced to live on little more than peanuts. But you know what? I learned. I lived it. And I became an expert in living a frugal lifestyle. And, I am sharing all my tips, tricks, and secrets with you in my membership site, Thriving on a Dime. You can find details about my course in the Resources section at the end of this book. 53 The Secrets We Used to Become Debt-Free

54 Action Steps to Take From Chapter Nine List all the credit cards you have with a balance at the current time and list their balance and interest rate Get rid of the ones that aren t listed there Determine in which order these credit cards should be paid off based on balance owed and interest rate 54 The Secrets We Used to Become Debt-Free