Thursday, July 23, 2015

“Home, Debt-Free, Home” Chapter 3: 4 Keys to Find Cash and...

"Home, Debt-Free, Home"

Chapter 3

4 Keys to Find Cash and 
Make Your Money Work for You

During the first challenge I mentioned that I took on a personal challenge where I could only spend $250 for one month. I invited you to do the same. The details were:
1) Exceptions: the mortgage payment, bills that need to be paid. But I wrote down those bills in detail. This will help you face the reality of your debt.
2) Each week: Everything else came from that $250. I wrote down how much I spent and what I spent it on. At the same time I was determined to pay attention to what I was really doing.

It really was a tough challenge & I learned a lot about my spending habits, which honestly were pretty good. After the challenge I was able to see I normal bought too many things I didn't really need & I ate out too often.
The bonus of taking the challenge was I actually found I could live on about 20% less if I simply curtailed these habits. 
KEY 1: I started paying cash for everything, when I ran out of money, I had to stop spending. That extra 20% went to paying extra money on a credit card. I basically found extra money.
We had already been focusing on paying off our credit cards, this finally put us over the top. The only exception to this is I have one cash back credit card that I use on Amazon. It's the Amazon card & even before I hit the order button, I pop over to my bank account and make the exact payment online before I purchase the items in my cart. This keep in line with if I don't have the money in my account, I don't buy at that time.
Once we pay our basic bills, we pull all the cash out of our accounts and save that money at home. 

EXAMPLE: I am purchasing two medium sized storage units for my new bathroom from Amazon. 1) I took money from home, 2) went to the bank to deposit the cash, 3) so I could make this purchase and 4) paid the purchase off immediately from my account.
Why does this help? I really had to determine that this was what I needed and these extra steps made me far more thoughtful about my purchase than if I was simply plunking the purchase a credit card. 
KEY 2: Make your money work for you. If I am making a purchase from Walmart, I go through a site called Shop at I can get 3-5% back on purchases. This takes awhile to accumulate. But for me, every little bit helps. This week I am receiving a check back for $20, which I will cash and put it in my cash at home savings.
About having my information out there; unfortunately that boat sailed a long time ago. I will be reevaluating this after I move. On will only make a purchase after I reach the $35 free shipping level. Some other little tips:
  • Learn how to do it yourself
  • Buy used, save the difference
  • Have a yard sale
  • Sell stuff through local on-line resources
  • Learn to repair something instead or running out and buying something new.
  • Start a garden, even if it is in containers on your porch
  • Use Coupons, but actually put that money aside that you save.

Key 3: Find anyway to get rid of stuff you don't need and take the cash and apply it to paying down your debt. I am currently selling all sorts of stuff I really don't need like those Beanie Babies I talked about in the last post for cash to add to my “savings”.

KEY 4: Plan every single purchase you make. I basically put off going INTO a store, until I have to & I plan every single purchase I make.
See so far there is no magic trick to getting out of debt.
While you are here, if you put that $20 bill in the envelope on your fridge like I asked, add another one.
Under the category of learn how to do it yourself, here are some items that I use and find helpful. Maybe you will too.

Feel free to join our community at Perky Gramma Teaches on Facebook. We have a nice little group of people and we share various vintage skills & tips. It's all about the journey of farming/homesteading.

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