Financial Stewardship

Spring clean your spending habits

By Brooke Stacia Demott

One frigid January evening, Brian fumbled out an engagement ring after dinner and eagerly asked me to marry him.

Thrilled, I accepted.

Young, idealistic, and naive, our plan was to get married, live off maxed-out student loans, and after graduation, simultaneously land high-paying jobs. If you want, you can check out this index for the best and the most valuable advice on loan sanctions.


By easy, of course, I mean completely unrealistic.

Our respective financial situations didn’t exactly reflect good management, either.

At the time, I had $3,000 in unpaid traffic tickets preventing me from even getting a drivers’ license (long story), a totaled sedan, and thousands in student loan debt. My husband’s student loan debt surpassed my own, not to mention his credit cards, medical bills, and a brand new $1,700 tab for my engagement ring.

I was 23, he was 25, and we were both idiots.

After we married in July of 2007, we realized that our plan might not actually be solid. Slowly, we began to reconfigure.

It was important to us that I stay home to raise and educate our children, which left the breadwinning to Brian. His new job afforded him a whopping $400 per week after taxes — so much for that jackpot career.

How does a single-income family, with painfully meager means, even survive, much less pay off debt and save?

It wasn’t easy. We had to completely deprogram ourselves from typical American spending habits, trading frivolity for prudence and discipline.

Here are some principles that really helped us take control of our finances:

— First, identify your goals.

Dieting for the sake of dieting is agony; but when you set a target weight, dieting becomes a challenge with a clear purpose. The same principle applies to bridling finances.

What motivates you? Time to buy a house? Travel?  Retire? Choose a long-term goal, peppering the path with short-term goals to meet your objectives along the way.

When you hit a short-term goal, celebrate (frugally!) Little rewards for victories along the way will energize and encourage you to keep going.

— Recognize the difference between a need, and a “felt need.”

There’s a considerable gap between what we think we need, and what we actually need. A “need” is what is required to survive and provide, such as food, shelter, clothing, water, and transportation.

A “felt need” is a convenience that we prefer, but could live without. Identifying the difference could save you hundreds of dollars.

Movies, take-out, video games — even cell phones, internet, and cable — aren’t “needs,” and cutting these things way down or out will give you a huge amount of financial flexibility.

We didn’t have Internet for years, and to this day I still don’t have a cell phone or cable.

— Stop “frittering.”

This term refers to “thoughtless little purchases.” A pack of gum at the gas station, a coffee on the way home — they add up, often big time.

Recently, I spoke to a friend who said after tallying up their “frittering,” she was shocked to see that they’d spent nearly $1,200 in one month on non-budget food items.

You’d be amazed at how much money falls by the wayside when your spending is random.

Being accountable

— Monitor your spending.

Sit down and take inventory of where your money has gone over the last three months. Categorize your spending — you need to have a comprehensive understanding of your finances.

Then, set a budget. I’d suggest your first budget ought to be very strict. Bear in mind, as you grow in stewardship and reduce your debt, you’ll be able to relax. But to develop good habits, an airtight budget is a great start. Make it a rule to never spend more than a small, previously determined amount, without consulting your spouse.

— Get a deal!

Every business owner knows that the best way to increase profits is to cut costs. Ask for a reduced rate on utilities and phone plans. Buy clothes second-hand. Make a menu every week and buy only what you need at the grocery store to fulfill it. There are hundreds of ways to be shrewd in your spending.

Remember, just because you can afford something doesn’t mean you should buy it. When searching for our first home, the bank preapproved us for a $100,000 mortgage. However, we knew that we’d never be able to pay off debt and save with a house at that price.

We set our personal max at $80,000 and found a cute little house for $68,000 with no regrets. Make sure you know exactly what you’re willing to spend.

— Use “bonus” income toward paying down debt.

It’s tough to watch a work bonus or a tax refund come and go in the course of a few hours, but that’s what it takes when you want to get out of debt. You don’t have to be a legalist about it; anything is better than nothing.

At least use a portion of bonus income toward debt if you can’t go all in. Make sure to pay off the debt with the highest interest rate first.

For about six years, we put 80 percent of all “extra” money toward debt. It was hard, but it was worth it in the end.

— Finally, SAVE.

Any amount you can save each month adds up. More importantly, developing the discipline to save what you don’t need to spend is invaluable. There’s a dance between paying off debt and saving, but both are important.

You’ll find a rhythm; the point is to make a habit of saving. I’d suggest a short-term savings (think, Christmas) and a long-term savings (unforeseen emergency).

Again, it doesn’t have to be a huge amount. Even $25 in each savings account is a great start, and you can work your way up from there.

Today, we have seven kids, one income, and virtually no debt. We are able to save 25 percent annually after taxes comfortably, and no longer live with anxiety over monthly bills. It’s hard work, but I promise you, it’s worth the effort!

Creating a budget

An easy budget template looks something like this:

— Calculate your yearly income. Multiply your weekly income by 52; for example, $400 per week = $20,800 yearly)

— Divide that by 12 months. This is your monthly financial max. ($20,800/12 = $1,733)

TIP: Round income down, and expenses up, leaving a “secret” cushion. For example, $1,733 = $1,700.

— Add together your fixed monthly expenses. For example, mortgage + student loans + credit card + utilities = $1,200)

— Divide remaining amount among flexible monthly necessities and set aside a small amount to save.

For instance, groceries = $400; gas = $50; toiletries = $25. That leaves $25 for saving plus that additional $33 cushion.

This might look impossible, but this was our actual budget for the first year of our marriage and we made it work.