Growing up, I was never taught how to save money. So saving money wasn't one of my strengths. But after seeing my friends pay off their debt, create emergency savings, and travel the world, I knew it was time to get serious about saving money. Here are a few tips on how we accomplished a goal of saving $50,000 in 12 months.
I started by setting a few financial goals, including:
- Pay Off Credit Cards
- Create a Travel Account & Actually Travel
- Use Points to Travel Every 90 Days
- Create an Emergency Account
- Save $50,000 Total
We Paid Off Our Credit Cards
While we could have paid off all of our credit cards with one swoop, I didn't want to touch any cash in the bank. I always want to keep a nest egg for emergencies, living expenses, groceries, and anything that pops up.
Rule #1: Think outside the box when it comes to paying off your debt right now.
Last year, we got hit pretty hard with repairs. One month, the entire AC unit went out during the 110-degree summer. We financed a brand new heating & AC unit. That set us back around $7500.
Then, a few of our big appliances started dying so we replaced the dryer & the dishwasher. Luckily, we hit the Black Friday sales & saved a ton. But that added another $1500 in debt.
Then we had little purchases like a new couch and other odds and ends. The number of payments started increasing. We decided to consolidate all of these separate bills into one payment with a lower monthly payment. That freed up some extra money we then used to pay that down that one loan every month.
We used Payoff & we highly recommend using them if you need to consolidate the credit cards.
The first step to financial wellness is taking control of your credit card debt. The Payoff Loan gives you the power to reduce multiple high-interest payments into one low-rate monthly payment.
We Cut Expenses
Having one low credit card payment increased the amount we had left at the end of the month. Next, we went through our monthly expenses to see what we could cut or negotiate down.
I found subscriptions that we never used (or never got canceled for whatever reason). Because it takes forever to cancel or negotiate lower subscriptions, we used two services that saved us over $200 per month.
The first service is called True Bill. True Bill helps you find & cancel unwanted subscriptions, and since 80% of the people using Trubill saved money I thought it was a no-brainer. Plus, they have 200 five-star reviews with Trust Pilot. Create Your Free Account
The second service is called Bill Shark. Bill Shark negotiates lower subscriptions for your internet & wireless bills. Did you know that 80% of people overpay for internet & cell phone service? Here's how Bill Shark makes money. They will negotiate or cancel a subscription on your behalf. They charge $9 per canceled subscription and since they usually get a pro-rated refund, that's usually enough to pay the $9. So their low fee is paid from the money they save you. Genius idea. Check out how much you're saving with their calculator here.
Next, We Created a Travel Account
Traveling is important to us and we want to see the sights 3-4 times per year without worrying about the cost of our trips. So we created an account just for travel expenses.
Here's the plan:
When the account reaches $6,000, we can go on a trip. And our first trip cost $11.20 (you can see how to get $11 trips here). We were surprised to see how fast we were able to meet that $6,000 benchmark and how many trips were possible.
For me, traveling and lifestyle are important so we put more weight on this as a budget item. We think saving for traveling is one of the best ideas we've ever had because of the greater impact on the overall quality of our lives.
One benefit to this travel account is that we earn interest as well with Axos Bank. Axos Bank pays three times the average savings account. Then, they have no fees & you can access your funds anytime. It's the perfect travel savings account. Click here to open account (no minimum balance required).
We Stopped Eating Out
When we looked out our expenses, one of the highest expenses were RESTAURANTS. We were spending a ridiculous amount eating out.
Because I work from home, we bought into this notion that we need to get out of the house as much as we can because it started to feel like work 24/7. We love going out and started to eat out for almost every meal.
The problem: that habit turned into a $4000+ a month expense. That's when I found a guy named Marley Ficalora who teaches you how to cook amazing meals for less than $100 per week. We paid $5 for his membership and he gave us all the weekly recipes and ingredient lists.
I was incredibly skeptical about this, but the meals turned out to be 1000x more delicious than anything at a restaurant. Plus, we started to learn how to cook and make amazing meals. It turned into an amazing food glow-up experience. Click here to see what I'm talking about…
We Only Purchase Necessities
This was an easy transition. We decided to only purchase the necessities for the first 3 months. We completely cut out any frivolous spending, focusing on our financial setup:
Do we have our travel account setup?
Do we have an easy way to send money to the travel account?
I'll admit – it's easier to give up instant gratification purchases when you know the money is going toward a fun experience like a vacation.
Now I noticed the money in the checking accounts started increasing. After the 3rd month, we had a nice $4,000 leftover at the end of the month. So we started an emergency account. Within four months, we had $16,000 in our emergency account.
We Started a Side Hustle
No, this is not an ending where we started making $50,000 per day with our secret Shopify store. We started flipping items & writing on Fiverr to make extra income. These side hustles gave us spending money and allowed us to create new financial goals.
We were able to take advantage of opening up new credit cards and trying to hit travel bonuses of 40,000 points. When you start a side hustle, you can put all your expenses on one card. And when you just need to spend $1,000 on business expenses, it's much easier to hit your 40,000 bonus point goal.
And now that travel runs about $40 per plane ticket, we can use our points to travel every month for the next 8 months. Here's how to get the cheapest flights.
So now, we're taking $11.20 flights using our bonus points that we got when we spent $1,000 on our new credit card that we got for our new side hustle. Then, we use the money we make from our side hustle to purchase concert tickets, events, shopping, and travel fun money.
Our next goal: We want to move to a new city and save for a new house in 12 months. We have $50,000 starting out. I want to double that in the next 12 months.
Let the fun begin…
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