The year was 2007, my husband and I were DINKs (dual income no kids) and spent money on home improvements, eating out and travel without much thought about saving for kids or retirement. I had a nice salary and retirement plan with my job but all the frustration and sleepless nights didn’t make the commute to NoVA worth it. Tired of hearing my complaints day after day, my husband said, “Just quit.” I said, “I can’t just quit” and he said, “Sure you can, our expenses aren’t huge right now, and we’ll figure it out.”.
Rewind to how we changed our relationship with money and when we decided to take control of our finances. In 2006, we read Your Money or Your Life by Joe Dominguez and Vicki Robin. This book helped me to accept that my job wasn’t worth it and made us realize that we could figure out a way for me to quit. The examples and exercises throughout the book helped us become money conscious by examining our behavior with money. It taught us how to be frugal and financially independent by following their nine-step program.
We did an audit of all our personal possessions. We went room by room throughout the livable space of our house and recorded them along with their estimated worth in a notebook. It filled 25 pages (with no children we had extra time on our hands obviously). We accounted for the items in the attic and around our property that included two sheds and a greenhouse, and two vehicles (and all the junk hidden in the trunk). Adding up all our stuff, minus what we owed in student and car loans, mortgage, etc. gave us our total net worth. Luckily it was in positive territory.
This exercise made us realize we had a lot of stuff that was just taking up space that we weren’t actually using. It wasn’t bringing us joy, but in my head, I told myself that I had worked hard to buy it so I was compelled to keep it. That brings me back to all the hours I spent at a job I didn’t like. Was it to buy something to make me feel fulfilled and did it really do so?
The biggest takeaway I got from this book was to always account for my time. I didn’t value my time while creating money as much as I valued the time I was saving by spending that money. A lot of things can be purchased, but time is not something that can be recovered after the fact.
Another book that helped change our relationship with money was The Total Money Makeover by Dave Ramsey. This was key for my husband since our income was going to be potentially reduced by over 50% and we still had bills to pay. Using Dave’s seven baby steps allowed us to set up an emergency fund, pay off all our debt including our student loans and cars, invest for retirement, save for our children’s college funds and give charitably. If you want to pay off debt, build your savings and stop living paycheck to paycheck then this book may be for you.
Bottom line: Dave taught us to live within our means and not beyond it. We set goals, put in the work and can now reap the benefits of financial freedom.
Learning to live within our means has given us financial stability that has changed our family tree and how we spend, save and give money.