I’m no expert. I’m not a financial analyst, planner, or coach. Actually, I recently discovered that I’ve been relatively bad with money for most of my life. I never really thought about saving for the future beyond having enough to make my next big purchase, and I applauded myself for finding incredible deals on things I didn’t even need (and often never used).
Thankfully, and in spite of my bad habits, I had an epiphany about a year and a half after my fourth child was born …
At our rate of spending, we were on our way from over $100,000 in savings to potentially going into debt within 2 years if we didn’t make some big changes!
I had always been a working mom. I never even took more than a few weeks off after giving birth to each of my first three children. I remember writing curriculum and answering emails while lying alongside my very sick newborn baby on a 5-day hospital stay. I remember putting little ones to bed and then staying up until 2 am typing out invoices. I hustled. I worked multiple jobs. And I refinanced a high-priced house as a single mom of two young children. I felt like I had all of my financial ducks in a row, and even though I wasn’t saving a whole lot, I had a small retirement account and an emergency fund in the bank.
Then, I met my future husband, and life was grand. We dated; we traveled; we splurged. Soon enough, we got married, and we combined two substantial incomes, while also combining two different spending habits. We never even thought to budget. We considered ourselves savvy shoppers and definitely not big-ticket spenders, so when we had a baby together, I reduced how much I worked. Then, when we had another baby together, I stopped working altogether. We went from two substantial incomes to one, but we never had a discussion or established a plan for what changes we needed to make in our spending to successfully embark on this drastic lifestyle change. We just kept doing what we had always done. We bought the groceries we wanted without tracking how much we spent per month. We went out to eat or grabbed fast food on a whim. We bought mountains of kids’ clothes even though several people offered us hand-me-downs, and we said yes to every party and social engagement that came along. We had fooled ourselves into believing that because we didn’t drive expensive cars or splurge on fancy clothing or stay at 5 star hotels on vacation that we didn’t need to pay attention to our spending habits. So, we were in for a big surprise when we finally did.
It turned out that we were spending a few thousand per month more than what my husband was bringing in, even though he had a significant income. We knew we had been dipping into our cash cushion here and there but didn’t realize for quite a while just how much. I am incredibly thankful that we had built up a large amount of reserves prior to the decision for me to become a stay-at-home mom, but it was time to make huge changes and create a plan to continue to build those reserves rather than deplete them.
I had to launch into hyper-learning and take action immediately! I listened to dozens of podcast episodes, read several books, researched online, and tracked every single penny for months. Within 4 months of this journey, we reduced our monthly spending on average by $3,000 (here’s how we started!), but to our surprise, our lives really didn’t change at all. I became focused and motivated, and I began to take our journey beyond just saving ourselves from future debt. I decided that this journey could take us on the path to future financial independence instead!
It’s been 20 months since I had my money epiphany, and since then, we’ve accumulated cash reserves more than 3 times what we had when I stopped working. We’ve increased our investment assets significantly. And we continue to reduce our monthly spending in creative ways despite supporting a family of 6. And we started all of this as I was nearing my 40th birthday! We definitely didn’t start early. However, we now feel confident setting goals beyond what we had ever imagined…
- Retire by age 50
- Find unique ways to fund continuing or college education for all four of our children
- Invest in real estate, including vacation homes
- Travel to all 50 states before our eldest child graduates (in 5 years)
- Live abroad
- Give generously
- Write this blog
I’ve been told more than once that I should write what I need to read. I’m hoping this blog will keep me motivated on this journey to financial independence, but more importantly, I really hope it can be encouraging to others. Please subscribe to follow along on the path that got us here and what lies ahead. I also plan to share great money-saving tips, budgeting ideas, encouragement, and financial literacy lessons for your children. Thank you for reading!
Frugal with Four 