After almost a year of lurking in the personal finance blogosphere, I’ve picked up some great advice and finally feel like my husband and I are on the right financial track.
It’s taken me this long to start my own blog because I didn’t really feel like I had much information to add – I still have so much to learn! But I think it’ll be good for me to get my goals in writing to keep me honest and on the right track.
I originally got into frugal living when I moved to a new city with my fiancé (now husband) right after we graduated from college a year ago. He’s in grad school earning a small living stipend as a teaching assistant, and I struggled to find an entry-level job in the stalling economy.
When I finally settled on a temporary part-time job, I realized that we weren’t making nearly enough to maintain our lifestyle. The savings we’d built was quickly depleting. I didn’t want to feel deprived because, honestly, things were pretty bleak at the time. While I didn’t want to increase our debt by living above our means, I did want to live well and live healthy. So I started looking for ways to cut our spending without sacrificing our comfort too much.
What have we accomplished in the past year?
For starters, we kept our heads above water and avoided the dreaded paycheck-to-paycheck lifestyle despite our low income.
I’m also proud to say that instead of increasing our debt, we’ve paid off about $4000 in credit card debt left over from college. (We’re scheduled to make our final credit card payment in November.)
We paid cash for a beautiful wedding with a $5000 budget thanks to our own savings and help from our parents. We also went on a lovely frugal honeymoon in Washington D.C. where we enjoyed free admission at the nation’s museums and landmarks. We spent a little over $1000 on the hotel and food (also paid in cash from savings).
We’ve saved about $2000 in a high-interest ING account, and I’d like to see that grow now that I’ve finally found a full-time job.
What are our goals?
Now that I am working full-time, I’m faced with some tough decisions about how to use the small amount of extra income that we have. The last thing we want is to fall into the spend-all-you-have trap.
Some of our goals include:
- Paying off a significant chunk of student loan debt.
- Building and maintaining an emergency fund.
- Starting a retirement account in the next year or two.
I’d like to make headway on our emergency fund, savings, and student loan debt before I start a retirement account. We’re only 23 and 24, so I think we’ve got a little time, but I want to begin contributing to a retirement account by the time we’re 25. My employer doesn’t offer a 401K, so it will be an individual account. I’m fine with that because I’d like to keep the bulk of our retirement savings in a Roth IRA anyway.
Most importantly, since we’ve only been married two months, I want to start developing good money habits now when we don’t have much. My main goal is to live comfortably and well without spending every penny that we earn.
I’ve lived above my means through credit card spending, and that certainly wasn’t what I’d call living well. I was constantly stressed about money and never had extra money without putting myself into more debt. If we can get ahead of the game then we’ll have extra money, less stress, and a richer life (though not necessarily more “stuff”).
I like to think that if we can do that at our current income, then we’ll be able to maintain those good habits as we start to make more money. In the future, I want to devote the majority of our income to savings and cash purchases and avoid excessive debt.