Just five years ago, my husband and I had $45,000 in debt. Today, we’re saving half our income.
No, we didn’t win the lottery. We do it the old-fashioned way with lots of sacrifices and hard work.
We Paid Off Our Debt
When my husband and I first got married, we found ourselves with student loans, car loans, and credit card debt that totaled $45,000.
We made lots of sacrifices to pay off our debt within 45 months, including downsizing to a studio guesthouse for over a year, and postponing our honeymoon to Costa Rica for two and a half years after our wedding.
We managed to pay off $45,000 in debt even though we had to overcome a lot of obstacles, such as my husband making a little bit more than minimum wage for the first three years of our marriage, him not working for four months to attend school, and him again not working for another six weeks due to a non-work related injury.
It wasn’t easy to live a frugal lifestyle in your late 20s when you see your friends buying their first house and going on lavish vacations, but we were determined to pay off our debt.
We Always Live on Less
One thing that we have managed to do throughout our entire marriage is live on less money than we earn.
A lot of people live paycheck to paycheck and wait until the end of the month to see if they have anything left to save. My husband and I operate the opposite of that.
We always figure out in advance how much money we are going to put into savings and force ourselves to live on less.
At the beginning, we started small, saving just $50 every two weeks. When we found out my husband wouldn’t be working for four months to attend school, we downsized to a studio and managed to put the money that we didn’t spend on rent and utilities straight toward a savings account, saving approximately $1,000 a month. The key here is to have that money automatically deducted every month. We’ve found that by not ever seeing the cash it makes it much easier to live as though it never existed (and save to the max!).
Once my husband started working again, we found a two-bedroom townhome to rent, but still chose a place that was within our budget and would allow us to save every month.
We Made More Money
Obviously, we also started earning more money. In fact, my husband and I are making about 40% more now than when we got married four years ago. Part of that is from raises and my husband being out of school (and having a full time job). Part of that is also money from my side hustle work — every evening I put in extra hours towards my freelance jobs. It isn’t easy…but it’s been a huge help towards increasing our take-home pay.
A lot of people might take the extra money and spend it on tangible things. But instead of using that cash to upgrade our cars or take expensive European vacations,we continued filtering it into a savings account, and kept living as we had before — frugally. Once we paid off our debt, we realized we were able to start taking the money we had been filtering towards our bills and put a full half of our income into savings and retirement. It was a huge accomplishment and something we had been working towards.
Why We’re Saving Half Our Income
When people hear we’re saving half our income, we get a crazy look and “Whyyyy?”
We’re young, we should be living in the moment, YOLO!
While we have definitely improved our lifestyle since earning more, we also like to be financially secure.
Right now, we’re saving money for a down payment on a house, and we hope to be able to buy our next car in cash. We’re also putting 10% of our income toward retirement savings every year.
If we weren’t saving money, we could live very extravagantly. But we’re living a comfortable middle-class lifestyle and we still manage to save a good chunk of our income.
For us, financial security is priceless.