My husband and I have been bouncing across countries and continents for years. Our job has taken us places and as much as it was fun and exciting to meet new people and learn new culture, at some point we knew it was time to settle in one place. We picked America.
We moved back to the States post-recession, when the economy’s recovering yet still gloomy and the unemployment rate’s at its peak. The pasture on this side of the world wasn’t very green but dry. A hint of luck that we live in the nation’s capital, one of the very few places in America left partially untouched by the recession because of federal and/or federal-related jobs available. But still, the immigration process has been financially-crippling that we had to tighten our belts in order to afford the high cost of living in the area.
My husband has been away in the U.S. for almost 3 years that his credit rating was not the greatest and since I am a humble immigrant, I had to start from scratch. In the beginning, it was almost impossible to apply for any kind of loan or credit cards. We struggled but managed to dig our way out of the hole in less than a year. In eight months, we were able to raise a downpayment for a house while keeping all our bill payments up to date. We are not rich (oh heavens, no). We sweat for every dime we make yet we manage to enjoy life’s simple pleasures.
Disciplined spending is the key.
Let me share to you my top 5 savings tips:
1.Create a spreadsheet. You don’t have to be an accountant to create a spreadsheet. With a pen and paper, write down how much money comes in every month and how much money goes out for expenses. There are a lot of bills that have fixed cost making them easier to budget. By doing this, cutting down your purchases on less-important items would become more manageable. It would be a lot easier to visualize whether you’re making (barely) enough money to get by every month or if there’s a lot of extra cash that could go to savings instead on wasted purchase.
2. Prioritize payments. In our case, the largest chunk of earning goes to paying necessities: mortgage, car, electricity, water. Food and gas we all charge in the credit card (discussed below). We’re paid twice a month that we split our bill payments in order to budget cash flow. The largest payables we always schedule at the start of each month just to get them out of the way, while the smaller bills we pay at the end of every month.
3. Pay your credit cards in full, monthly. As I mentioned earlier, we only charge food and gas in our credit cards. We decided to only maintain 3 credit cards so they’re easier to handle. You will be surprised how quickly banks would offer higher credit limits if you’re not delinquent with payments. I frown at the idea of hoarding dozens of credit cards because it’s added cost. We use our first 2 credit cards strictly for household purchases: food, gas, furniture etc. The third one we use ONLY for travel-related purchases (plane tickets, hotel reservations etc). We are strict in using our credit cards. We never max it out and pay it in full every month. Think of it as a piggy bank - once you fill it then you can empty it - never the other way. I think a lot of people have been carelessly using their credit cards by constantly swiping it but only paying the minimum monthly rates. This shouldn’t be the case as the interest rates will continuously jack-up and eventually swallow you alive!
4. Practice self-control. The hardest yet most important rule: restraint yourself from impulsive purchases. When going to the grocery, make a list of things you need in order to avoid last minute purchases. Eat at home as often as you can, avoid fast foods, they’re not only expensive but similarly unhealthy. Don’t be shy to grab those freebies or discounted items. Always, ALWAYS scout for great deals. Note that temptation is everywhere! There’s always that bag, shoes, cosmetics, jewelry that you are dying to have. But remember, the whole point of saving is not to deprive yourself of things that you want but EVENTUALLY raising the money that you need in order to afford them later, not never.
5. Stop counting your money! It’s like watching grass grow, it takes a while - a long while. Do not obsess with money to a point that you stop living. Live within your means but enjoy what you have. It is in wanting the things we cannot afford that makes us unhappy. Be grateful for the little things and treasure the big ones. Saving can be fun only if we recognize that money is never meant to be the center of our lives.
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