We have been asked numerous times in the past how exactly we manage to do so many adventurous things and yet not be in debt at all. I've always procrastinated answering because I honestly don't feel like we're "excellent" money managers. First of all, we have known all along that God has unlimited resources--he owns the cattle on a thousand hills. Throughout the Bible, God has shown his desire to bless his children beyond measure. Since before we got married we have been in the habit of praying that God would provide for our financial well-being. God has answered these prayers in our lives as he has been incredibly generous to us in all things, including finances. God, in and through our families, has given us great opportunities over and above what most people will ever know. We are standing on the shoulders of those who have gone before us. Our families have taught us invaluable lessons about money and its management. Our families and their friends have blessed and continue to bless us incredibly with the way they make their resources available to us.
It is also important to make known the fact that when we got married we had no debt. Both of our cars were paid for. Shannon had a student loan that he paid off before we got married, but neither of us have ever carried credit card debt. Shannon paid cash for my engagement and wedding rings. We started our married life with a clean slate, which has helped matters.
Having said these things, here are the things that we try to do in order to be good stewards of what God has given us:
1) We tithe. We give at least 10% of our gross income to our church (divided between our church in the States and our church here) and sometimes more than that. Now, tithing is not a guarantee that God will bless and multiply your resources. It demonstrates faith that God will provide. We give our tithe first each month and live on what is left. We have always had enough.
2) We track our expenses. The first couple of months after we got married we tracked every penny we spent in order to gain an accurate understanding of how much life cost. We set a budget from there. We're currently doing the same thing here in Istanbul. Every kuruş (1/1ooth of a lira) that we spend is written down. At the end of August or September we should have a good idea of how much we spend on regular life and therefore how much we can set aside for our emergency fund, Lane's college fund, and a vacation fund (we're still contributing to our life insurance fund, and we are taking advantage of the matched contributions to retirement that our employer offers).
3) We save. A couple of months after we got married we were discussing money matters with the man who has been Shannon's financial adviser for years. He suggested we start putting X amount of dollars into an emergency fund and a life insurance plan that we can cash in at any time (both of these are at a separate bank than our regular accounts: it's more work to make a phone call in order to transfer money so we're less likely to touch that money than we are what's in our regular savings account). We agreed, thinking that X amount included both. Imagine our surprise when X amount plus our life insurance contributions came out of our checking account the next month. We were shocked and didn't think we could save that much every month, but we figured that we could at least try. It worked. For 2 1/2 years we contributed to these 2 funds, and now we have an emergency fund. We stopped contributing to the emergency fund about 4-5 months ago in light of our job change, trans-Atlantic move, and being unsure about the cost of living in Istanbul. We plan to start contributing to it again in a couple of months, after we're more aware of how much it costs to live here and what we can afford to save. However, this month, we did put some money into a savings account attached to our checking account. We can easily put this money back into our checking account if we need it, but if we make it to payday without touching it then we'll know that we can probably save that amount each month.
4) We operate in cash and set a budget. We have a few things auto-deducted from our account each month (life insurance and the like). In the States we'd pay a few of our bills with checks. But we used cash for other expenses. (Here we use cash for everything because there is no such thing as a checkbook). I get a set amount of cash for groceries each week and budget accordingly: it makes me more conscious not to toss extra stuff in the basket when I'm shopping.
5) We also have each gotten a "personal allowance" each week ever since we got married. This money is ours and ours alone and we don't have to be accountable to each other for it. This has ranged from $20 a week each to $10 a week each. It's what we use for eating out with friends (Shannon with the guys or me with the girls), picking up the occasional cup of coffee, or when Shannon buys me flowers. It's what I saved and saved in order to buy new running shoes. Now I'm saving for a Mac (because Shannon says they're too expensive and are difficult to have repaired overseas). It may take me 2 years to save the difference between a PC and a Mac (so far I have about $40 saved), but once I have it saved I can spend it however I like, even on a Mac. We have always given ourselves this allowance, even when money was really tight (we may have changed the amount, but we always got something each week). At least for me, getting some money of my own each week has helped me to not resent our budget, our income, or our choice of lifestyle. I have power (muh-ha-ha!) over some amount of money, no matter how small.
6) We don't buy unnecessary stuff. In this area, it helps that I am not a pack-rat. I don't like clutter. I'm not a clothes-horse. I choose quality over quantity almost any day. All of Lane's toys can fit in our Land's End Tote Bag (size medium (and to whomever bought this for us for our wedding, if you read our blog, we LOVE this bag)). Each year Shannon and I get a few new pieces of clothing, but we don't go crazy. We buy stuff we like that will still be in season next year, not stuff that is only trendy right now. We (ok, I) also shop clearance racks. I set Shannon's mom and stepmom on the goal of outfitting Lane for next summer by shopping the $3 and $4 sale racks that are popping up in the U.S. right about now. My friend Margo once told me that she would look at the price of an article of clothing and if she would wear it once per dollar it cost (e.g. if it cost $20 would she wear it 20 times?) then it was worth buying. If she wouldn't, she would pass on it. I have often thought of this when purchasing clothes and shoes. We also don't get new electronics just because we want them, but only if we need them. My cell phone in the States was horrible. The backlight didn't work so I couldn't see who was calling if it was dark. But it still made phone calls, so I kept it. I used the same cell phone for 3 1/2 years. Shannon used his for 5 years. Who does that these days?
7) We set goals. We set the goal of X amount of dollars for our emergency fund. We're about 2/3 of the way there (in 2 1/2 years of saving). We want to go to Fiji for our 10-year anniversary. It's 7 years away. We're going to start saving towards it in January (after we've met a pledge to our church).
8) Other people have greatly blessed us. Seriously, this has been a huge factor in our financial situation. When we got married, my mom made our wedding cake. When we went on our honeymoon, someone else bought our airline tickets as a wedding gift. We used my mom's (now our) timeshare, so we only had to pay the exchange and booking fee. Shannon's parents and their friends (and our friends!) have bought us things like Lane's pack 'n play, her car seat and stroller, cloth diapers, and enough clothes to last her through her 1st birthday. My friend Megan made us receiving blankets and burp cloths and 3 of Lane's grandmothers have made her blankets. We haven't needed to buy her anything except a few white onesies.
9) We take advantage of programs like frequent flier miles, greenpoints at Lowe's foods, and new glasses (frames and lenses) for $99. We've flown all over the U.S. for free, gotten groceries for free, and bought Shannon new glasses for cheap. We don't use every freebie program known to man, but the ones that we do use, we use.
10) I cook from scratch and we try not to eat out more than once a week. This might not seem like a big deal or that it could save that much, but when in North Carolina I could feed Shannon and myself on $50 a week by cooking from scratch. If you go out to dinner, it easily costs at least $20. Oh, what I could cook for $20! Here things are a little cheaper and it takes so much longer to cook (new and different things available in the stores) that we try to eat out once a week to give me a break from the kitchen. There are times when life demands eating out a bit more, like when I was pregnant. In my first trimester I was so exhausted that we ate Mexican food a lot, but we used "buy one get one free" coupons. I would also get hungry at the most random times, so we'd stop for a quick bite to eat often. The key is to plan accordingly (keep a granola bar in your purse) so that you're not constantly caught out and about and starving.
So, there you have it. None of it is earth-shattering, at least not to me. But maybe it will help one of my loyal (ha!) readers to gain a bit more control of their finances so that they too can do something fantastic like go to Fiji for their 10-year anniversary.