Last week I started a new series ~ Top 10 Tips for Saving Money ~ where I’m listing my family’s tips for how we’re saving about 50% of our income right now.
This week’s tip is a big more significant than last week’s tip of simply staying away from stores. Staying away from stores certainly helps me save money, but this week’s tip enables us to save a lot more than staying out of stores.
This one big change we made in our lives a little over a year ago saves us a large portion of money each month and could be considered a little radical: downgrading housing. We knew we couldn’t pay a large mortgage AND save to build a new house, so a couple of years ago we decided to put our nice, comfortable home up for sale. It finally sold last year and we moved into a little house we had owned as a rental. Compared to our old home, the new home is very different. It was in sad shape when we moved in and we have slowly been renovating it. We’ve been living in quite a lot of chaos for some time now. And since we had too many things in the old, bigger house, it’s been quite a struggle getting everything to fit in the smaller home – even though I have purged a lot. We’re learning to live with less – a great lesson – and one I still have a long way to go before I get it figured out.
But selling the old home cut our monthly housing expenses by 2/3 (66%)– and that’s mortgage only so it’s a little more when we include property taxes and insurance. That’s huge! Instead of going on a spending frenzy with our new found “riches,” we save the extra money each month – as if we were still paying as much as we were before. And that helps us save more than we ever could if we would have stayed in our previous, more expensive house. While I often wish I had a bigger, fancier, insert your choice of adjective here, home, saving money to help us reach our goal is more important right now. And have a miniscule mortgage is really nice!
Here are a couple other disclaimers about how we are able to save so much.
We have none of this:
~ Credit Card Debt – We use credit cards for our home based business (and get some nice rewards, honestly). We also have a couple personal credit cards – but don’t use them much as we try mostly to pay with cash. All of our credit cards bills are paid in full each month. We do not carry balances.
~ Student Loans – My husband and I have 5 college degrees (undergrad and grad) between the two of us. We managed to make it through all of the degree programs debt-free thanks to good scholarships, generous parents, hard work, and the military.
~ Car Payments – We drive decent vehicles with high mileage. I’d love to drive a new van, but I sure don’t want the payment and right now we’re saving money for a new home instead of a car.
You can read Part 1 of the series here. Stay tuned for Part 3 next week! I’ll jump into the specifics of how I save at the Grocery Store