In April 2017, my partner and I made a decision to give everything we've got to digging ourselves out of the hole we were in—not enough money coming in, borrowing from the rent and scraping it back during the month to pay on time, relying on credit for essential purchases when nothing would stretch any further. We were up to date on all our bills; that was in our favour, at least, but there was no forward motion, no end goal, no way out of the cycle. Or so we thought.
With a carefully written budget in front of me, I could see that we weren't actually wasting large amounts of money on unnecessary purchases, as there wasn't much left each month after all the essentials were paid. And so instead, I looked at how much we were spending on "essentials," and where that little bit of leftover money was going. The latter is pretty obvious—frittered away on little treats to make the present seem more bearable. A packet of biscuits here, a bottle of wine there.
I rewrote the budget, rounding all payments up to the nearest pound. Then, whenever a payment went out or I paid a bill manually, I transferred the extra pence to an online savings account. Any money leftover from the food budget got saved, and underspends anywhere got saved. Any spare change in my current account, providing there was enough for upcoming payments, got transferred to savings (known as "account skimming"). It became a personal challenge to see how quickly I could save money, and I was loving it! The fact there was always a pound or two left at the end of the week from the food budget got me thinking about the first of the questions I'd asked when I first wrote the budget—how much of what we class as essentials is really essential? I should point out here that we are a family of seven— two adults, five kids. Two of the children have food allergies, one is vegetarian, and there are a few other restrictions in that area too, due to preferences and aversions. As an example of how this impacts us financially, a litre of plant "milk" costs £1.40. Our weekly budget in April 2017 was £120. One thing at a time, I started eliminating non-essential food items—crisps, biscuits, that sort of thing—and then foods I was buying for convenience that I could make more cheaply from scratch. By the end of October, our spending was down to £85! There's a lot more baking, a lot more preparing snacks rather than buying grab-and-go, but as well as being better for us physically, it's made little treats feel like treats again, and the difference in spending has made a huge impact on our life.
We built up a small fund for emergencies, as set out in Dave Ramsey's "babysteps" plan, and then started saving for Christmas. With our reduced outgoings, we were able to save and cashflow our entire Christmas—totally independent of any reliance on credit for the first time in years. In comparison to most, it was probably small and inexpensive, but it was all OURS. Not paid for with next week's money, not owed to family and friends, no worries of missed payments costing us more money.
We haven't borrowed from the rent since we started this in April. We have made plans for the future. There is a light at the end of the tunnel. I can highly recommend Dave Ramsey's plan for seeing that light, and for finding the way to get to it, but the hard work and determination to get to is has to come from you!
Our next goal is rather more extreme. We have three large purchases to make—a set of bunk beds, a freezer, and a fridge. If we can manage three months spending on nothing other than bills, credit card payments, and our little £85 a week food budget, we can save enough to buy all of them outright with our own money; no extra credit, no extra debt. It is now February first and we managed an entire month with only three unplanned "spends:" a dental appointment, a prescription, and one over-budget on food when I dropped the ball and didn't meal plan for a week (lesson learned there!). And guess where we're going when I've finished typing?
We're going to the furniture shop to order the bunk beds, AND an extra mattress, as we'll be using the good bits of the two single beds we're replacing to put together a bed for our seven-year-old. Not only did we achieve our goal, we overshot it by a whole £50!
Right now, I'm feeling a mixture of elated that we did it, and that we can go and buy these things our kids need within just one month of starting to save for them, and utterly sick to the back teeth of thinking about money and wanting to go on a massive spending spree to buy lots of stuff we don't actually need! I'm not giving in though. Our three months no-spend challenge ends on the first of April, exactly one year from the day I first discovered Dave Ramsey, which is a rather poetic coincidence, and a very fitting way to mark the first year of the rest of our lives.