Penny started her year with a New Year's Resolution to ban the words “I can't afford it” in her household. It made a big difference to the negative feelings she had about their money situation.
I have asked Penny to do a guest post for me this week. Penny is a frugal mom making the most of meager means, stretching her dollars, and saving a quarter of her annual income. She blogs about it at The Saved Quarter.
Like many people, I started 2010 with a few New Year’s Resolutions. I was ready to let go of my negative attitude toward our negative bank balance and do something to bring both into the positive.
Going into 2010, my family, like many in our country, was experiencing the economic downturn directly in our household. My husband is a small business owner and business took a significant dip in 2009. In order to keep the business afloat and not lose the 12 years of hard work he’s put into building it, we took a significant personal pay cut. We were not well off to begin with, and we haven’t always made the smartest financial choices, but we had enough to make ends meet and sometimes overlap; I couldn’t make ends meet anymore. I have been a stay-at-home-mom since my nearly 5 year old son was born, adding a daughter to our family 2 years ago, and going back to work now would result in a net loss of income due to the exorbitant cost of child care in our area. I didn’t know what to do.
I wallowed in my own negativity, feeling ashamed of my family’s situation, as though we were bad people because we were broke. I worried that people would think we weren’t working hard enough despite my husband’s continued 12-14 hour work days. I constantly worried because our bills left our bank account in the red before we bought any food or gas for the car. I hated feeling like a “poor person” because I couldn't afford give my children little pleasures. I thought, we’ll never get ahead. We’ll keep having unexpected expenses that keep us from becoming financially stable.
We put aside our pride and accepted help in the form of public assistance. We’re incredibly grateful for the financial safety net that is in place so that families like mine – hard working, committed to getting back on our feet as quickly as possible – have a little help to do so. Still, it was humiliating, and giving all of our financial mess on paper for someone else to scrutinize certainly shed some light onto the poor choices we’d made. But, assistance gave us just enough breathing room that we could start to make better choices in our financial lives, and I wasn’t about to squander the chance. I made my New Year’s Resolutions with the goal of bettering our financial situation in mind.
We Resolved to Save an Emergency Fund
My first resolution was to build a 3 month emergency fund so that we could have a back up plan in the case of an emergency and not need to rely on anyone else to take care of us. Obviously, in order to qualify for public assistance, we have an income below the poverty level; it’s not easy to save when every dollar is spent meeting basic needs, and it is taking a lot of diligence and perseverance to meet that resolution. I’m saving from our personal income and I’m doing odd jobs, babysitting, mystery shopping, selling everything but the kids, taking advantage of money-making coupon and rebate deals at the grocery and drug stores, and anything else I can find to bring in a little extra money to meet my goal. I decided to blog about my experience in saving and taking charge of my personal finances, which I’m doing over at The Saved Quarter.
We Resolved to Change Our Money Language
The second resolution was to change the language I use to talk about my financial situation, removing myself as the victim and giving voice to the choices that I do have.
Eleanor Roosevelt once said, “No one can make you feel inferior without your consent.” I was not willing to feel inferior anymore because of my financial situation. Having a low income doesn't define me as a human being. I'm not a “poor person”; I'm a fine person who happens to have a low income. Having a low income doesn't make me poor, bad, or worthy of shame. The fact that I'm doing my damnedest to NOT have a low income, taking advantage of every opportunity that comes my way to advance my family's quality of life, is certainly not something I should feel ashamed of.
Banning the Words, “I Can't Afford It”
I also decided to stop saying, “I can’t afford it,” especially in front of my kids. It puts the position of power on the money or the thing rather than on me and my choices. There are things I genuinely can’t afford, like a mansion or airplane, but most of the things that I say I can’t afford are really things I could but choose not to spend my money on. I could choose to buy a cheap toy for momentary pleasure, or I could save that money for financial security. Which is closer in line with my value system? Which is better for my family?
I don’t want my kids to grow up with a feeling of scarcity. Our lives are abundant – we have a warm home in a safe neighborhood, enough healthy food, clothes without stains or holes (even if they are second hand), toys to play with, good friends, and a loving family. Not everyone is so fortunate. The “I have” list far exceeds the “I want” list, and I want them to grow up knowing that. Saying, “I can’t afford” in front of them puts the don’t-haves up front, in a position they don’t deserve. Instead, I’m saying, “That’s not how we are choosing to spend our money.” I’m explaining why, too. The toy may be fun now, but how long will that fun last? Is it worth the cost? Do we have something at home that will do the same job, or can we make something similar? The kids are learning that we control where our money goes, and that spending is a choice. It’s also a great opportunity to explain our values in context, which I hope will have a deeper impact.
My husband and I have also made a point not to raise our voices when discussing money, something that has greatly reduced the tension level in our home, and to never argue about money in front of our children.
We’ve all but destroyed the words “I can’t afford it” (although it pops up every so often, like when a friend recently invited my husband on a golf trip that would cost more than a month’s rent.) We’ve successfully changed the tenor of the conversations about finances in our home and were able to sit down and talk about how to best use our tax return to benefit our family without anyone screaming, crying, or leaving the table in a huff. Trust me when I say that this is a vast improvement!
How We Saved Money Towards Our Savings Goals
It hasn’t been easy, but we’re right on track with our savings goals for the year. Here are a few of the things that have helped me to save:
- I have a budget and pay cash for everything but rent. I can’t overdraw or overspend cash, there are no fees for using cash, and it’s accepted just about everywhere.
- Every month, I take $100 from our paycheck to pay ourselves first, a habit that will continue and grow even after this year’s challenge ends.
- No amount is too small to save. Any unexpected money that comes into my life goes straight into the emergency fund. Find a penny, pick it up, put it into the fund!
- I’ve found alternative methods for getting the things I want without spending more than I budgeted. For example, I discovered a method of clothing my kids close to free. I plan ahead, shop at garage sales, thrift stores, and seasonal clearance with that plan and attention to detail, and resell the clothes once my kids have outgrown them.
- All of our services were scrutinized and negotiated, cutting the cost of our utilities, phone service, and insurance. You’d be surprised how much you can cut off of your bill just by calling and asking politely, and how much companies are willing to give to keep you as a customer!
- Following the mantra, “Use it up, wear it out, make do, or do without,” I haven’t replaced things just because they’re no longer attractive, and have made repairs to keep things going instead of buying new. I’m also learning to make things instead of buying a store bought version.
With a little help, a little resourcefulness, and a lot of positive attitude, I’m certain that this will be the year that I follow through with my resolution, and the first step toward changes needed to secure an independent financial future.
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