How Our Money Story Can Help You Improve Your Finances

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We all have a money story, but did you know you can re-write the ending in order to improve your finances? Here’s how we found the motivation to change our money mindset.  

Are you living with the stress of debt? My family struggled with debt far longer than we should have before my husband and I finally woke up, changed our ways, and began saving our money.

We struggled through the Great Recession of 2007 – 2009. At that time, I had my own early childhood education business. Due to the economic downturn, I ended up closing my business and sold all my classroom equipment and supplies.

I went back to work for The Man.

Getting Out Of Debt

Eventually, we found Dave Ramsey and read his books, The Total Money Makeover and Financial Peace. We became gazelle intense about getting out of debt.

We attended Financial Peace University, a life changing 9-week class that focused on learning how to set up a budget, get out of debt, and save for the future to achieve true financial peace.

Going through the course with other people who were in the same boat really did change our lives.

We cut up all our credit cards. Selling stuff on Craigslist became a regular activity. No more meals out – we didn’t step foot in a restaurant. Beans and rice, baby!

We paid off a huge amount of debt using the debt snowball method.

A lot of progress was made, but it wasn’t enough. We ended up filing for bankruptcy and lost our home. This was especially hard because it was a family home built by my husband’s great-grandfather. Talk about feeling guilty!

Admitting our financial blunders wasn’t easy, but it became the fuel for wanting to do better. Another thing we should have done was to build up an emergency fund. Unfortunately, we found this out the hard way.

The Importance Of An Emergency Fund

Unexpectedly, my husband almost died.

He was working out of state and his brain blew up. With no warning, my healthy, hard working husband experienced a ruptured brain aneurysm.

According to the Brain Aneurysm Foundation, 40% of ruptured brain aneurysms result in death.

This was the scariest time of my life – I didn’t know if he was going to live or die at first.  I still thank God that my husband survived.

It’s only through hindsight that I realize how unprepared we were to handle financial emergencies.

At the same time my husband was lying in a hospital bed far from home, the non-profit agency I worked for decided to cut back everyone’s hours.

Of course, my primary concern was whether or not my husband was going to live, rather than worrying about my paycheck.

After my husband came home and continued his slow recovery, we knew we had to change our money story. We needed to focus on building an emergency fund and working to grow our savings.

Making Extra Money

We looked for ways to reduce our spending even further, and I found ways to increase my income, including making extra cash from hobbies and from side jobs. You can cut spending to the bone, but to really improve your finances, you’ve got to make more money.

I signed up for Rakuten, an online money-saving shopping site. Joining Rakuten helped me save money, but I also earned cash back on purchases. In addition, I earned money by referring friends to Rakuten with a simple email, so my friends could save money, too.

These past few years have been challenging, as I was the sole bread winner of our household until my husband finally received permanent disability. He was then able to start collecting his pension before full retirement age.

Reflecting on the truth about our money story, I realized that yes, we made just about every possible mistake with money.

The good news is that we changed our spending and saving habits to win with money. Everyone’s circumstances are different, but I hope some of these ideas will help you to work on improving your own finances.

Our money story may help you improve your finances if you take these 5 simple but important money rules to heart and make them your own:

5 Important Money Rules To Improve Your Finances

1. Get out of debt – and stay out!
2. Save more – spend less than you make.
3. Have a back up plan.
4. Build your emergency fund.
5. Invest in yourself.

1. If you’re in debt, get out and stay out!  

We cut up all our credit cards and never looked back.

We sold stuff on Craigslist and eBay, took side jobs, and started side hustles to help pay off our debt. Once we were out of debt, we never borrowed money again.

2. Save more – spend less than you make.

Live within your means.  Any amount you save is yours to keep, even if it’s just a few bucks a month at first.  It adds up, and creates momentum.

One of the best ways to catch up retirement savings after a late start is to earn more money. But you still have to spend less than you make.

3. Have a back up plan.

Your job is not guaranteed.  What other creative things can you do to make money?

Whether it’s starting your own business, keeping your skills updated and fresh, or knowing you can side hustle, it’s important to have a back up plan.

Although you have a little more control over some aspects of it, your health is not guaranteed, either.

As my husband and I learned first hand, a disabling illness or accident can strike at any moment (usually the worst moment).

Take steps to keep yourself as healthy as you can and figure out a way to generate a passive income.

4. Build your emergency fund.

Emergency funds are for emergencies, not for things that you know will need to be replaced periodically.

You know your car won’t last forever, so have a separate savings fund for that.  

Your emergency fund should have enough money in it to cover your basic expenses for 3 to 6 months. That can be a lot less than you think – you’re going to cut back on all the extras when you’re in crisis mode.

5. Invest in yourself.

Right out of high school, I went to college and got a social work degree. Unfortunately, social work is a very low-paying field.

When our daughter was little, I enrolled in early childhood education classes at an inexpensive community college. This helped me start a profitable childcare business. I paid for these classes as I took them, with no college debt.

Years later, I found the least expensive online college and got a second Bachelors degree in a better paying field. Again, no college debt.

This became my best paying side hustle, better than my primary job. I currently work full-time as a social worker, and part-time as a speech therapy assistant.

Now I’m investing in my future, trying to catch up on retirement savings.

I finally started contributing to the retirement plan at my primary job. At first, I only contributed $20 a month to my plan. That’s right – only $5 per week. With every raise, I increased my contribution. 

I want to encourage you to do this, too! Even if you only save $5 a month at first. Saving small amounts regularly will create a saving habit, and the money adds up over time. It’s OK to start small, but get started!

If you don’t have access to retirement plan at your job, consider opening an IRA. Make it easy to contribute to your IRA by setting up automatic transfers from your checking account. My husband and I started IRAs again. This time, we’re going to let them grow.

The key takeaway I want you to get from our money story? It really is possible to improve your finances by following these five simple money rules. It might take some creative thinking, but you can do it!

You’re not too old, and it’s not too late! You can get good with money.

Question:  What is one change you could make to save more money for your retirement or to improve your finances? Be sure to comment below!