Nothing Changed When we Paid off our Debt

Mr. Vega and I became debt-free a couple of years ago. It happened quietly, and without fanfare. He’d been working hard to negotiate some old, unpaid credit card bills that had gone to collection, and ended up settling about $10,000 worth of debt for around $4,000, one bill, one phone call, at a time. The only thing left was my car payment, which for some reason, I had been stalling on paying off even as we amassed a healthy savings account. Then one day, on a break from work, I called the loan company and did the payoff over the phone. Just like that, we were free from debt.

And nothing changed.

Not having monthly payments outside of rent and utilities is nice, but we have continued to save so aggressively that our lifestyle hasn’t changed: we cook at home, search out free and inexpensive entertainment, consider even the smallest purchases carefully, and do our best to negotiate the best rate for everything we spend money on. This year, I volunteered to be a support person for our bocce league in exchange for free registration ($45), and a $25 weekly credit, which I share with Mr. Vega, at the team’s sponsoring pub. We exchanged both our juicer and our vacuum cleaner several times because we kept finding lower prices. And on our last Date Night, we hustled over to a local bar right after work because the first sixteen customers that ordered cheese plates (normally $16) got them for free. We chase bargains because it’s fun for us: we like getting a good deal nearly as much as we enjoy whatever it is we’re buying or consuming. Living frugally helps us live a little more lightly on our ailing planet, as well: growing and cooking as much food as we can for ourselves eliminates a lot of packaging, as does buying in bulk. Every article of clothing that we buy used or trade with friends is one less thing that has to be shipped from overseas and then driven by truck to our local store. Our habits and practices are right in line with those of our friends who earn less than we do, or who are busy paying off debt themselves. We also socialize with people whom we suspect make and have much more money than we do, but our friendships revolve around time spent together enjoying activities that don’t cost much, so the subject of money rarely comes up.

This week, I made a long-overdue phone call to roll a 401(k) from a previous employer into a personal IRA. I spent quite a bit of time speaking to a customer service agent at the investment firm, who was gathering our personal financial information in order to ensure I was getting into a product that met our needs (and presumably the company’s need for profit, as well). Part of our conversation went like this:

CUSTOMER SERVICE GUY: Okay now, so, if we were to take all your debts, your car loans, personal loans, credit cards, home equity lines of credit, and student loans… how much money would it take to pay all of that off today, hypothetically speaking?

ME: Three hundred and forty dollars. We use an airline miles credit card that we pay off each month.
(pause.)
CUSTOMER SERVICE GUY: WOW. Well, um… Congratulations!

I really enjoyed the feeling of hearing someone who is privy to the innermost financial workings of thousands of families so taken aback. We are not wealthy, earn a modest income, and in fact, are woefully “behind” in our retirement savings, but simply being debt-free is so unusual, it seems, that it rendered this guy momentarily speechless.

So, nothing about how we live our daily lives changed when we paid off our debt. We didn’t buy fancy new wardrobes, take a vacation, or start upgrading our electronics. But there is an indescribable lightness about us now that we go to work every day because we want to be of service and earn money to save for our house instead of showing up just because we couldn’t make the rent if we didn’t. Car troubles for us these days are inconveniences and not crises. And we moved halfway across the country to pursue our dreams knowing that if an emergency should arise for any of our family members, we could afford to be at their side within a day’s time.

Nothing really changed when we paid off our debt… but somehow, everything is different.

 

 

When Plans go Awry

Last month, we were supposed to fly back to California to attend the wedding of one of our dearest friends. We felt very fortunate that many of our close friends were also on the guest list, so that we would be able to see many loved ones all at once. Our newest niece was born a few months ago, and we were looking forward to meeting her, as well. The flights had been booked and hotel rooms reserved months in advance.

And then I got sick.

Not just a little sick, either… I was running a temperature, my sinus cavities and ears were filled with fluid, I had a cough, and my throat felt like it was on fire. The doctor at the Urgent Care clinic sent me home with some powerful antibiotics and orders to stay in bed. There was no way I was getting on an airplane. What happened next is going to read like an advertisement for the companies we used, but we got such terrific service across the board that they earned the good word-of-mouth!

Fortunately, we had booked our flight using our Southwest Airlines Rapid Reward points, and there was no penalty for canceling the trip. All the points went back into our account. Our hotels had been booked through Hotels.com, and canceling by 6pm local time the day before meant that we wouldn’t have to pay a dime for the rooms we had reserved. Except that I didn’t throw in the towel until about 9pm local time. Mr Vega called customer service and explained the situation… And they let us cancel for free even though we were late! We had reserved our weeklong car rental through Hotwire.com, who also allowed us to cancel without penalty. Finally, we had each gotten some new clothes to wear to the wedding… which we returned, unworn, to the department stores where we bought them.

All in all, our canceled trip cost us… nothing.

I wish I could say that it was all due to my fantastic travel savvy, but the truth is, in a few cases, we were just lucky. To keep costs down, I frequently bid on and pre-pay for non-refundable rental cars at the name-your-own price sites, or reserve hotel rooms that come with very low rates and no-cancellation policies. To us, those are acceptable risks that we take in order to get the savings. This time, the travel gods (or the cancellation gods) were with us.

But in addition to taking extra vitamins in the hopes of making sure that we never have to miss another trip, you can bet I’m going to read the fine print from now on when we book our travel, just to make sure we could get out of it if we needed to.

All About That Bocce

When Mr. Vega and I moved to Austin last Summer, building a strong social network was (and still is!) a very high priority for us. We’ve read that close friendships prevent depression, extend lifespans, and lessen the likelihood of long periods of unemployment. Oh, also, it’s fun to have friends! Fortunately, Austin has plenty of opportunities to socialize… outdoor films, free music, art walks, fun runs… you name it. One of the activities we happened across was Austin’s inaugural season of Major League Bocce– which sounds more advanced than it is, as beginners are welcome, too! We’d never played bocce before, and we didn’t have a team to join with, so we signed up to be placed with other random folks, and convened in a little park on a hot summer night to see what we’d gotten ourselves into. We were placed with two other couples and one single guy… all of whom had a fair amount of experience playing bocce, but fortunately for us, the learning curve is pretty shallow (mastering the game, however, is another story!). And while the learning curve isn’t steep, the park where we played is We spent the next six weeks chasing our balls as they rolled down the hill into other players’ courts, hollering “Sorry!” and learning how to roll the ball left to make it go to the right. Afterward, we repaired to the local pub for some adult refreshment and conversation. It was a great good time, and we ended up becoming close friends with one of the couples from our team.

We’re constantly looking for ways to be of service in our new community, so when I learned that Special Olympics Texas has a Bocce Competition, we were eager to help out. We had a great time escorting the athletes to their games, keeping score, and cheering them on. Because they had spent eight weeks training for the competition, they actually had more experience than we did, and we picked up a few tips! More than that, we got to see how truly accessible the sport is for people of all age ranges and with a wide range of physical abilities.

We returned to our second season with a renewed enthusiasm for the game, and when we were asked to help out again, we didn’t hesitate. This time it was a special event at a new apartment complex: They have a bocce court on the property, but none of the residents knew how to play, so we spent a pleasant couple of hours on a chilly Fall night showing them the ropes (at least as well as we know them). The neighbors got to know each other better, and we got to drink some free-to-us beer and play our new favorite game!

Season three will find us back on the bocce court, where we’ll team up with some new faces, and deepen our friendships with the folks we already know. I’m also volunteering with the league this season, so I’m looking forward to getting to know people from a different perspective.

Moving to a new city and creating friendships isn’t easy, but organized social events and sports teams provide an opportunity to get to know a group of people who share your interests, and the repeated exposure gives friendships a little time and space in which to grow. And sometimes it’s nice to mix things up a little, even if you’ve lived in the same place for years… you can never have too many friends in your life! Who knows? Trying something new just might open up a part of life you never knew you were missing!

Why I’m Working Full Time

If you do an online search for “full-time work,” you’ll come up with loads of articles about how to fire your boss, escape the cubicle, and travel the world as a location-independent freelancer. I accepted a full-time position last week, and as excited as I am about it, I’m having a hard time finding anything good written about working a traditional schedule. I’ve been a freelancer and part-timer for most of my career, and have enjoyed the higher hourly pay, the flexible schedule, and the not really having a boss thing, but a job came my way that was so well-suited to me that I couldn’t turn it down. So I said “Yes” to spending forty hours each week doing the work that I love, and so far, I’m glad I did.

Probably the most obvious benefit to having a salaried position is knowing that I’ll be receiving twenty-four identical paychecks each year. A quick look at our marriage’s financial history reveals that money tends to get pretty tight each January and July… we’re looking forward to having a consistent amount of money to work with each month. Also, because we’re saving for a house, we’ve always wanted to live on one income, but it’s been challenging having two incomes that can vary so widely month-to-month. We now have an opportunity to try living on our one stable income, and to bank the rest.

Also, my new job, while paying about 75% of the money that I am used to earning as a freelancer, also comes with comprehensive benefits. My new health insurance will save us about a hundred dollars each month over having me listed as a dependent with Mr. Vega’s employer, and the generous retirement package will go a long way toward helping us catch up on the nest egg we started saving for in our thirties, rather than early in our working lives (Millenials, take note: Compound Interest is your friend… start saving now!). Additionally, my new situation will go a long way toward alleviating the stress that comes with my husband’s job in a volatile industry. If his job goes away with the looming corporate merger, it will be unfortunate but not tragic. Or if he chooses to pursue some fabulously creative opportunity that comes without benefits, we’ll be able to keep him covered under mine.

Financial stability aside, it will be lovely to have a base of operations for my work, and not feel like I’m living out of my car during the work week! For the first time in… well, ever, I’m going to have my own office, which means my reference books and office supplies won’t have to compete with my novels and personal stationery for a very limited amount of shelf space at home. Several of my other employers provide break rooms with sinks, refrigerators and microwaves, but I’ve rarely worked in the same place two days in a row, and so leaving food at work has not been a viable option for me. I’m perhaps unduly excited about the possibility of stocking my little fridge shelf with lunches and snacks for the week, and not having to worry about forgetting my lunch when I have a hurried morning!

Another exciting aspect of having a full-time job is that I’m no longer competing with colleagues for work. I’ll be able to focus my energy on collaborating with my co-workers to do the work we’ve been hired for, rather than trying to beat them to the next gig, before this one is even over! Everyone in this new workplace has been so welcoming and supportive, and I can’t help but think that their job security is part of the reason why.

All that said, the folks at my other part-time jobs have been so wonderful to me that I’m loathe to leave them in the lurch, so I’ll be hanging in on a part-time basis for as long as I can… one evening a week at one, and half a weekend day at the other. And you guessed it: those checks will go in the House Fund, too.

But I’d be lying if I said I wasn’t a little nervous about my new schedule: for the past week I’ve come home at 5:30, spent a couple of hours making and wrapping holiday gifts, had dinner with my husband, and gone to bed early. When I complained that there wasn’t much time for actual living after work, Mr. Vega replied with a smile “Welcome to full-time work!” I’m sure it won’t be long before I’m one of those folks shouting “TGIF!” and getting very excited about the return of Daylight Saving Time. I’ve already discovered that there’s very little margin for error in my daily schedule: if the dishes don’t get washed before bedtime, breakfast is going to be a disaster, and we haven’t got enough clothes in our closets to be able to miss Laundry Day.

All in all, though, I think the benefits to this particular full-time job will far outweigh the inconveniences. I’m looking forward to finding out more!

Paying Cash for Cars isn’t as Hard as it Seems

My grandfather gave me my first car, which had been his, when his deteriorating vision made it unsafe for him to drive any longer. It was a seven-year-old Oldsmobile that had begun its life as a rental car. It lasted four more years in the negligent possession of my teenage self, before literally going out in a blaze of glory (due to a previously undetected fuel line leak) on a California highway.

I bought my first– and only– brand-new car when I was 22, because I didn’t have the credit to finance a used car (there’s some great logic). The cheapest thing on the lot was a 3-cylinder Geo Metro convertible, which I drove for six years, until it was totalled in an accident that left me unharmed, but also left me with an insurance check that wasn’t nearly enough to replace the car. I worked out a deal with a friend’s brother who was joining the military, and no longer had use for a car. He gave me a great deal on his 10-year-old Honda, and let me pay him in two installments.

When that car was about to die, at the end of my twenties, my terrible credit and I managed to get a decent deal on a five-year-old Miata, but I had to list TEN references to qualify for a loan. I finally began to learn the value of regular car maintenance and started keeping to a budget that allowed my poor credit to recover. When that loan was paid off, I drove debt-free for three more years, but I didn’t set anything aside for the day when I would need another car.

My final auto loan was as well-researched as the car purchase, and I was so proud to walk into the dealership with a check from the finance company, gotten at a great interest rate. I paid the car off early, and went all Scarlett O’Hara: “With God as my witness, I’ll never make car payments again!”

Mr. Vega and I began dating as he was just coming out of a prolonged period of unemployment, and he was driving a 1987 Wag-o-Van that he had gotten through a friend-of-a-friend for $400, and that wasn’t very safe (or even street legal). I only rode in it once, and it was so frightening, I still have flashbacks! He was hired as an outside sales representative, and found himself in the heartbreaking position of having to use his first month’s pay to buy a reliable car for work instead of traveling to attend the wedding of his only brother at a resort in Mexico. He paid all the money he had in the world–$3500– for a well-maintained twenty-year-old Honda CR-X with 200,000 miles on it, and spent the rest of the summer helping me come up with creative recipes from my Project Angel Food box (remember those?), and the fresh produce I got from my friend’s backyard garden. His co-workers ribbed him for driving such an old car, but the jokes quieted down when one of their luxury cars was repossessed from the office parking lot one day, in full view of everyone.

We commuted to our jobs in our paid-for cars as we saved up to pay cash for our own modest wedding. We parked them out in front of the cheap 486-square foot apartment we rented in an edgy neighborhood, while we paid off the last of our debt and began to aggressively fund our Emergency Fund. We looked for Groupons for oil changes, and Mr. Vega did most minor repairs and maintenance himself. We drove those cars to the library to borrow DVDs for our weekend entertainment, and occasionally for a splurge at the $3 movie theater.

By the time my car began to develop problems that a series of mechanics could not resolve, our new frugal lifestyle had left us with enough cash in our Emergency Fund to replace it, or even upgrade (in Los Angeles, car trouble definitely qualifies as an “emergency”). We test-drove a bigger, nicer truck. We tried out a newer model year of the same SUV I’d been driving. Ultimately, we chose a late-model subcompact that used about $40 less in gas each month than my SUV had. Even with the mystery mechanical difficulties, we were offered enough in trade to offset about half the cost of our new-to-us car. We wrote a check for the rest, and our ultra-thrifty habits helped us replenish the Emergency Fund over the next several months, and even begin saving to buy a house someday.

After three more years of  a daily 40-mile round-trip commute, the CR-X was beginning to need more frequent, and more costly repairs, but still had enough life in it to bring it to Texas from California when we moved here earlier this year. We also wanted to make our next car purchase in Texas, where we knew we’d save about $1000 on registration and taxes alone, all else being equal. In addition to saving for a house, we started a little Car Fund and began making small weekly deposits.

Finally, the day came when Mr. Vega had had enough of playing the “Will My Car Start Today?” game, so we sat down to look at our budget and consider our options. We found that over the previous twelve months, we had spent a bit more in repairs than the vehicle was actually worth. He advertised his little Honda (with full disclosures) on Craigslist, for the same $3500 he paid for it, and the offers started pouring in. No one expects a car that old to be trouble-free, and that model is still widely sought-after. The young man who bought it was thrilled to get a “classic” car so cheaply, and will happily spend his weekends working on it in the driveway. The money we got from the sale of that car and what we’ve set aside in our Car Fund paid for about 1/2 of the newer car, and the rest came from our House Fund (we both agreed that this time, our car purchase did not qualify as an “emergency,” and have decided that we are willing to delay a home purchase for a few months in order to purchase the car).

My husband had been wanting a pickup truck for quite some time, and now that we live in Texas, it seemed an obvious choice. He test-drove half a dozen of them, but found the ones in our price range to be about ten years old, and with more than 100,000 miles on them. As reliability was the most important factor to us, we set our sights on something smaller. Since we were replacing a two-seater, we reasoned, we might as well consider another. We narrowed our search to Smart Cars and Miatas, and eventually, the Miata won. We came across a 1997 model with only 27,000 miles on it, but that one was snapped up before we could even drive it (someone got a great deal!). Finally, we found a 2009 MX-5 that was in mint condition. Mr. Vega staged a battle on the showroom floor when they nearly sold it out from under us after he had negotiated a price and announced his intention to buy it, but he emerged victorious, wrote a check, and left his own car in the dealership parking lot to come get me from work in our new roadster. As all happily married men know, “Mama Gets the Good Car,” so I’ll be cruising with the top down while my husband takes the subcompact to work.

Meet our new-to-us car, which I have named "Benedict Cumberbatch"

Meet our new-to-us car, which I have named “Benedict Cumberbatch”

Later that night, he examined the paperwork he found in the glove box: The original owner financed the car when it was brand-new, paid on it for five years, had it serviced like clockwork at the dealership, and the moment the loan was paid off, he got 1/3 of what he paid for it (not counting interest) to use as a down payment on another new car.

What WE got was a five-year-old, meticulously cared-for car with lots of upgrades, for below blue book value. Unless our needs change, and if nothing terrible happens to the car, we’re likely to keep it for a decade or more.

It will take us a few months of hard work and careful spending to get our House Fund back to where it was before this purchase, but we’re fortunate that living far below our means has become a way of life for us. We eat a lot of home-cooked meals, seek out free entertainment, and we only buy clothes and shoes when what’s in our closet begins to wear out. Those things are mostly fun for us, though, and even when they aren’t we do them happily, because when bigger things (like cars and computers) need repair or replacing, we’re able to handle it without going into debt. And most importantly of all, we’re flying back to Los Angeles in a couple of months to meet our brother and sister-in-law’s first daughter… We’re hoping our new way of living means we never have to choose between showing up for family and being self-supporting again!

Have you ever paid cash for a car? Would you even want to? Why or why not?

Battening Down the Hatches, Y’all

We received a letter this week from Mr. Vega’s employer, regarding medical benefit options in light of their upcoming corporate merger. There is quite a bit of uncertainty regarding how coverage will be handled, and they’ve made it clear that there will be employment redundancies. The bottom of the letter contained this lovely tidbit:

* If you are terminated, you may have rights to continue your FSA through “COBRA” (which we’ll explain more about if that becomes necessary), but you’ll do that on an after-tax basis, which is not advantageous for most.

This is the point in our program where we prepare for the worst, while continuing to hope for the best. All expenses must be questioned, and all unnecessary spending gets put on “pause” until our financial skies are clear again. Waiting to make changes until after a job loss could be devastating for us, both financially and emotionally: we could weather a transition much more gracefully if we were already prepared for it, rather than trying to make drastic lifestyle changes while also dealing with the psychological trauma that can accompany the loss of a job.

Fortuitously, I spent some time the other day creating a menu plan for November. I took my inspiration from The Prudent Homemaker, a full-time wife and homeschooling mother of seven children, who used their food storage as the basis for keeping her family cared-for during her husband’s eight-month period of unemployment. Using her seasonal menu as a template, and making adjustments for our smaller household, dietary preferences, and busy schedules, I put together a month-long plan for eating delicious and healthy meals that are also lower-cost. An unexpected benefit of meal planning is that it gets us out of our ruts, and reminds us to eat a greater variety of food. Left to my own devices, I’d eat Trader Joe’s whole wheat cinnamon rolls and a latte every. single. morning. But there’s a whole world of breakfast food out there, and writing it all down helps me remember how much I also love fresh fruit and Greek yogurt, oatmeal pancakes, and eggs scrambled ever so slowly.

As timing would have it, Mr. Vega’s 1991 Honda CR-X has reached the point where the annual repair costs are more than the value of the car itself. After running the numbers and weighing the pros and cons, we’ve decided to purchase a newer used vehicle. Counterintuitive as it may seem, we have enough in savings, and we’d rather buy a reliable car now than continue to pay for unforeseen repairs during a potential period of unemployment. And let’s face it, job interviews are stressful enough without worrying about whether your car will start to get you there, or having your air conditioning give up the ghost when it’s 90 degrees out!

Ironically, we do most of our shopping in anticipation of lean times, as that’s when we feel the need to stock up, in case we won’t be able to later. I dislike shopping so much that I generally don’t replace my clothes until they are threadbare, but I may look to upgrade my wardrobe a bit in the light of this merger uncertainty. I currently have just one pair of shoes that I wear for work, and I’d prefer to shop the sales now, rather than scrambling to get something cheap-but-appropriate if these give out during a time of hardship. This is also as good a time as any to start planning our spring garden so that we’ll be ready to plant our balcony container garden when the time comes. Fresh, homegrown food is lovely whatever one’s circumstances, but it’s especially wonderful to be able to get food from your garden instead of the market when money’s tight.

Because the merger threatens to leave us with reduced benefits even if we do keep the job, we’ll be sure to attend to our medical needs before the end of the year. We want to have healthy bodies, strong teeth, and brand-new pairs of eyeglasses that have been covered by insurance. One of us could use a new set of orthotics, as well. These are the sorts of things we should be doing anyway, but this new sense of urgency will make sure that we do.

Mr. Vega will indeed be updating his resume and LinkedIn profile and seeing what his options are, sooner rather than later. If his company’s merger results in widespread layoffs, the market will be flooded with folks looking for work, and we want to get the jump on the rest of the talent pool.  And because our household functions as a cooperative whole, it’s job-search time for everybody around here. So, while I do enjoy my part-time and freelance work, I also have two interviews scheduled this month for full-time positions that come with the all-important Benefits Package. Landing one of those would allow my husband to widen his job search to include less traditional opportunities, without worrying that we’d be left without medical coverage.

We’ll also be making a greater effort to keep up with our still-forming social and professional networks. We view “networking” as a way to cultivate and deepen authentic relationships, rather than as strictly transactional contact, and so it’s important to us that we spend some time with folks now, and not wait until we’re in need. Whether those connections result in professional opportunities or not, a robust social life will go a long way toward easing the stress of unemployment, if it happens.

We are very lucky to have moved to a city with so much free and inexpensive fun. There’s almost never a cover charge for live music (and when there is, it is oh-so-worth-it), there are plenty of festivals and activities happening all the time everywhere around here, so it will be easy to keep our spirits up and hang out with our new friends at bargain basement prices. We’ve got a couple of social buying vouchers hanging around for inexpensive dinners and movie nights, and we’re looking forward to hosting some game nights at home, as well. It’s good to have a little fun once in a while, especially during periods of increased stress or uncertainty.

We were already planning on keeping things low-key this year, but we’re still going to need to rethink the holidays. We generally do home-made, consumable gifts for everyone in our fairly large family and closest circle of friends, but this year’s gift idea is a bit pricier than usual. Not crazy expensive, but when you’re giving to a couple dozen people, it adds up quickly! We’re going to have to reconsider our gifting, and perhaps just send cards to everyone but family. We do feel blessed to have people around us who aren’t likely to feel slighted, though… material things mean much less to our loved ones– and to us!– than the actual relationships. A card means as much to all of us as a gift… especially if the giver is on a budget!

Closer to home, our own first holiday season in Austin will be spent exploring the city’s decorations, giving some of our time to help people who are currently less fortunate than we are, enjoying homemade seasonal goodies and free holiday movies, and video chatting with our faraway loved ones.

Once the merger has come and gone, we’ll be able to breathe our sighs of relief, and return to business as usual around here. If the layoffs don’t come, we might find ourselves on the other side of this with more stable, higher-paying jobs, closer relationships within our community, in better health, and with some more money in the bank. Sacrificing just a little comfort and convenience now, when we can afford to, seems like a small price to pay in exchange for the security of knowing that we could take care of ourselves in the event of a job loss.

How have you “battened down the hatches” when faced with uncertainty in the workplace or periods of unemployment? 

How to Start Living Below Your Means

I’m sick today. If I didn’t speak for a living, I could probably still go to work, but I’ve got laryngitis, so I am out of commission. Trouble is, as an hourly employee and freelancer, “no work” means “no pay.” The good news is, Mr. Vega and I have the great good fortune of a fully funded (3-6 months of living expenses) emergency fund, and have gotten the hang of living below our means, so we probably won’t need to dip into savings to cover a few days of lost work.

But it wasn’t always like this. Most of my work has come without paid sick time or vacation days, and before I learned to live modestly, even one sick day could create a financial crisis. Never mind “paycheck-to-paycheck,” I lived “credit card bill-to-credit card bill” for a decade, and viewed due dates as mere suggestions, racking up late fees and ruining my credit, while still getting $100 spa treatments on a regular basis. If I heard the suggestion during those years to live within or below my means, it didn’t register, because I wouldn’t have even known where to start.

It’s been eight years since I found myself living in a small, sad apartment, staring at thousands of dollars in credit card and tax debt, alongside statements for hefty paychecks, wondering how I could have earned such a high hourly rate for so long and have nothing to show for it. Less than nothing, actually, because I had a negative net worth!

Something happened in that lonely apartment, and before I knew it, I was canceling credit cards, filing amended tax returns in search of deductions that had been overlooked in my sloppy record-keeping, and trying out slow-cooker recipes to lower my food costs. I ignored my health and my relationships in order to work as much as I possibly could to get the debt paid. My intense focus got me debt-free within a year, but two years after that, I found myself with a $6,000 credit card bill, and a $20,000 car loan. I had learned how to pay off debt, but not how to avoid it in the first place. I hadn’t learned to budget, and I not learned to live below my means.

My first attempts at budgeting failed miserably, because I based them on templates that had little to do with my actual spending habits. As a single woman living in Los Angeles, I spent more than the national average on rent and transportation, but nothing on child care. Grocery expenses were low, restaurant spending was high, and visits to the hair salon were (and still are) non-negotiable. I came to understand that each of us is unique, and our earning, spending and savings will reflect that. What’s more, even one’s own budget will not remain a perfect fit year in and year out, or from one month to the next. Life changes quickly, and we have to change with it. I learned that if you’re ever going to get a handle on this money thing, you have to write down everything you spend. This is a requirement for success, but I struggled with it terribly until I discovered Mint (with whom I am not affiliated, and from whom I have received no compensation), which made it easy for me to see where the money was coming from and where it was going, so that I could begin to make changes based on what was actually happening.

With the whole ugly truth laid out in front of me, the first thing I did was to stop the most obvious money leaks. These are the areas where economizing is relatively painless: I started buying six-packs of soda at the grocery store and taking drinks to work instead of dropping $1.50 a day into the vending machine. I’d drive around the block looking for street parking instead of mindlessly pulling into the pay lot. My lifestyle didn’t change much, and I was still spending too much money, but I was beginning to wake up to the possibility of doing things differently. Things got much more refined later, but at this early stage, every time I didn’t super-size my order was a win for me.

After I got the hang of easier things, I began to get creative with the less-obvious opportunities for savings. I scoured my auto insurance policy for coverage I didn’t need, checked that my cell phone plan wasn’t more than I needed, and scheduled coffee dates with friends instead of dinners out. It became a game for me, and no savings was too small: the double-loader washing laundromat machine that cost a quarter less than two separate loads, the ten-cent savings at the coffee shop for bringing your own cup (later, of course, I switched to brewing my own coffee), the grocery store that offered a nickel credit for bringing your own bag…. I began to enjoy finding some sort of savings everywhere I went. After all, pennies add up to dollars, eventually.

Another major step in my financial awakening was beginning to declutter. I thought selling some of my no-longer-used things might be a good way to create more space in my home and in my budget. It was quite a shock to learn that I couldn’t expect to receive even half of what I had paid for most things, even if they had never been used! The exercise of decluttering and downsizing my possessions made me keenly aware of the purchases I made going forward. I have since cultivated a practice of buying less, buying for life when I can, and doing my level best to avoid retail prices everywhere else.

When I had just about reached the limits of minimizing my expenses within the life I was living, it became time for me to make a big move. For me, this first meant cutting cable and killing my TV, and later, moving in with a roommate to reduce my rent by $400 a month. And while it seems counterintuitive to not have begun with these things, baby-stepping my way up the ladder of frugality allowed me to garner small wins and develop an experiential conviction that larger sacrifices would be worth the effort. And they definitely were.

With my expenses cut as deeply as I could manage, my next task was to learn to earn more, which was by far the riskiest thing I did, as it involved working less, and taking a few chances with my schedule of part-time jobs and freelance work. But because I had finally paid off all my debt (again!), and brought my expenses more in line with my earnings, I could afford the gamble. The graphs and trends on Mint helped me realize that the job I deemed most stable, but that also caused me the most stress, accounted for only 10% of my annual income. With some trepidation, I left that job and increased my availability with the employer who was less stable, but paid much more. As last-minute freelance assignments come with a 20% premium, I held off on booking lower-paying work in advance, in the hopes that the higher-paying, same-day assignments would be plentiful enough to meet my needs. And I spoke up: when a new manager came on board at the freelance agency, I told him honestly that although the agency was one of my favorite employers, I frequently declined work there in favor of higher-paying jobs. Within the month, I was offered a rate commensurate with what I earned elsewhere. By choosing my assignments carefully, and giving highest priority to the highest-paying jobs, I was able to increase my income and reduce my workload.

Rinse and Repeat. By the time I had found so many ways to reduce my daily expenses, had brought down a few of the big ones, and learned to make more money in less time, life had changed enough that going back to the beginning seemed like a good idea. I had met and married my husband, and we began budgeting together early on in our dating relationship. “My goals” had been modified and expanded to become “Our goals,” which included saving for a house, and while the household income had doubled, regular expenses had not (two may not live quite as cheaply as one, but happily, the cost of running a household doesn’t double when its occupancy does). Eating a nearly meat- and alcohol-free diet didn’t work so well for my husband, so grocery expenses were higher, but cooking and eating at home was more fun with a companion, and so the restaurant budget shrank. And since we moved from California to Texas, we’re spending less on gasoline, but more on mosquito repellant!

Perhaps the biggest lesson I’ve learned on the path to living below our means is that you’ve got to have fun doing it. Brown-bagging my lunch means I get to eat healthier, more interesting meals every day, and still have enough money to get my hair done every other month, without having a minor panic attack when it comes time to pay. Losing my loyalty to name-brand products made by companies who aren’t concerned with my well-being means that I can fill our fridge without draining our bank accounts. Finding free fun on weekends lets us enjoy life while saving for a house. And taking a few calculated risks in order to earn more money allows me to stay home and write when I’m sick without fear that the lights will get turned off next month because of it.

Is living within or below your means important to you? What changes have you made, or would you consider making, to do it?