The Importance of Creating an Emergency Fund

So, you want to get out of debt and give your family a brighter future.

Congratulations! That’s fantastic!

Realizing that changes need to be made in your financial picture is the first step towards freedom. Unfortunately, now is also the time that many people think, “I’d love to do that, but there is just no way!”

I know this feeling quite well. I’ve been there. I remember when I thought there was no possible way to do anything any differently when my husband brought up trying to pay off debt 12 years ago. And I was right. If I was caught up in living like the Jones’ (and I was), then there wasn’t any hope when it came to paying off debt.

After a lot of patience on his part, I started to think that things could be different in 2016. I learned about the Dave Ramsey plan, and started applying it. Now, we are “Dave-ish,” and don’t follow his program to a T. We have worked on creating our own “program” which works for us.

Early on in our journey, I learned that an emergency fund was so important. If an emergency fund isn’t in place, then you are likely to go right back into debt when a big need arises.

An emergency fund gives us wives and mamas a sense of security. It honestly helps me sleep better at night. Sure, I could claim to “depend on God” when we didn’t have savings due to spending money unwisely, but it is so much better to actually be a good steward of the money He has given us. This year the income I personally make from my Etsy shop has decreased tenfold. I make outfits for special occasions, and a lot of those have been cancelled this year. Our emergency fund has definitely helped my peace of mind.

Sometimes sacrifices need to be made in order to get your emergency fund started. Sell items around the house on eBay. Cut back your grocery budget. Ask your husband to pick up extra shifts at work if he can. Little by little, treat savings as a “bill” that you have to pay to yourself.

Before you know it, your fund will begin to build!

The amount of money that you need to have in your emergency fund will vary depending on your circumstances. It should be a safety net that would be able to cover most emergency needs when they arrive. I personally don’t believe $1,000 is enough. When deciding what to initially save, take into account things like insurance deductibles, medical needs, and the age of your home and car.

Your emergency fund needs to be in a separate account that you do not have access to. Seriously, pretty much forget it isn’t there if you are tempted to spend it.

And then if you need it, it will be there!

Our emergency fund has fluctuated depending on our needs. When we didn’t have a mortgage payment to worry about, it was lower than it is today.

I’d love to encourage you to take a small step towards saving today. It can be such a blessing to your husband to take an interest in your family’s finances. You can do it, ladies!

Getting Out of Debt and Building Wealth Takes Time

Getting out of debt and building wealth takes time. Don’t get discouraged and celebrate small wins along the way.

We have been on our debt free journey for close to five years now. Sometimes I’ve gotten so discouraged about the time it has taken to reach our goals.

Can anyone else relate? Wouldn’t it be nice if we could push a button and all of our problems be solved?

Fortunately for us, life doesn’t work that way. When we dedicate ourselves to working on a goal like debt and financial freedom, the small tasks we do to get there create habits that can last a lifetime.

We need these habits to continue on! Whether it be paying down debt consistently, paying yourself first, or saying no to extras for a time. Once we’ve worked on our “habit muscles,” we’ve done what we need to do to see our goals come to fruition.

Sometimes this is hard for me since I’m far from being the main breadwinner in our family. But that’s okay. Being a stay at home mom for my kiddos is my calling! When I get discouraged, I try to think of the small, actionable steps I can take to help my family’s finances.

Some examples are:

Working diligently on our budget.

-Transfer money to savings first thing on payday.

-Shop for deals and use sites like Ibotta.

-Invest my Etsy income.

-Learn about and play an active role in the allocation of my husband’s retirement accounts.

-Spend time looking for deals when it comes time to purchase big ticket items.

Being a frugal and knowledgeable stay at home mom can help your family’s financial future.

Be on the lookout for a fun freebie here on Monday. I hope everyone has a wonderful weekend!

Life and Financial Update ||May 2021

Hey friends, it’s been awhile! Life has been crazy since early 2020, as I’m sure you are well aware. I thought I’d pop in to give you guys a life and financial update since we paid off our cabin in late 2019.

Ah, paying off our cabin was amazing. We felt so free! But after the pandemic hit and a realization that we were not able to be as self sufficient as we had hoped to be there, we purchased another home in May 2020. It was a fixer upper on five acres, and was basically the cheapest thing on the market that fit what we were looking for.

We started to pour money into renovations, and unfortunately we are not finished yet. It is a bummer to have a mortgage, but at least it has a low interest rate. We are are slowing down for the time being with upgrades for now though, because we need to begin saving more again. This is so very important for me.

In the past year we have started (and fully funded) a car fund, which is much needed. I hope our van holds on for a little while longer though. We’ve owned it for nearly ten years and it has nearly 220,000 miles on it. It has been absolutely excellent for our family. I hate spending money on depreciating items, so hopefully it will hold on for at least another year!

We are also still holding onto our cabin as an asset. We love it, and the value has skyrocketed! Our neighbor’s home is under contract for $400,000 (after one day on the market), and we purchased our home for $200,000 nearly two years ago. We are very pleased with this investment.

I’ve also challenged myself to put all profits from my Etsy shop into ETFs for the next few months. I did this last month, and it’s been fun to see the account grow. I am using an Ally Invest account for this purpose, and am sticking with ETFs that track the S & P 500.

Although I am by no means the breadwinner in our family, I love seeing what I can do to help the family’s finances by budgeting, being frugal, contributing to our financial discussion, learning about investments, and investing what I can outside of my husband’s 401k and IRA. I hope that we are changing our family tree and will be able to wildly give to others one day.

Thanks for stopping by today. Hopefully I will share more here soon.

You Can Only Fix a Financial Problem by Fixing Yourself

When I first read this quote by Nancy Levin, I found myself nodding in agreement. I mean, how true is this?

Looking back, I spent a lot of years blaming our financial situation on the economy and other outside circumstances besides myself. Not that I thought our finances were in “bad shape” at the time. No, we were perfectly “normal” and were living life just like everyone else we knew.

For a long time, I didn’t realize there was anything inside of myself to fix. But oh, there was. I was comparing myself to others and I wanted to make sure my children had the same experiences as their friends. Nevermind the fact that we were in our twenties and had to use a credit card to fund all of these extras. Our net worth was non-existent. Our finances were a mess, and I didn’t even know it.

I needed to fix myself in a big way. I don’t want to give all of the credit to myself, though. I know God was behind the scenes leading me along.

I would like to share a few mindsets that needed to be “fixed” before our finances started looking up. If you are facing the same issues, a big hug to you!

  • The “I Deserve It” Mentality. Oh, boy. There have been so many times I purchased things I haven’t needed because I thought I deserved them. Ladies, I was robbing my future when I did this! That excess food and clothing was not worth the hit our bank account took.
  • The Victim Mentality. This mentality kind of goes hand in hand with the “I Deserve It” mentality. Life hasn’t always been kind to me. When it wasn’t kind, what did I feel like I needed to do? Shop. I thought shopping lessened the hard knocks in life. But all I was doing was avoiding the real problem and prolonging my pain.
  • The “I Can’t Do Anything Differently” Mentality. Oh my, I held on to this mentality for way too long. For years, I really didn’t think I could do anything differently. I looked around me, and we appeared to be in the norm. What could we do differently? The thought of changing my lifestyle was so unthinkable I told myself there was absolutely nothing I could do to change our financial trajectory.

How to Let Go of These Limiting Mindsets

I think the first thing that must be done to let go of these mindsets is to recognize them for what they are. Limiting. They limit our true potential and hold us back from living a life of financial freedom.

I personally had to stop worrying about what others thought of me. And the funny thing is, I highly doubt others thought about me nearly as much as I thought they did, ha!

I had to really think through the goals I had for my family. I had to think about the legacy I wanted to leave. Were my old financial habits going to leave a good legacy to my family? Absolutely not! I had to make a plan to change, and follow though even when it was hard.

I had to learn how to budget. I had to learn how to prioritize spending. I had to learn so much, y’all. I’m still definitely a work in progress but I’m so grateful for the progress I’ve made.

This Savvy Cents Wallet is a great budgeting tool!

Have you had to change your mindset while pursuing financial freedom? If so, please share. I’d love to hear from you!

This post contains affiliate links at no cost to you.

Five Smart Ways to Spend Your Tax Refund

April is here, and do you know what that means? It’s tax return season! I’m so excited for you guys who are receiving a refund! But wait just a second before you rush out and spend that refund on new furniture or a big screen TV. You have a real opportunity here to boost your financial situation. Imagine what peace that would bring!

I would love to share a few ideas for you to consider spending your tax refund on. These items will really help you get where you want to go in life!

  1. Get current on your bills. Ladies, here’s your chance! If you are not current on your bills, use your refund to make them current ASAP. The security you will feel is priceless!
  2. Fund your emergency fund. If you follow Dave Ramsey’s principles, you probably are familiar with the $1,000 baby emergency fund he advocates for. While getting out of debt, this fund will help you not accumulate even more debt. This will help you reach your goals so much faster! We currently use Ally Bank to house our emergency fund, and their APR is now at 2.20%.
  3. Pay down your debt. Whether you use the debt snowball (paying your debts from smallest to largest) or the debt avalanche (paying your debts from highest to smallest interest rate) method, deciding to use your tax refund to pay your debts is a huge investment in yourself! You want your money to be earning money, not the other way around. If you are out of consumer and student loan debt, attack that mortgage!
  4. Stop the paycheck to paycheck cycle. You have got a fabulous opportunity here! Would you like to stop living the paycheck to paycheck life? Use your tax refund to pay for next months obligations. Before you know it you will be a month ahead, and living paycheck to paycheck will be a thing of the past.
  5. Invest. First of all, I’m not a financial advisor, and doing your own research if deciding to invest is crucial. But wouldn’t you like your money to start earning you money? Yes! Sending your tax refund to an investment account will likely do that if you give it time to grow and you do your reasearch. I’m partial to low fee mutual funds and ETFs. The Simple Path to Wealth is a must read in my opinion when it comes to investing.

So, there you have it! What are you planning to spend your tax refund on? We sent a chunk to our mortgage, and replenished our emergency fund after repairing a driveway flooding issue.

I hope your week has been fabulous so far!

This post includes affiliate links at no cost to you.

How to Win with Your Finances

This morning I was really encouraged by an Instagram post from Ramsey Solutions, and I wanted to share a few thoughts with you guys. The post read, “Success is not one big splash. You win with excellence in the ordinary. Do the right thing, the right way, everyday.”

Boy, isn’t this the truth? Personal finance, if done the right way, is rather boring. It consists of thousands of tiny right choices that build upon each other.

To get our finances in order we don’t need to be perfect, but consistent. I mess up sometimes. For example, over the weekend we attended a craft fair and I spent nearly $30 on Palmetto Moon hair bows for my little girls. Nearly $30! I walked in thinking my max spending budget would be around $10. At least I walked away from that adorable $40 birdhouse, ha!

While I am disappointed in my moment of emotional overspending, we are doing okay overall because we are making the right financial choices at least 95% of the time. It seems ordinary and boring. Buying hair bows or whatever else sits on the store shelves is much more fun and exciting…in the moment.

“Excellence in the ordinary” takes both a plan and a deep desire to see a financial turnaround to execute properly. I normally do not buy $30 worth of hair bows because I know little sacrifices now will help us reach our overarching goal of paying off our house and reaching financial independence in other ways.

I would love to encourage you to start taking small steps today. And then do it again tomorrow. And the next day. Before you know it, healthy financial habits have been created, and you will be winning with money!

Sick and Tired of Being Sick and Tired – Part 1

Since I just started this new blog, I thought I would share a bit of my background. Growing up, I was not financially literate. At all. While I knew my mother liked to budget and needs always seemed to be met as a child, I was never taught the nuts and bolts of it. My father did spend some time talking about how to use credit cards, but that was about it.

Young and married at 19, I started racking up credit card debt. I thought credit cards were the means to get where you want to be. I became a widow at age 22, and the cards were paid off using money from survivors benefits.

I learned that being in debt wasn’t ideal, but as a single mom to three young children ages 3, 2, and newborn I found myself back there quick, fast, and in a hurry. I remarried at age 24, and finances started looking up.

Then came the market crash of 2008. Our home that we purchased for $150,000? Now worth half of that. We were stuck in a neighborhood where one evening large booms had us scrambling to our window. Low and behold, a SWAT team was standing in our front yard as a meth lab across the street was raided. Yep, this home was purchased by a very under qualified buyer, like the many who caused the recession in the first place.

Our neighborhood was riddled with foreclosures. At this time I was just thankful my husband hadn’t lost his job. Many people we knew had, including both of our parents. This is when I began my Etsy Store making clothing for little girls. Unbelievably, there was still a market for it.

In 2013, we were finally able to get out of our house. We still owed $100,000, and had a contract on it for $120,000. It only appraised for $115,000, so we had to lower the purchase price. We lost so much money on this house, but it could have been much worse. At the time I was desperate to leave our half-vacant neighborhood and felt like our now six children deserved better. It wouldn’t be long before I realized my entitlement mentality was way out of line as we stepped into a house with a $800 utility bill during the summer!

I will be sharing more of our story soon. In the meantime, please take a look at Dave Ramsey’s book, The Total Money Makeover. It gave me hope and a road map to follow in 2016 when I was “sick and tired of being sick and tired.”

Read Part 2 of our story here.

This post may include affiliate links.

Welcome to the Blog!

Hello, and welcome to Finance and Frugality. My name is Nicole, and I’m a 38 year old wife and mama to eight children. I started this page for both accountability and to offer encouragement. Our family began the Dave Ramsey plan in November 2016, and have since lowered our debt burden from $293,000 to $141,397. (We are now working on paying off our mortgage!)

To accomplish this goal, we sold our home and moved to a new state. We have drastically cut our lifestyle in the process. Becoming frugal doesn’t have to be painful. It involves analyzing the things that truly bring value to your life, and concentrating on those.

We still follow most of Dave Ramsey’s principles nowadays, but we also have gleaned wisdom from the FIRE (Financial Independence Retire Early) community. We are always learning, and are now absorbing as much as we can about investing while attacking our mortgage. Finances don’t have to be big and scary. Thank you so much for stopping by!

Thanks for joining me!

Good company in a journey makes the way seem shorter. — Izaak Walton