So when I wrote about 15 Great Strategies to Survive on a Low-Income Budget, I had to research personal finance and think hard about how we could survive when we were starting here in Canada. I had a goal in mind to better manage our finances. Don’t we all want to be debt-free and be able to get out of the paycheck-to-paycheck lifestyle?
It has been four months since I wrote that post, and since then, I have been more interested in personal finance than ever before. I am so curious that, at times, I would look at online colleges and universities and dream about pursuing a financial degree and maybe I can also become a financial blogger in the future. However, I keep pushing it off the back of my head because I know it may hinder us from achieving the financial freedom I so desire.
This post will hopefully help you if you are also starting this frugal and financial freedom journey. I also want to be able to write this blog post to keep myself in check, and have some accountability, have something to look back at – to measure our progress and hopefully fewer failures if inevitable.
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What we did as a couple to plan out our financial freedom
My husband and I talk about money more comfortably now than we did during the first five years of our marriage. He trusts me enough to handle our finances, even his income, but we still make big decisions together. I constantly update him and provide him with spreadsheets of our finances, usually every quarter, so he knows where we stand. If that makes sense, I am the CFO, and we are more co-CEOs together. Here’s what we have done so far.
Talk about our goals and dreams for the future.
We discussed our financial situation and brainstormed how to achieve our financial goals. We talked about how we now have a better income than before and what we could do to make our revenues work. We assessed our current debts and how we plan to eliminate them in the coming years. We have improved our credit score in the last four months but will still need to work on the income-to-debt ratio. We are almost halfway through our car financing, which by God’s grace, we hope to be able to pay off earlier than scheduled, but for now, we will focus on paying off debts for home improvement.
Create a values-based budget that works for both of us
We have learned that a budget does not have to be too restrictive. It can be flexible according to what you value most as a family, and as long as you stick to it, it can work for you. Bernadette Joy says, “Spend unapologetically in what you love.” Hubby and I decided on a budget that gave us some leeway because we both enjoy our lives and value great experiences with our kids.
We have been able to stay on track with our budget for the most part, but there are still some months where we go over a little bit. I have learned that it is okay to be flexible with your budget as long as you can get back on track the following month.
Cut expenses and live a more frugal lifestyle.
The main culprit in our significant expenses is groceries, especially Costco! I swear whenever I go there, I spend more than $100 because I keep seeing things that are on sale and seem helpful. Still, I have this habit of overbuying that I have been training myself to stop—for example, buying body soap or toilet paper because it is on sale even if we still have some stock at home. I blame the scarcity mindset for this, and I promised my husband that we would only buy what we needed based on our list.
Though, I have seen great improvement from both of us when it comes to spending on ourselves. I only almost always shop thrift or second-hand clothes now, and I have stopped buying handbags and shoes because I don’t need a lot anyway, and the ones I already have were bought intentionally. As for my husband, while I think that sport shoes are a luxury because they are costly, I understand that he likes them and use them a lot, so I make sure to put them on budget. I noticed that he has been more cautious and picky lately, and as such, he has not been buying stuff.
Overall, we have been living frugally over the years that we are on board with this matter. It is just a matter of not over-buying needs and wants on household expenses.
Invest money wisely and make sure it grows over time
Contrary to pursuing investment, we have started finishing our basement even though it is funded from a line of credit. We still look at it as an investment, though, as we are improving our home value and appreciation over time, and we already have a plan to pay out as quickly as possible.
At this time, we are on our baby steps to save $1000 for a contingency fund. We started our insured retirement plans in early 2021 and have increased our amounts for RRSP, which we have allocated in investment portfolios I have still yet to study. We are taking advantage of company match RRSPs to fund our retirement, and I recommend you check out if your company offers the same because this is free money! We have started saving for our eldest’s college education and are happy to report that we have held close to CAD 10,000 since the last quarter of 2019.
Give back, help and share.
We all have needs. We believe as a couple that financial blessings come from God, and this is something we also value. We aim to give back and help whenever we can. Giving doesn’t always mean we have to be giving financially, but we think about ways we can help out through our talents and strengths. We are also teaching our kids the importance of giving back early because this will benefit them for a lifetime.
Stay disciplined with your spending, and don’t go back to your old ways.
The key to financial success is always discipline. It is effortless to spend money, but saving and growing your money takes a lot of effort and time. I have seen people who can change their spending habits and become more frugal but return to their old ways after some time. We ensure that we are always mindful of our spending and continue to find ways to save money.
What to take from this
We started our journey to financial freedom a little over two years ago and have seen quite an improvement in that time. Our strategies vary depending on what works for us, but there are some basic tenets we follow:
- Live frugally.
- Save regularly.
- Invest in ourselves and our future.
- Stay disciplined with our spending.
What has worked well for us may not work for everyone, but I can tell you that it is possible to make significant progress in a short amount of time. We’re excited to see where the next few years will take us and continue working towards our debt-free goal.
Thank you for taking the time to read this post! I hope it was helpful in some way. If you have any questions or suggestions, please feel free to comment below. 🙂
Thanks for following along! Take care!