{ How to Save and Swim at the Same Time }

How do you save or "pay yourself first" and still stay afloat with your bills? Honestly, that was a concept that eluded me for a LONG LONG time. We have been savings poor for most of our adults lives around here and yet, we own a modest home, have two cars that are paid off, and up until three weeks ago, had no credit card debt. We're not too bad off on the face of it.

But here's the reality check below the surface: our mortgage today is only $400 more than rent on our last apartment 10 years ago. We have no car loan today but up until 2 years ago we had always had a car loan and the mortgage. And yet today, we are earning more income than we were even 5 years ago. So, we are making more, with theoretically less debt and yet we still don't have adequate savings. What is that about?

Simply put we have fallen into the trap of the more we make the more we spend. In the last couple of months we had a family meeting and threw all the budget numbers out there and worked the numbers. We are now on board with the "pay ourselves first" concept and will be splitting all the "excess" (read: non essential) money evenly each month between a "locked" savings account (high penalties for early withdrawal before 12 months) and our newly acquired debt. In 12 months the debt will be gone (it's parked at a really low interest rate so I don't mind the finance fees for the short term) and we'll have 3 months of gross income saved.

Here's what we had to sacrifice: We'll only have dinner out once a month. If invited by friends we'll either decline or skip next month...twelve eat outs a year, period. We will only buy clothes we NEED and those new items will be replacing donated items. (Seriously, do I need 16 pairs of shoes when I wear the same three pair 5 days a week? I live in a rural community for goodness sake!) I will take household inventory like I used to do at my old retail shop and only buy necessary items with a list. No new toys or gadgets until the debt is paid off. If we have lived without it this long, a little longer won't hurt. Any new items for our house (because we do need lamps and other items since we've lived with almost no furniture for 5 yeas during the remodel) cannot exceed what is the cash envelope each month for "incidentals". (The smallest of all the envelopes, by the way.) If I LOVE something, it will have to wait until the incidentals envelope is big enough to buy it. The food/grocery thing sort of takes care of itself with our garden and CSA memberships and a stocked freezer of local chicken and beef and our canning. It's a time commitment but we wouldn't go back to processed foods. And the big trick is cash only. We converted back to little envelopes last month and when it's gone it's gone. That has worked relatively well. The only time I had to write a check was for the carpenter who built our new gate. Our lives are more simple now and we want to keep it that way.

Unless we begin to take our future well being more seriously, we will always be treading water when what we really need to be doing is swimming for the shore.