For years, we spent money without thinking about where it was going. Here is the story of our budget awakening and how it pointed us toward financial peace.Have you ever said to yourself, “Dude, where in the heck is all my money going?” Trust me, you’re not alone.

In the life of almost every saver, at least every born-again saver, there comes a point when you have to hit rock bottom. Our life has been no different.

Our budget awakening happened in February 2011. At the time, we had been married for five years and made a fairly nice living. We had one child with another on the way. Things should have been going great for us financially, but we seemed to be spinning our wheels. Although we were saving for retirement at a rate of about 10%, we were making minimum payments on our house, cars, and putting nothing away into our savings accounts. We needed to be saving more money.

Our Budget History

Before we got married, I found myself in a little bit of credit card debt. Nothing too bad, mind you. I just owed a couple of thousand dollars on credit cards, but I was only making the minimum payments toward them. At that rate, I was never going to pay them off – literally.

Seeing this as an issue, my future wife wisely instructed me to refinance my credit card debt. So, I took all of my credit cards, moved their balances to a balance transfer card with 0% interest, and we started hammering away at them. Within 6 months, we had the debt paid off and our financial future was looking bright.

Hot Tip: To use this strategy yourself, try the Chase Slate® card. It’s the only card we know of with an introductory 0% APR for 15 months AND no balance transfer fees for the first 60 days! So, as long as you pay it off within 15 months, you really are getting to use their money for free.

Once we got married, we also had a very nice financial head start. During the first year of our marriage, we were able to live – essentially – without any bills. We lived for free in an apartment provided by my work. We didn’t have a cable bill, a car payment, or even electric or gas bills. Essentially, all we had to pay for was our food, gasoline, and entertainment. It was a good thing too because we were living off a combined salary of under $40,000. However, with a little bit of restraint and pretty good foresight, we were able to save almost $18,000. That gave us the kick-start we needed to buy our first house, followed by the purchase of our first rental a few months later.

Things were going great, but we didn’t follow through. We’d done a lot of things right, but in other ways, we were blowing it.

Fast forward four years to 2011. While our annual household income had more than doubled, we had only managed to save an additional $10,000 – which was sitting in a CD earning less than 1% interest. Sure, we now had a child, a house, two new cars, and satellite television. But, we were making way too much money not to be saving some of what we earned. What the heck were we doing wrong?

How We Fixed Our Finances

The first thing we did was to get on the same page as a couple. We started watching where every penny of our money was being spent. Luckily, we’ve always been thrifty at heart, so this wasn’t a major chore. We had simply lost our way.

We began holding ourselves and each other accountable for our spending habits. To do this, all it took was to take out a piece of paper and write down a zero-sum budget. Our budget focused our attention on where our money was being spent. Simply writing down what we intended on spending made us think twice before committing to any purchase. Before we knew it, money began to appear from everywhere and saving became simple.

We continued on our path toward financial freedom by clipping coupons, cutting unnecessary wants out of our budget, and refinancing our houses.  Within a year, we had saved another $12,000 – all while having a second child, going on vacations, and living happily. It took budgeting, discipline, and a little luck, but it hasn’t really been that hard…and we still aren’t sure where all of that money went!

The Tools You Need

If you find yourself in a similar situation, there is hope. Whether your deep in debt or just can’t figure out where all of your money is going, there is a way out. Here are some of the tools you’ll need to whip your finances into shape right away!

  1. Budget – Your budget is the most important financial tool that you have at your disposal. It’s nothing more than your financial plan for the month, but it is the key to controlling your money. Once you learn how to budget, your life will change forever. We’ve created a detailed guide on creating a budget that works. Just follow the steps, and you’ll be on your way to achieving the financial freedom you crave. Find our step-by-step guide to budgeting here.
  2. Expense Tracker – Tracking your spending is the best way to really understand how your spending is standing between you and your goals. It isn’t hard to track. All it takes is a pen and paper. Jot down everything you spend for a month, total it up, and prepare to be shocked by the results. To make tracking even easier, check out Personal Capital’s free expense tracking app. This thing makes tracking super simple. They’ve also got a great free app to track your net worth as well. We use it, we love it, and we think you will too. Learn more about Personal Capital’s free financial software here.
  3. Patience and Perseverance – You didn’t get to where you are overnight, nor is your situation going to change in an instant. You need to apply good financial principles to your life right away, but you also have to persevere and keep at it. Yes, there are times when you are going to struggle. Yes, there will be times when you want to quit. Don’t. Stay focused on your goals, stick to your budget, and keep coming back here for encouragement! You will succeed, and it is going to feel great.

Where We are Now

We made the decision that we wanted to be debt free by the time we turn 40. From the belly of our debt free dream, this website was born.

It’s been about four years since we started this blog. In the meantime, we have made it. We’ve worked our budget to become debt free (except for the house)…but that’s not all. Destroying our debt has allowed us to do things we never thought possible. Because we don’t owe any money, we’ve experienced financial freedom beyond our wildest dreams. We’ve been able to:

  • Quit our well-paying day jobs
  • Turned our blog into a business
  • Traveled to more than 12 countries and taken nearly as many trips around the U.S.
  • Learned to live life on our own terms

If this is your first visit to Club Thrifty, welcome! We hope to share with you our successes, and our failures. We hope to inspire you to take control of your life by becoming debt free. We  are thrilled that you’re here and invite you to join us on this journey. So, belly up to the computer, grab a fruity drink, and join the Club Thrifty party!

Thanks again for joining us!  We hope this site is as useful for you as it is fun for us to write.  Please share your story by commenting below.