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I don’t try to hide the fact that we used to be pretty sucky with our finances. Although we never let things get too out of hand, I finally accept the fact that we used to waste most of our income. We bought stuff. We went on trips. If we didn’t have the cash, we would finance anything that we desired. Even furniture. And vacuums. I swear.
We also lived without any sort of budget. Unfortunately, this meant spending without limits until the next payday came along. Since we have relatively high incomes, it never seemed like much of a problem. But, we’re not stupid people. I think we knew deep down that we weren’t reaching our potential. We had our heads stuck in the sand and were caught in the typical middle class trap of going to work, buying stuff, then working more to buy more stuff.
Luckily, getting pregnant with our second child finally made us snap. The new responsibility made us realize that our future was being squandered on outrageous grocery spending, credit card debt repayment, and a plethora of unnecessary purchases. We knew we had to change.
One of the first steps we made toward financial freedom was to create a zero sum budget. Our new budget was merely the beginning of a series of positive changes. In fact, we made a lot of changes within a short time frame. In addition to drastically cutting our spending, we gradually changed many of our destructive habits as well. And as we all know, changing old habits can be a long and painful process. However, I am convinced that the new habits we adopted completely transformed our financial future. Here are the 5 financial habits that changed our lives:
We stopped watching TV. Cutting our cable television bill was awesome for our budget. Doing so freed up an additional $90 per month to use toward debt repayment. We also found ourselves with a lot more time to do productive things. We even started a blog, which ultimately led to the fact that I am now self-employed. Had we continued paying for cable television, I would probably still be watching Real Housewives marathons on Bravo and wishing that I could find a way out of my 9-5 job.
I stopped caring what people thought. I stopped giving into peer pressure. I stopped feeling bad for not buying an extravagant present for every relative’s birthday or for not going to every expensive event I was invited to. I started putting our family first and the wants and needs of everyone else a distant second, third, or even last if needed.
We made savings a priority. Instead of hoping to save something at the end of the month, we started saving first and living off the rest. This way, money that was supposed to be saved wasn’t wasted due to poor planning. Since we became debt free, our savings rate has grown dramatically – to a rate of around 50 %.
We stopped living in denial. Creating and sticking to a budget made us take a hard look at our choices every week and month. It forced us to confront our past mistakes and made us want to do better. Coming to terms with reality helped us transform into the responsible and goal-oriented adults that we are now.
We became proactive. We stopped waiting for opportunities to present themselves. We started chasing them instead. We realized that no one was going to knock on our door and hand us what we wanted. We started working for it.
Making huge life changes takes hard work, and improving our lives meant acknowledging our own shortcomings. It sucked, but I’m so glad that we took the steps to start getting closer to our full potential. And it’s not over yet – we’re still trying to improve our lives, financially and otherwise. I hope to never stop learning and growing, and I plan on continuing to implement positive changes until I evolve into the person I was meant to be.
So, how about you? What habits are you trying to change? What changes have you made for the better?