Financial success, to me, is not worrying about money as a scarce resource. It may not be having the most, but simply having enough. Enough to build your best life, whatever that means for you.
Why do I have financial success? What choices (or quirks!) have helped us achieve ‘enough’? How is it that I can leave a career with a six-figure salary and start over with passion projects- and not be at all worried about the money part of doing that?
Ultimately, there are two steps necessary to achieve financial stability. First, loathe debt. Second, always always save. Save may include cash savings, investing, anything that grows wealth instead of drains it. The rest of the rules to financial success are simply the means of achieving these two mandatory rules of financial stability.
The list below is simply a reflection of how I’ve acquired financial success- diminishing debt and growing savings- in my own personal life. Perhaps there’s one here you haven’t considered adopting yet. Take a look and determine whether there’s something from my experience you could layer onto your own strategies to spend less, save more, and achieve financial success in your own life.
What's In This Post
1. Be a snob about your credit, not your grocery store
I don’t mean really be a snob. I just mean if you’re going to care about some label or metric, let it be your squeaky clean credit score. And particularly, don’t let it be shopping at the mainstream beautiful grocery store with lots of lovely displays. And sample days. One of the biggest expenditures for families is for food. Major savings can come from shopping basic.
Basic food shopping means buying simple ingredients and resisting flashy packaged goods, convenience foods, and premium brands. 100 calorie snack packs? You’re paying good money for well-marketed air!
For most of the last 8 years, we’ve shopped 95% of our groceries at Aldi (Thanks, S, for being the first person to walk me into an Aldi!). Are the apples smaller and sometimes bruised? Yes, sometimes. But generally all the food is really the same as any other store. I’ll take a couple bruised apples to spend $500 a month on groceries instead of $1,000. Besides, somebody needs to eat the imperfect product right? (That’s another well-marketed thing you can pay extra for by the way… Don’t. Just shop at the cheap store!)
If you assume we spend $300 less each month on groceries than the average family at the mainstream stores, that is $28,800 saved over the past 8 years. If that’s not the difference between reaching financial success versus continuing to feel cash strapped, then I don’t know what is.
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2. Drive an old car (with irrational pride)
Cars are expensive. And they lose value fast. And they need regular maintenance. And they still break!
I was extremely lucky to receive a six-year old Honda Accord from my parents in high school. That was my good luck in having generous parents. But my choice to keep that car going and drive it without question for the next 11 years… that was grit and determination! That was being thankful for and making the most of my good fortune.
Since that first 11 years with my first car, I’ve only owned two more cars. One was financed for $9,000 as I completed grad school. It was a six year old Mazda capable of safely moving me across the country and getting me to my new job reliably in a much bigger city. Unfortunately, my original Honda was nowhere near up to either of those tasks any longer. RIP. (But I paid that financed car off off in two years.)
My current car is now 15 years old, another old reliable Honda Accord. We bought it from family for $6,000 cash several years ago. I plan to make it run well past 200,000 miles.
Some people like cars. My husband likes cars. My brother likes cars. For me, it’s a natural place to save big bucks. So, this is one of the keys to which I must give credit for being financial successful today. If a car isn’t truly important to you, pay for repairs instead of financing- and drive old cars.
If I had bought a different car every 5 years, let’s say one when I was 25, 30, and 35, things would look a bit different. Let’s say I paid $15K for the first one, then $20K, then $25K… very reasonable, yes? On average, those three purchases would probably cost another $5K in financing over the years. That’s $65,000 spent on cars. If I got 40% of their purchase value back at trade-in/resale each time after 5 years (so those first two cars, still driving the third), I’d be out a net $51,000 in vehicle purchasing.
By comparison, let’s assume (generously) that instead I spent $750 more each year (since age 20) on repairs to my aging vehicles that I wouldn’t have made had I bought something newer more often, plus the $15,000 actually spent purchasing my two cars.
That’s a difference of $51,000 – $27,750 = $23,250 saved for choosing to drive older cars these last 20ish years. Again, that’s a big chunk of money!
3. The three R’s for financial success
Whenever “I need to get a …. ” pops in your head, think the three R’s you learned in second grade on Earth Day. They apply to money as it turns out!
Reduce. This means go without. Soooo many things pop in my mind that I could use. The vast majority of these wants/needs I easily go without and soon forget.
Reuse. This means improvise by reusing something else in a new way. The most recent example of this I can think of is our son’s bag for his first season of Little League. When I was asking about equipment rules and such, a friend mentioned we might want a baseball bag as well. Definitely important to keep the equipment all together if we’re ever going to make it to a practice on time. I played softball for year and always had a team bag.
Well, instead of buying “all the things” before the first practice, we just used a small duffel from the basement (you know, the place full of all the “stuff” you already own) and sent him on his way to Practice #1. All the other kids had proper baseball bags, with special slots for the bat, etc.
But turns out our kid was fine with his old grey duffel, even when I commented we may need to shop for a proper bag so his bat doesn’t fall out (which it did). He said, “No, the grey bag works fine.” Well, this 15-year-old-car-driving-Mom isn’t going to argue with that logic. Good enough for now.
Recycle. This means borrow, or if necessary buy second hand. There’s so much stuff manufactured, shipped around, stuffed into basements, filling up landfills, just so much stuff in the world already. Whenever you can use something that already exists instead of consuming another item, do it. Good for the Earth, the basement, and your bank account.
4. Utilize a capsule wardrobe… and keep stuff for-ev-er
My mom used to give me a hard time about wearing the same grey fleece jacket to high school every day. In retrospect, my innate tendency to just wear the simplest ensemble at my fingertips (usually some combo of denim, grey, or black) saved me from constantly buying clothes my whole life. Nowadays we call it a capsule wardrobe- on trend!
A few basics, layer something colorful like a scarf when you’re going to be in front of people or in pictures. Done. Life simplified, and clothing shopping a rare necessity, not an expensive hobby. No more habitual ordering from the Banana Republic sale email, or ordering multiple versions of the same thing. Instead, I’ve learned to buy just one of something in my favorite pattern or color, that’s high quality and lasts. (I may have spent the entire COVID winter in the same pair of fleece-lined leggings from Amazon 6 days a week. One day off for laundry… go ahead and judge!)
An uber basic wardrobe is not for everyone! But I have to give the simple, small, worn again and again wardrobe credit as one of my keys to saving big bucks.
5. Don’t be afraid to DIY
Neither of us knew much about taking care of a house when we bought our first one, other than maybe painting a wall. But we weren’t afraid to learn. One night we rolled up our living room carpet and chucked it out for trash, because it seemed like a good idea to take it out. What’s the worst that could happen? Well, we learned a lot about carpet prices and DIY floor refinishing after that! It’s actually a very long story, but I’ll spare you the details. The point is that we just dove in and learned as we went.
In our second house, we had enough confidence to rip apart our 1980’s kitchen ourselves and ultimately remodeled it for about $2,800 (including a new above-range microwave and a Bosch dishwasher!). We got a lot of help from YHL, YouTube, and trial and error. Hiring out our kitchen update would have probably led us down a road of $20,000 or more. But instead, I have a kitchen I really like, that’s simple, and we preserved thousands in hard earned money for bigger dreams.
Slide the little bar back and forth and you can see the before & current day pics of our DIY kitchen below (don’t mind the clutter- haven’t mastered that yet!)
6. Invest in childcare
The early days of a career are important for growing your skills and value. They are also the years that parents are often tempted to leave jobs to take care of new babies. Personally, I’m just not a baby person. I didn’t have that desire to stay home with my kids when they were infants or toddlers. (Yep, I admitted it)
Instead, we invested in high quality child care. Child care that always made us feel awesome about leaving our babies behind 40 hours of the 168 hours we all have in a week. Though expensive, the investment in growth of your earnings generally far outweighs the up front cost of childcare.
Because I made the choice to stay in my career (yes, the one I am now choosing to leave!) in those early years, it put me in a position to bank serious money in the more recent years as our childcare costs fell. To me, this is the ideal scenario. I like the idea of creating more flexibility in my time now that my kids are older. Now that things like sports leagues with practices at 5:30 pm are entering our lives. Now that they are easier to travel with. And now that they can have interesting and important conversations!
Ultimately, although it was a rat race most of the time, I must acknowledge that my choice to work through the baby years by investing in childcare has now given me a lot of affordability to craft life differently and achieve financial success.
7. Be a financial team with your spouse
Certainly, if I were the only parent bringing in an income, I could not abandon a career with a solid salary and health insurance for pursuing my own business ideas quite so easily. But we are a team. There’s no “your” money, “my” money. It’s “our” everything.
But that’s not to say we’re always of the exact same mindset when it comes to money. We have both sacrificed for the sake of the other’s spending values, job choices, splurge purchases, money mistakes, etc. Meeting in the middle, striking a long term balance, and remembering it’s only money– are key.
And ultimately, that we each bring in a solid salary has enabled us to get to the point of one of us going out on a limb. That said, without the rest of these keys, it doesn’t matter how much you make if you spend it all!
8. Be grateful
If you’re reading this, you likely have a computer, a smart phone, high speed internet… so probably also electricity, running water, and roof over your head. We tend to only focus on comparing ourselves to what else is around us, or just out of reach. And we forget about what circumstances are for most others. Acknowledge you already have more than most people in the world. Focusing more on gratitude will automatically keep you from constantly wanting, and therefore, constantly spending.
I come from the mindset that I don’t deserve anything in particular. Sure, I did this or that in my life, worked hard, etc etc, but there’s just no way to justify that I somehow deserve all the privilege I have compared to all those who don’t have it. Rooted in the assumption that I deserve nothing, I can easily be more thankful for everything.
Final thoughts
So there it is. A trip down financial memory lane.
Today we have no debt except mortgages (one for an investment property, one for our home). Both mortgages have $100,000 in equity each. And we have enough cash in the bank to allow me to retire from a traditional career at age 37 and pursue my own business ideas and passion projects from scratch.
I am very thankful for this privilege. And am also thankful to these quirks and habits that have helped get us this far in the journey. Which ones look worth it to help you in your journey towards financial success?
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