How to Start Saving Money | How to Save $1,000 a Month – Do you think it’s possible to cut your monthly living expenses by $1,000 without sacrificing anything truly important? Are you willing to put your family’s spending to the test?
I think it’s important to discuss because as working moms we are often the main spenders in our household.
I read the book “The $1,000 Challenge” and tried to follow the author’s advice on squeezing out $1,000 from my monthly expenses.
In Brian J. O’Connor’s book “The $1,000 Challenge: How One Family Slashed Its Budget Without Moving Under a Bridge or Living on Government Cheese,” the author did just that by trimming $100 from each of his family’s top 10 spending categories.
How to Start Saving Money
Step 1: Review expenses.
Brian challenged readers to look at all of their monthly costs using your bank statement and recurring monthly bills.
His suggestion was to trim regular expenditures, instead of ones you were emotionally tied to.
If you cut your monthly expenses, you will experience that savings month after month. The author wanted to give his family some luxuries regardless of whether he had received a raise.
He completed this experiment over the course of 10 weeks. I’m going to do the same, with this week introducing the series and a final post wrapping up the series, for a total of 12 weeks (12 posts).
Step 2: Set a target.
Brian’s word of caution –
“Your goal probably won’t — and shouldn’t — be $1,000.
I chose that number because it made a good headline.
But whether your goal is $500 a month, $200 a month or $50, the idea is the same:
Cut your current spending as deep as you want or need to go.
Focus on your biggest recurring monthly expenses. Finally, redirect that cash at your financial goals.”
Step 2: Choose a goal for the money you save.
After reading the book, I feel optimistic that I could find significant savings on many of my family’s monthly expenses with research and an intentional plan.
I have a large debt I’m trying to pay off, so these savings will immediately be put to use.
By nature, I am very thrifty. However, with a busy family and even busier work schedule, I can easily get sucked into spending too much on conveniences and allow expenses to increase each month without much thought.
My Relationship With Debt
My relationship with debt began in 1996, my freshman year of college, with a free t-shirt from American Express and a $500 credit limit.
Almost 20 years later, I still have hefty student loans, payments on financed purchases, and lingering debt from things long-gone.
I guess I never really got the concept of paying cash or using credit responsibly. The good news is that I don’t have any credit cards or auto loans.
How Debt Feels
Being in debt feels overwhelming, suffocating, discouraging, and sometimes hopeless. I compare it to nearly drowning in the ocean.
Imagine that you are swimming, but have become overwhelmed by the waves, the water suffocates the oxygen out of your body, the tide gets stronger, and there is no help in sight. That’s how being in debt feels.
As the Bible says in Proverbs 22:7, “the borrower is slave to the lender.”
Is my long-term goal to live debt free? I’m not certain. I think I’m okay with having a mortgage, but beyond that I plan to limit my use of credit, in the future.
$1,000. That is the exact amount I wanted to pay toward this debt before the opportunity to write this series presented itself to me – which I believe is further evidence that this experiment will work.
I am working today to pay for something I used yesterday, instead of saving for what I would like to do tomorrow.
I call the large debt I need to pay off the “Lifeboat Fund.”
My goal is to use any savings I am able to create during this experiment to pay down that debt – hopefully by the end of next year.
I have a few smaller debts that I am paying off this year. I will use that extra cash to pay on the Lifeboat Fund.
Dave Ramsey calls this a “debt snowball,” as you pay off the smallest debt first and apply that debt’s normal payment to the next debt, to create the greatest momentum.
How to Start Saving Money: A 12 Week Challenge
Over the next 12 weeks, our series will cover these expenses:
- Kid Costs
- Work Expenses
- Personal Spending
- Life Insurance
The first category of expenses I reviewed was my transportation costs – car payments, insurance, taxes, maintenance, repairs, licensing, gas, etc. Come back next week and we will see if I was able to trim $100 from my monthly transportation expenses.
Have you ever made significant cuts to your transportation expenses? Share your savings strategies, questions, and tips in the comments.
Are you willing to put your family’s spending to the test? Do you think it’s possible to cut your monthly living expenses by $1,000 without sacrificing anything truly important?