Earning a Raise: A Savings Tale
As a child, I grew up with not a lot of money. We were considered below the poverty line, rarely had food in the house and never had extra money. During these years, I learned how to be thrifty and use my money wisely. While my childhood economic circumstances were not the best, they set me on the path to success as an adult.
At 18, my girlfriend ended up pregnant. So, I married my childhood sweetheart. At this young age, I was not old enough even to sign an apartment lease. Both of our parents were poor, so we were doing everything on our own. I was working at a local factory and my wife at Walmart. We did the best with what we had, but that was very little.
Thankfully, over the years, we were able to thrive. I knew how to live off little money, so we took what we had and did what we could. As a young couple, we had zero credit. We were unable to buy a car, purchase a home or do anything really. So, we began to focus on building credit. This was a slow process and would keep us from buying our first home until the age of 25.
By the time I was 23, the factory I worked at had shut down. This was a blessing in disguise as I was able to go to school financed by a government program. Earning a certificate in HVAC, I was able to land a good job, that I still have today. At this time, my wife’s career had not taken off yet as a writer, so we were still having to scrimp and save.
Saving Our Earnings
Once I earned my first job as an HVAC technician, I was making more money than we had ever seen. It still wasn’t a lot but was more than what we were used to. I decided that we were not going to live above our means. We had bills to pay of course and were trying to build credit, so we still lived on a meager income, no matter the increase in pay from my job.
In just a few months, another job opportunity opened up for me, this one would pay even more. I applied and got the job. At this point, we have two children, one around the age of 6 and a newborn. So, more mouths to feed and take care of.
With this new job, I was making even more. However, I ignored what I was making. I decided to place that extra money in a savings account. This helped us to have money to use in case something happens, and something always happens.
Over time, I continued to earn pay raises. So, I continued to ignore the additional income. I placed the money in a savings account and began to think about what I could do with the funds. Over time, with a new higher income, I was able to purchase a new car.
Here is an example of what I did to be able to see how I used the income over what I originally was making. Let’s say I was making $500 a paycheck. With bi-weekly pay, this equals $1,000. Now, of course, many people could not live off of $1,000 a month, but we could. I knew how to stretch our money; we never really went out or spend extra on entertainment, nor did we buy luxury items. We only spent money on life bare necessities.
Once I started receiving the additional income, it was $100 more per paycheck. This would equal to $200 in extra money per month. So, I placed this money into a savings account. Eventually, the extra income equaled out to $500 per month. Because of this increase, I created a new plan.
Instead of saving the money with each paycheck, I was going to do something with it. My wife had a good job at this time, so she could contribute to the savings account and use my money for something else. I looked at the $500 and decided that I would devote half to a car payment since we needed a new vehicle.
So, we bought a new car and made sure that the monthly payment was not going to be over $250. I then placed $125 each paycheck towards the car payment. The remaining $125 would have another use.
I took the remaining $125 and created another savings account. For the first half of the year, this money would go towards our family vacation and then the second half of the year, the money would go towards the Christmas holiday. Because of my planning, we never had to come up with money for vacation or Christmas. At one point, we had an incident occur where money was needed, so we were able to pull from these extra savings.
Over the years, we have been able to pay for vacations to Disney World, as well as other locations, simply by living on our original income from our younger days. We have paid off three vehicles and always had money for the holidays. With this plan I created, we have been able to do things that I never imagined.
As a child of a poor household, I never imagined that I could have enough money to buy brand-new cars or take the type of vacations we enjoy. However, it was the simple decision to live on as little income as possible and save the rest that made out lifestyle a reality.
Saving money can be difficult and if you are a spender, you may find it hard to cut costs. However, it can be done. Take a look at your current spending. What can you eliminate or save on? By looking at your spending and creating a budget, you can then have money left over to use as you wish. I try to be smart with my spending and focus more on cutting costs where I can.
Most of the household money goes towards groceries, television and the internet. I am always looking for ways to save in these categories. My wife uses coupons at the grocery store and always shop sales. For television savings, we cut the cable cord and rely on streaming services such as Netflix and Hulu. By finding ways you can save with your income, you can have additional money available to use as you like.
We continue to live on $1,000 a month as much as we can. Of course, we go over from time to time, but we have the savings in place to fall back on if needed. Because of the decisions, I made as a young adult, I have created a financial formula that works for me. You can make one too. Start by reviewing your finances and figuring out what you want in life.
For me, I wanted security and to travel. We can feel financially secure with our earnings and we can travel when we like. Setting financial goals and sticking to them have benefited our family in more ways than I could imagine!