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The pandemic has caused many people, myself included, to reevaluate how we are spending money. Spending is important for our economy and communities, and mindful spending is important for our financial wellness. When savings increase, financial stress decreases. Building savings is often about spending less.
At the celebration of our 11th season of Summit’s Project Money,* winners Sue and Jeff shared something that really struck me. They said when they started, they thought they didn’t have money available to save, but they did. Jeff said, “Our money was right under our noses. It’s just that it was being spent.” I asked them to share some examples.
Kim: Where was your money hiding?
Sue & Jeff: We never had a budget before Project Money. With our coach’s guidance, we tracked our spending. Once we looked at how much we were spending, we were flabbergasted at the amount we spent on groceries and eating out. Why were we spending $1,200 on groceries and another $300 on eating out? We realized we had frivolous spending. Now we have a budget and use mindful spending.
Kim: Once you had the budget showing where you could make changes, what are some ways you found to spend less?
Sue & Jeff: Sue is a good cook. Before, we’d select a recipe and go buy the items. Now we come up with what to have by asking what we have at home and what’s on sale. Sue cooks Saturday and Sunday for the whole week. We know what we are having, and it’s easy. With our budget, spending is not just instant gratification. Before, I’d go to Costco for a few items and end up spending $280. Now, I bring a list and limit myself. The budget makes us stick to the budget.
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We also changed our debt. We went in owing a little on a car, some credit cards, a home equity line of credit and a mortgage we still had six years of payments on. We had medical bills that didn’t have interest so we thought we should just make those payments over time, but our financial coach talked to us about paying that off so we could choose where our money should go. Rather than making payments to seven places, we put the same payment amounts into one monthly payment on an Express Refi mortgage that we’ll pay off in three years. Now we have a plan and will be debt free at the end of 2022. Saving money became exciting.
And, we never felt we were missing out because it was our choice. We’d have friends come over for wine rather than go out to dinner. If we say no to spending, it’s because we want something else more.
Kim: What else would you share with others?
Sue & Jeff: If you don’t have a budget, you don’t know what you’re spending and you’re probably not saving. You need one.
A lot of little habits add up. The savings is unbelievable. Summit can show you how it works. Their Climbr® app puts your spending and savings right there in front of you. The more we saved, the more fun it got, like a game.
Kim: Congratulations on increasing your savings by over $36,000 and reducing your debt by more than $11,000 in Summit’s Project Money program! And thank you for sharing.
*Summit’s Project Money is a public financial education challenge pairing four participants with Summit financial coaches for seven months to manage their money better, increase savings and reduce debt.
