My history may not be particularly spectacular, but it has an important, educational valor: a turning point. Now I know what life on the both sides looks like: first, living in financial unawareness, and then being on the path of creative savings and seeking additional sources of income; this knowledge allowed me to get my family out of significant debt.
I am an artist: a choral and symphonic director. Since about my thirteenth year of life - i.e. since the moment I decided on being a musician - I have willingly isolated myself from material matters, rejecting them as unworthy of the interests of an artist. The solid financial situation of my parents allowed me to preserve this attitude for many ears. My wife, whom I have married ten years ago - a humanist, psychologist - unluckily approved of my anti-materialist attitude. Throughout the decade we have twice reached the very bottom of misery, achieving maximum debit on all our cards and credit lines. Our only financial cushion were my parents, who twice granted us a loan (as it later turned out - a non-return one, or, more like, without possibility of repayment). Alas, an uncontrolled and ever-loose budget was a sure guarantee of another financial troubles.
From our parents we had received the "fish", instead of the fishing rod. With the birth of our children came a strong impulse for change. I eventually understood that I need to get the fishing road, and learn to use it, instead of asking for the fish. I started looking for solutions. The Internet, and especially a single financial blog started my financial education.
The first action I took was collecting shop receipts and noting down expenses. This step was definitely revolutionary and the most difficult one, since every time I put a receipt into my wallet, I would grossly offend my artistic nature. I quickly started seeking a proper tool that would substitute the piece of paper, and help prepare a financial balance. I decided to use the freeware Microsoft Money program.
The next step - convincing my wife to changes and to collecting receipts - turned out particularly easy.¬ I'll tell you something: we have actually developed a healthy addiction for collecting receipts and "staring" at MS¬ Money charts.
I am positive that in the first month of taking note of our income and expenses, thanks to saving receipts alone, we have saved at least 10% of our income, and the expenses categorized by Ms. Money have proved to be a revelation to us! Suddenly everything became clear. We saw the channels through which our money leaked, and saw how much our understanding of money flow was indeed flawed. In a short time I closed one bank card, and a bank account with high maintenance costs. At this point we were left with another credit card and a credit line to repay. It was high time to generate savings, and seeking additional income.These are some of the methods used:
- Bottom line: well thought-out shopping (me and my wife have reached a conclusion that tightening your belt too tightly may result in the yo-yo effect, and thus we try to save money in a reasonable, balanced manner).
- Noting down my monthly water usage helped me realize how much we have been spending on water, and motivated me to buy tap inserts, which has decreased water flow by 70% (at a tiny cost of 4x5 PLN).¬¬ This generates over 1000 PLN in savings per year.
- Limiting outdoor dining: my wife cooks great-tasting and healthy meals, thus the benefits of taking food from home are not merely financial.
- Bicycle instead of a car: like I said - healthier and cheaper.
- Some long time ago our ISP agreement expired; I requested a 50% reduction in the subscription cost... and got a discount immediately.¬ 330 PLN in savings per year.
- I asked my bank for charge-free ATM withdrawals (which it provides to all its new clients), allowing me to save 60 PLN a year.
- I took a closer look at the size of my mail box, and cancelled extra space subscription.¬¬ 120 PLN in savings per year.
- My job requires that I travel to Warsaw at least twice a month. I found out that it is possible to lower ticket costs, and bought a subscription ticket: I now pay for 5 crossings, and make 7.¬ At least 700 PLN per annum in savings.
- Moneyback programs: the expected profit is as much as 2000 PLN annually.
- And, eventually: repayment of all our debts. Our savings due to this amount to about 2000 PLN a year.
The process of repaying debt has proven to be the path towards life maturity. Dear reader: do not let people convince you that "money doesn't stick to you" or that it is "simply your nature" to spend a lot. I am a solid proof that saving and managing money is the skill that anyone can learn. Like a pianist practicing piano, we also must practice our new skill on a daily basis, to finally enjoy the long-desired mastery.