How we restructured our personal finances
The day it all started, was somewhere during a holiday with our family. We are abroad, sitting in a cabin in the forest somewhere and we started talking about our future. We meaning my husband and I, the children couldn't be less interested ;-). During our talk, we came to the conclusion that what we were doing, financially, might not have been the best for our future. Mind you, we never spend money we didn't have, we didn't have consumer loans and we did have some savings, but our money mindset was still mostly 'if you have it, spend it'. Luckily for us at the time, we didn't have a very expensive taste, or it might have escalated much quicker.
We decided to set goals for ourselves. Because what was it that we really wanted in life? We wanted freedom. Freedom to decide for ourselves what to do with our lives. We wanted freedom to do work that we liked to do, because we like it, not because we have to. We wanted to be able to go to school outings with our children, even if that was in the middle of the week. So basically, we wanted to control our own life, not just living to pay the bills. For us, this meant mostly cutting down on our monthly expenses and paying of our mortgage faster than was required.
That day, we decided to start working on our finances the minute we got home. And so we did. The day after our holiday, we pulled out our laptops and started making an overview of all the spending that we did. And with that, an overview of everything that came in. When looking at the monthly costs, we decided that we could cut in them. And we decided to cut in our shopping. Because, in theory, we should have a lot of money left over at the end of each month, but in practice, it was always gone. The goal was to cut the costs down by at least 50%. It was challenging, but we decided to set that as our goal. We decided we wanted to save at least 60% of our income. Of this 60%, we wanted to pay off an extra €1000,- each month on our mortgage. As I said: the goals were steep!
And so we started. We cut down on unneccesary subscriptions, we cut down on groceries, we switched our power and cable companies, we changed our insurances and most importantly: we started asking ourselves with each possible purchase 'will this truely make me happy'. After a year, I can say that we have truely managed to bring up our savings rate.
We're almost there. I will take you with me on the adventure that we had, in a couple of different blogposts. In each blog I will write about one area of budget cuts that we did. So you might be inspired to see what else you can do with your money.
