YAY!! We made it to the half way point! It is an exciting place to be and we bet it feels so amazing to see some great progress with your financial situation!
We love doing this challenge every year as we get to a MUCH better place each and every year – with the first year being the most amazing year as we were on a fast track to drop the remaining $85K of our consumer debt load very quickly. Then, once we were debt-free, we didn’t want to stop there, but continue to remain so, pay cash, live frugally, and enjoy a wonderful life on less than the money we were bringing in. It’s really weird how living, buying and splurging less, but stay in budget and far under income is far more satisfying and enjoyable.
The idea of The American Dream has been so perverted. You don’t need that house, car and everything now, but you work towards it, pay for it before and feel so much better. Chasing the modern definition of The American Dream is what got us into so much trouble.
Friends, trust us, you will not regret the steps, challenges and sacrifices you are making to complete the challenges we share here and any other financial goals you have. You.Will.Not.Regret. It.
Well, enough rambling on…we really can talk forever about living the good life on a budget, but it’s time to get to business on this week’s challenge as talking alone doesn’t make progress, but acting on the talking brings progress!
You may have already seen this week’s task coming since it is the one task that is continuously repeated each month – but instead of looking at it like, “Yeah, yeah, I know, I know…,” let’s approach it with a different attitude and say “Yay, we can, we can and it will be so nice to have 4% more to work with towards our goals!!”
This Week’s Challenge – Implement This Month’s 2% Spending Cut and 2% Income Increase
As a reminder about the 2×2 plan…you will want to read this article:
- It’s Here! Our Secret 2×2 Formula We Used To Pay Off $1ooK of Consumer Debt (there are additional links within the article about why other approaches did not work for us for those lifelong financial changes)
Again, this is where the regular, incremental changes take place that are going to make for a rock-solid financial situation. The tasks on the “in between” weeks that we recommend are going to have some amazing impacts on your finances, but it is this habit that will keep you going on and on and on…
We are always finding ways to cut our budget a little more and it is just a matter of putting your thinking caps on and getting creative. Since we have been decreasing for several months now, it might seem near impossible to find another 2% cut… well, you may currently be at your rock bottom budget. And if so, THAT’S GREAT! Stay there. But at the beginning of each month, always re-evaluate and re-assess. Times, events, needs and so much more change, not to mention the fact that you find new ways to save.
However, we are only on the fourth month of dropping our budgets by 2%. For most households, there are still many things that could be dropped.
I know we seem to keep bringing this up….it’s just because it is that important and easy to drop in this category….that grocery and eating out budget. It’s a big topic with LOTS of wiggle room, and just like previous months, continue to work through the long list of ways to save. That list is found HERE.
And remember, once you feel like you have exhausted your grocery budget and eating out budget, it’s time to move to other areas! Services, fees, other payments on things you are not using, etc. Are there areas in which you could cut back and make a sacrifice? We’ve shared tips in the past month’s 2% decrease ideas, but this month, look at replacing your household cleaners and cleaning products with much more affordable homemade versions that are also healthier for you. In fact, you can make replace 24 household cleaners for $12 by making them yourself with 9 ingredients – including laundry detergent, dishwasher detergent and others. This will be a major drop in your budget!
Here’s the information on the homemade cleaners recipes:
- Shopping list to be able to make 23 natural homemade cleaning products for a very low price tag of $12.
- And then if you wanted to make them anti-bacterial and anti-viral, we also shared the natural but effective add-ins for much less HERE.
Step #2 this week is to also find ways to bring in extra income. These are generally in the form of extra jobs, side jobs, etc. Again, we have shared the articles on this and instead of restating the steps and ideas here, just see the previous articles as well as the Money Making Ideas section of our site and the Over 130 Ways To Earn Extra Income Ideas list.
Here’s the previous articles on the 2% increase:
- Brainstorming extra income ideas
- Turn your ideas into real money
- How to increase income by 2% each month
BUT…we are also going to challenge you to go through the ideas AGAIN in the How To Get $1,000 in 30 Days ebook because you will undoubtedly be able to apply those principles and ideas again and easily find this month 2%. It’s been nearly 6 months since we introduced this to you and that means it’s a new season and new opportunities to get cash quick!
For those that are just now reading this and don’t know what we are talking about…
We recommend that you read up on a few articles regarding the 2×2 plan. This is a life-changing, incremental financial plan and one that helped us get out of $100k of consumer debt and one that has helped countless others to get to a better financial place. Start with this article talking about the 2% decrease that also contains additional links for even more details on the plan.
We also recommend that you start our financial challenge from the beginning if you want to really see some big changes with small weekly steps for the next 52-weeks! You can read about how to join us in the 52-Week Take Back Your Finances Challenge from the beginning.
Resources Needed for This Week’s Challenge (Reviewed from Previously)
You will need to find and gather the following resources to help you complete part of the challenge this week:
- Budget Sheets from Week #3
- 12-Month Monthly Summary Budget Planner from Week #7
- Thinking Cap
How to Figure 2% Decrease and 2% Increase
Just revisit and recalculate for this month, just like previous months.
As review, we are going to use our sample calculations based on the sample budget sheets from Week #3. Referring back to these sheets – there were 3 kinds: Bills, living expenses and debts. Exclude the debts form at this point. Add up your Bills and Living Expenses Monthly total.
In our samples, we have $1265 in living expenses and $1825 in bills. This is a total of $3,090. Then you will calculate what 2% of this is by taking 3,090 x .02 = $61.80. This is showing the same example as last month, but theoretically, there may be less living expenses or bills this month after last month’s 2% cut.
But in any regard, $61.80 is our target spending decrease goal for this month using these examples! Write this on this month’s Budget Summary Printables from week #7 (again only on the current month as you are going to recalculate this goal number each month).
Then follow the same steps by evaluating your income by referring to page #1 of the 12-Month Monthly Summary Budget Planner from Week #7. Then fill-in your 2% increase.
So now that you know your target goal, evaluate where you can make these changes this month.
BTW – we haven’t made it a continual challenge, but be sure that you are filling-out your 12-Month Monthly Summary Budget Planner from Week #7 each month. Just coordinate with the week you prepare to make your 2% decrease and 2% increase. Just start the habit. 🙂
Stay motivated, stay focused and stay encouraged! Big things are happening! You will be so thankful for these small steps that you are taking!
Need to catch up? Come join us on this challenge from the very beginning by clicking on the 52-Week Take Back Your Finances Challenge and sign up to start receiving your automated challenge from the very beginning!
One final thing…we also have a Facebook Group where you can engage in discussions, receive encouragement and talk to others that are participating in the challenges too for more ideas! Head to the Be Intentional with The Thrifty Couple Facebook Page HERE and ask to join us there! You can also invite friends and spouses too!
Disclaimer: We are not licensed financial planners. We are only a couple that have been just a hair-breadth away from bankruptcy and found our way out of debt with a goal to now help others. Please make sure to consider any advice given on our site and in this challenge as tips we have used ourselves; they may not work for everyone. If you have questions please make sure to contact a licensed professional.