An emergency fund out of thin air

When I got my first job after college, I owed $20k in student loans and my annual salary was around $25k.  After applying my after-tax earnings to rent, car maintenance, groceries, student loan payments and typical monthly expenses, I had very little left over.  But my girlfriend at the time, who is now my wife, and I still wanted to go traveling.

I started a spreadsheet to kept track of where the money was going and kept it up for 3 years. We reduced our habit of eating out once we realized how much we were spending on tips alone.  We started saving $10/week for our vacation fund. This was collected in a jar, not in a bank account.  The interest to be gained from the bank from our initial amount would be minimal anyway. We applied this strategy to have something that is tangible and we can visualize our goal.  It helped motivate us in saving more money.  Then we progressed to saving 10, 15, 20, etc per week.  Anytime we had extra cash, we would put into the 'fund'.

Turns out by the end of the year, we had over $1000 available for a nice road trip, all from our 'pocket change'.  This was a good exercise for us and it conditioned and solidified our spending habit for our later years.  We have a sizeable net worth, along with a healthy savings account, retirement savings and still able to contribute to our kids education fund.  We own both our vehicles and pay off our credit cards monthly.  The only outstanding debt is our mortgage.

We buy toys for our kids only when it's on sale and for the right reasons like rewarding them for accomplishments.  If they want it bad enough outside of those parameters, they'll have to put it on their B-day and Xmas lists.  My wife and I forgo the annual gift exchanges rituals for bdays, valentine and xmas, other than with the children.  These holidays have become so commercialized that we feel it is wasteful to participate.  It's not just the cost of the gifts.  It's also the shopping time involved, cards, gift wrappings, shipping charge and the guilt of giving to some and not others for various reasons puts a lot of unnecessary stress on you.  We simply just pick up the phone and call to wish them well.  This solution is more personal, practical, less stressful, cheaper and less harmful to the environment.

We don't buy new clothes often.  If we do, we'll visit the local thrift shop and pay a fraction for designer labels.  We also sort through used book piles for the titles that my kids enjoy at $0.99 each, instead of the 7.99+ sticker price. We stay local (within our state) for our vacations and venture out further every couple of years. 

My wife and I both came from less-than-modest families.  She and her family were refugees to the country and my family moved here with little to our name other than our meager savings.  We hope to be able to pass on our frugal messages to our kids.  It seems that this is a more difficult task these days with all aggressive advertisings and all the peer pressure they are exposed to.  Remember, everyone who wants your attention is trying to get you to part with your money.  It's your job to keep it, which is really tougher than it sounds.  But you can do it with discipline and determination.  Good luck to us all.

My mother was the oldest of 7 kids, who all now have several kids of their own.  We too quit spending money for everyone for holidays and birthdays.  For Christmas instead, each family contributes a small amount (much less than they would if we bought presents for everyone) to a general fund.  We then use this money to adopt a family from the local Salvation Army.  Then one day we all get together and go shopping for presents for that family.  We all save money in the long run, and it is teaching the grandchildren (27 to 6 years of age) how important it is to give to those that need things more than we do, and a little further away from the commercilization of it all.  Also, we now have "quarterly" birthday parties for the whole family.  It's a pot-luc style meal, no presents except the joy of having the whole family together to celebrate all the birthdays in those three months. 

Also, my spouce is in the military, so we have recently had to move and I had to leave me well paying job that I dearly loved.  I have a college degree, but where we are stationed now, the economy has hit hard.  I have been lucky to find a job, that pays 25% less, and has fewer hours than I am used to.  This was very hard at first, but with a little adjustment, things are going good.  My paychecks are irregular, but there is a minimum amount that I am guaranteed each time.  I have all paychecks direct deposited into my savings account.  The first of the month I have a set amount moved into my checking to cover my bills and other expenses (gas, groceries, etc.).  The rest stays in the savings and earns a little more from the interest each month.  We go out on a "date" once a week where we go out to eat and enjoy another activity such as a movie.  We spend more time at home and are getting to spend more quality time with each other.  I had canceled our Blockbuster Online account, thinking that was a waste of money.  But after having to pay over $14 last night to rent a movie due to late fees (I really think it is impossible for him to get them back on time!) I think I will start it back up again.  The account I had was 2 movies at a time, no late fees, and it costs nothing to mail them back, and we save gas money too!  My car is 9 years old, and I would really like a new one.  But it runs, looks good, and gets me from A to B, so it stays.  I am a firm believer that with just a little work, anyone can save.  I have over $2,000 in a savings account that was in the double digits in December.  It is all about your priorities.