The last couple weeks I’ve been sharing what we did to get ourselves out of the financial black hole we were in for four years.
First, we had to get real.
The second thing we did was to figure out how we could reduce our expenses, and by doing these five things, we cut $1,660 in monthly expenses.
$20,000 a year!
Last week I told you I’d share the next thing we did to cut another $2,500 a month out of our monthly bills.
No, we didn’t sell our house.
But we did make some big changes.
First, a little background.
When my husband and I first got married, he owned a small contracting/carpentry business. He had owned his own business for over twenty years.
Owning your own business can be lucrative. It can also give you flexibility that you don’t have when you are someone else’s employee.
The first couple years we were married, my husband had some good jobs and made decent money.
And then the economy took a nosedive.
It seriously affected contractors and carpenters.
Many people don’t realize how hard it is for people in the trades who own their own businesses.
Especially the ones who operate by the books. The ones who hire legal employees and carry the required insurance.
I mentioned last week that when we first got into financial trouble, we needed $8800 a month to cover our expenses.
That’s a lot of money.
A large part of that $8800 was workers comp and liability insurance for my husband’s business.
We were paying over $2200 a month for that insurance.
I don’t think people realize how much contractors and carpenters who own their own businesses have to pay in insurance! It’s crazy.
When the economy went south, so did the people having the money to put into their houses.
We spent a couple years chasing jobs. Chasing and chasing and chasing. And paying for insurance coverage because once you let it lapse as contractor, it can be difficult to get again. And people don’t want to hire uninsured contractors and carpenters.
We kept chasing.
Trying to build the business back up.
And then, after two unplanned major surgeries in back to back summers, we finally decided it was time to stop chasing.
And my husband started looking for a different line of work. Perhaps you’re wondering why we didn’t make that move earlier.
Well, it’s a tough thing to do for someone who has owned his own business and worked for himself for over thirty years. And we were still holding on to the hope that we’d be able to turn things around.
In hindsight, I wish we would have pulled the plug much earlier.
But you know what they say about hindsight.
So with that decision, we eliminated another $2200+ from our budget.
I told you we cut out $2500, though. Where did the rest come from?
Once we decided we were definitely done with the contracting, we sold my husband’s truck, and we went down to only owning one vehicle.
We already owned it outright, so we didn’t have a car payment.
But that eliminated insurance for that vehicle, as well as property taxes on it.
Was it a pain in the ass to only have one car?
Sure. It was sometimes an inconvenience.
But you know what’s more inconvenient than only having one car?
Being fucking homeless.
So we opted for the one car thing.
And then, as luck or serendipity or the Universe or whatever you want to call it would have it, my husband got a job.
And along with it came a company vehicle.
Sometimes when you take a leap of faith or make a big change, things just fall into place.
So if you are in a financial jam and you’ve been in one for a while now, first, make sure you know what your expenses are each month.
Then, cut out the fat.
And then take a good hard look at what you’re doing. Maybe it’s time for a change.
Maybe instead of swimming against the current, you should just swim to the shore, reevaluate, and find a different way to get across the river.