Small Steps Lead to Wealth: Carnival of Personal Finance 107

by SMD 

Here are my two favorite posts from this weeks Carnival of Personal Finance, hosted at has a very inspiring article for all of us who feel like it’s just too late to dig out of our cycle of personal spending and debt.

“Our monthly expenses went from $6500 a month to $1200 a month. I stopped working. Husband reduced his work week. I was 50 years old. Husband was 44. With no more mortgage payments, car payments, credit card debt, we have been able to amass an extensive retirement portfolio as well as a savings account and an emergency fund these past five years. We are making up for lost time.”

Their friends laughed at the way they cut back so drastically, basically removing all expenses that were not absolutely required (and redefining what most of us would consider absolutely required expenses!), even going so far as to sell their house, and using that money to pay off debts, and then only using the remaining money to purchase a house in full. How did they do it? The only way they could was to build a house from scratch. Something they knew nothing about…   While they might have taken the concept of getting out of the cycle of debt farther than most of us are willing to, the principles they used can certainly be applied by all of us, to whatever degree we are willing.  And they are proof, it is NOT too late to start digging out!

 Along a similar vein, over at, they offer 40 suggestions for Trimming The Fat: Forty Ways To Reduce Your Spending.

“One of the biggest challenges in personal finance is figuring out ways to reduce the regular bills that we all face each month. These continuous regular expenses simply fill up our budget, leaving us less money to invest for the future – and also less money to spend on things that we enjoy.”

They remind us that the best way to reduce spending is to begin with all that we consider to be required spending, and look for ways to reduce those.  For instance,  one of their many great tips is that all of us can try is:

Request a credit card rate reduction If you’ve got a decent amount on your credit card, call up your credit card company and request a rate reduction. If they won’t go for it, get a 0% balance transfer onto another card. The key here, though, is to stop buying on credit until your financial situation is healthy.

And another is installing CFL  (Compact fluorescent lights)  Can’t make much difference right? Well, they add it up for you and show that changing out your bulbs leads to a surprising savings.

… under normal usage (4 hours a day) and normal electrical rates ($0.10 per kilowatt hour), replacing a 75 watt bulb with a 20 watt CFL saves $0.66 per month. Multiply that by all the bulbs in your house to see how much you’ll save every month.

There are a lot more great articles well worth a look, but those two in particular were inspiring and motivating for me this week.  I’m all for spending some money enjoying things, but there is something ironic about when I complain about my finances while drinking my 6th Starbuck’s frappuccino of the week.

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