We are a family of 6 living on a public school teacher’s salary. In 2006, we got serious about our long-standing debt and paid off over $25,000 in less than 2 years. We remain debt free (except for our house, which we hope to pay off within 7 years) and we have 3 months’ worth of living expenses in the bank.

I don’t say this to toot our own horns. I say it because financial freedom is not just a dream, but with a little sacrifice and creative thinking, it can be your reality.

Here are some things we’ve learned along the way.

Our General Money Principles

1. Live generously. An attitude of giving instead of getting changes everything. And it’s an absolute blast!
2. Planning is key. Without a plan, money tends to come in and go out unnoticed.
3. Understand the 10/90 Rule. 10% of our financial success is due to our wise choices; 90% is due to God’s grace. Our job is to obey, trust and pray; His job is to make ends meet.

Ways We’ve Saved

1. Tithe. We give 10% of our gross income every month. Even when it doesn’t make sense on paper. God fills in the gaps every time. Try it, you’ll see.
2. Read The Total Money Makeover by Dave Ramsey. This book changed our lives. I cannot recommend it highly enough.
3. Write and stick to a budget. This is imperative and it doesn’t have to be scary. Use the tools here, here or here.
4. Use the envelope system. Each month, dole out your money to your different budget category envelopes. Once the money in an envelope is gone, you’re done spending in that category. Budget (for Mac or Windows) is my absolute favorite way to do this.
5. Follow financially like-minded people. Their stories will inspire you and keep you motivated. Listen to Dave’s radio show (especially on Fridays) or read some great blogs.
6. Splurge on purpose. Build some breathing room into your budget for feasible luxuries and the well-being of your soul. Total deprivation now leads to excess spending later. Mine? A gym membership and a higher setting on the furnace.
7. Think upside down. Instead of asking the common question, “How much can we afford?” ask “How little can we reasonably get by with?”
8. Model well for your children. Instead of saying, “We can’t afford it,” say, “We’re choosing to spend our money on something else.” The former breeds a victim mentality, the latter, responsibility.
9. Purge and organize your stuff. First, get rid of stuff regularly — it costs time, money & energy to store it, maintain it and move it. Then, keep it organized so you won’t buy stuff you already own. (Clothes and food in the pantry/freezer are big potential pitfalls here.)
10. Don’t assume. Buying in bulk is not always more economical. Generic brands are not always cheaper than name brands. Eating out is not always more expensive than eating in. Figure out costs per unit or per person to make the better choice.

This post is part of Inexpensively‘s Blissfully Frugal Contest. Oh how I’d love to go!

Related posts:

1. The Great Debt Payoff
2. Where’s the Money?