The Formula for Financial Freedom

The answer to getting out of debt, saving for the future and any other financial goal is the application of the same formula.  It's not rocket science, but simple principles that not everyone puts into practice.

Believe it or not, the answer to getting out of debt, saving for the future and any other financial goal is the application of the same formula.

Live on less than you earn

The most basic rule of personal finance is to live on less than you earn.  For some it’s intuitive, for others it needs to be taught.

If you spend nearly everything you earn, you’ll be living paycheck-to-paycheck.

If you don’t live on less than you earn, you’ll find yourself in debt.

If you live on less than you earn, you will be on your way to reaching your financial goals.

Anything you earn and don’t spend can go toward your debt or savings goals.  The bigger the difference between what you earn and what you spend, the faster you will make progress toward your goals.  I will call the difference between what you earn and what you spend your “margin.”

Increase the margin

The primary way to make financial progress is to increase the margin between your earning and spending.  You can do this in two ways:  increasing your earnings and decreasing your spending.  Doing either of these will yield results, but doing both will increase and expedite your success.

For starters, decrease your expenses.  For instance, with a few simple questions, you could save big on your monthly bills.  Eat at home instead of eating out.  If you already do that, try cooking from scratch.  Try some cheaper alternatives to cable.  Try having a no-spend month.  Whatever sacrifices you choose to make, you will increase your margin immediately.

Start making plans to increase your income.  Whether that means finding a part-time job, starting an Etsy shop, looking for a better career, or doing what’s necessary to get a promotion, is up to you.  The sooner you start, the sooner you’ll increase your margin.

While decreasing your expenses is the easiest place to start and see results, in the long run increasing your income will make the biggest difference in increasing your margin.  You can improve your margin through cost-cutting only to the amount that you currently spend.  On the other hand, there is no upper limit to how much you can improve your margin through increased earnings.

The answer to getting out of debt, saving for the future and any other financial goal is the application of the same formula.  It's not rocket science, but simple principles that not everyone puts into practice.

It sounds so simple.  Why is it so hard?

When your earnings increase, the natural tendency is to increase your spending.  Lifestyle inflation can be sneaky and subtle.  It will add up in a lot of little changes.   We can go out to eat more now that we got that raise.  With that raise, let’s go ahead with the bathroom remodel.  We can go to Disneyland this year after all, thanks to that raise.  Without even noticing, we justify away any increase in margin.

Sometimes it’s not an issue of lifestyle inflation that makes it hard to increase your margin.  Sometimes you just need more income.  Maybe you have cut your expenses down to the minimum and you feel like you’re just barely keeping your financial head above water.  Your challenge will be getting creative in finding new streams of income.  Here are some ideas to start you thinking.  Don’t give up!

The third and often over-looked part of the equation is time.  If your first financial goal is to get out of debt, then it’s going to take some patience.  Focus on what you can do and don’t get discouraged.

It’s Your Turn!

  • What’s the hardest part of the equation for you, decreasing your spending, increasing your income, or waiting?

No-Spend Month Menu

Want to know what we're eating during the month where we aren't spending anything?  Here's a list of what we're eating for breakfast, lunch, dinner, and snacks this month.

I’ve had some inquiries as to what our menu this month looks like.  The funny thing is, our no-spend month menu doesn’t look too different from our menu in a regular month.

We regularly feed our family of five on less than $300 each month.  Much of our food budget is used to stock up.  When there is a good price on peanut butter, I might buy enough so that we don’t have to buy it again for 6 months.  We also buy fresh produce and other staples with our food budget.  If we ever eat out (which is very rare) the money either comes from our food budget or we use a gift card.

So far in our no-spend month, this has been what we’ve eaten.

Breakfast

  • Pancakes– We make pancakes regularly from our homemade pancake mix.
  • Strata– We recently tried a breakfast casserole with milk, eggs, cheese, and bread that was getting dry.  It wasn’t as good as the strata I remembered from my Girl Scout days, but we’ll work with it.  Maybe it just needs some sausage.
  • Zucchini Bread– At the beginning of the month I made three loaves with frozen shredded zucchini from last summer.
  • Oatmeal– If we eat it too many days in a row, everyone gets tired of it, but we try to keep oatmeal exciting with some fun mix-ins (fresh or dehydrated fruit, berries, raisins, sometimes even mini chocolate chips).
  • Puffed Pancakes– Pretty much the same as German pancakes, it’s made with eggs, milk, flour and sugar.  My kids LOVE it.  I’ll share the recipe soon.
  • French Toast– Nothing beats French toast made with homemade bread.  It’s the best thing to do with the last loaf of bread (since I make 4 loaves at a time, the fourth is always a little dry by the time we get to it).
  • Fruit Sauce– We have home-canned applesauce, pear sauce or plum sauce with our pancakes or French toast.
  • Bananas– We’re almost out, but we had bananas for the first week of our no-spend month.

Lunch

  • Peanut Butter and Jelly Sandwiches– I make everyone sandwiches with homemade bread with homemade jam.  Even my husband takes PBJs to work.
  • Apples or Bananas
  • Dehydrated Pears and Craisins– We dehydrated pears last year.
  • Homemade Yogurt-- I can send yogurt in my husband’s or daughter’s lunch using these containers because they don’t leak.
  • Zucchini Muffins– I use the zucchini bread recipe, just in muffins instead.
  • Pumpkin Muffins– If I feeling nice, I put in mini chocolate chips.
  • Quesadillas– We either make triangle pieces or cheese-roll-up style.

Dinner

  • Tomato Soup– I made from tomato puree that I canned.
  • Potato Soup– We love potato soup.  I use potatoes, carrots, celery, onion, garlic, bullion, and spices with a little cheese and sour cream (or yogurt) on top.
  • Meatless Taco Soup– I use tomato puree, pinto beans, white beans, onions, spices, sour cream cheese.  I cook beans in bulk in the crock pot, then freeze them in about 2-cup portions instead of using canned beans.
  • Homemade Pizza– We use homemade tomato sauce made from our canned puree.  Usually we just put pineapple on them.  I buy the #10 cans of pineapple at Sam’s club and freeze it in smaller portions, which is cheaper than individual cans of pineapple.
  • Bean Burritos– We have dehydrated refried beans in our food storage.  They are so yummy.  With cheese, sour cream, and lettuce from the garden, these are something we all enjoy.  When tomatoes are in season we add fresh tomatoes as well.
  • Creamy Tacos Casserole– This is a family classic comfort food.  I made sure that we had some corn tortillas so that cream tacos could be a part of our no-spend month.
  • Mock Lasagna– This is another comfort food for us.  I made sure we had some cottage cheese before we started our no-spend month so that I could make (and share) this recipe.
  • Leftovers– I always make a lot, so most dinners last two nights.  I try to mix it up though, so we don’t have the same thing two nights in a row.

Side Dishes

  • Asparagus– My father-in-law shares asparagus fresh from the garden with us.
  • Green Beans– We have plenty of canned green beans from last year’s garden.
  • Green Smoothies– We have a smoothie with dinner nearly every night.  You can read about how we save money on our green smoothies.

Snacks

  • Muffins– We make zucchini muffins and pumpkin muffins on a regular basis using frozen zucchini or frozen pumpkin puree.
  • Apple Slices– We’re almost out of apples though.
  • Dehydrated Pears– We dehydrated pears last year when pears were in season.
  • Frozen Peas– My kids think these are fun.  They don’t like them as much when they are cooked, but they like them frozen.
  • Graham Crackers– Sometimes I frost them or put chocolate hazelnut spread (I found some cheap at Grocery Outlet)on them .
  • Marshmallows– At Christmastime I got bags of gingerbread and snowman marshmallows for 50 cents a bag.  They were a potty training treat for my 2-year-old and now they are an occasional snack.
  • Homemade Cookies– I like to try out new cookie recipes.  Sometimes they are healthy-ish, sometimes they are just plain good :)

 

You carnivores are probably noticed something is missing.  For my dad, a meal wasn’t a meal without meat.  For us, meat is an occasional treat. We have some in the freezer, but we usually only eat  meat once a week, though some weeks we don’t have meat at all.

What are your frugal, go-to meals?  We’re always open to new ideas!

 

This post contains affiliate links.  For more details, please see my disclosure policy.

Linked to Thrifty Thursday
Checkout 51 Offers

Mock Lasagna– Frugal Dinner Recipe

Mock lasagna is a crowd pleaser and comfort food.  It's delicious like lasagna, but is much simpler to make and is easy to make in large quantities.  The secret is making the tomato sauce from scratch (don't worry- it's easy), but you can use store-bought sauce if you like.

Mock lasagna is a dinner our whole family gets excited about.  Mock lasagna is delicious like lasagna, but is much simpler to make and is easy to make in large quantities.  

My mother-in-law came up with the recipe years ago when her six children were young.  Now it’s a tradition that her grandchildren are enjoying.  The secret is making the tomato sauce from scratch, but you can use store-bought sauce if you like.

Mock Lasagna

  • 16 oz Macaroni Elbows
  • 32 oz Pasta Sauce– OR–  make your own with the following ingredients:
    • 1 quart Tomato Puree
    • 2-3 Tbsp Flour
    • 1/2 Tbsp Parsley
    • 1/2 Tbsp Oregano
    • 1/2 Tbsp Basil
    • 1/2 Tbsp Salt
    • 1 medium Onion, chopped (optional)
    • 2 cloves of Garlic (optional)
    • 1/2 lb ground beef (optional)
  • 1/2 to 1 lb of Ground Beef, browned (if you don’t already have meat in your sauce)
  • 2 cups Shredded Cheese
  • 16 oz Cottage Cheese

Mock lasagna is a crowd pleaser and comfort food.  It's delicious like lasagna, but is much simpler to make and is easy to make in large quantities.  The secret is making the tomato sauce from scratch (don't worry- it's easy), but you can use store-bought sauce if you like.

I start by making my tomato sauce.  If you don’t have your own canned tomato puree, you can purchase the puree to make your own sauce.  The ingredients are listed above, but the detailed instructions are here.  I really think this homemade sauce is what makes mock lasagna such a favorite.

You can use store-bought sauce if you have one you love.  Heat your sauce in a sauce pan and add browned ground beef.

Mock lasagna is a crowd pleaser and comfort food.  It's delicious like lasagna, but is much simpler to make and is easy to make in large quantities.  The secret is making the tomato sauce from scratch (don't worry- it's easy), but you can use store-bought sauce if you like.

Add your macaroni to boiling water in a large sauce pan.  Boil for about 10 minutes, or until they are done to your liking.  Drain and return to pan or large bowl.

Mock lasagna is a crowd pleaser and comfort food.  It's delicious like lasagna, but is much simpler to make and is easy to make in large quantities.  The secret is making the tomato sauce from scratch (don't worry- it's easy), but you can use store-bought sauce if you like.

While they are both still hot, add your sauce to the drained pasta and stir.

Mock lasagna is a crowd pleaser and comfort food.  It's delicious like lasagna, but is much simpler to make and is easy to make in large quantities.  The secret is making the tomato sauce from scratch (don't worry- it's easy), but you can use store-bought sauce if you like.

Add 2 cups of shredded cheese and mix until melted.

Mock lasagna is a crowd pleaser and comfort food.  It's delicious like lasagna, but is much simpler to make and is easy to make in large quantities.  The secret is making the tomato sauce from scratch (don't worry- it's easy), but you can use store-bought sauce if you like.

Add 16 oz of cottage cheese and stir.

Mock lasagna is a crowd pleaser and comfort food.  It's delicious like lasagna, but is much simpler to make and is easy to make in large quantities.  The secret is making the tomato sauce from scratch (don't worry- it's easy), but you can use store-bought sauce if you like.

Serve hot and enjoy!

To make this dish even more budget friendly, here are a few frugal tips:

  • Use stretched ground beef.  When I brown my ground beef I add in pureed veggies to bulk it up and stretch it out (and hide some extra veggies too).  I have a tutorial on how to stretch ground beef.
  • We buy cottage cheese in 5 pound tubs at Sam’s Club, which is much cheaper than buying individual 16 oz containers.  When I measure it, I just eyeball it.
  • You can save money by cutting down on the amount of cheese.
  • You can leave the ground beef out altogether and make this a meatless dish!

Linked to Project Inspire{d}

Checkout 51 Offers

 

Can’t or Won’t

Sometimes we say "I can't" when we really mean we don't want to or aren't willing to do something.  Where there's a will, there's a way!  If you want something bad enough, you'll find a way to make it happen.

Over the last few weeks, my kids have started claiming “I can’t” as an reason for not doing something they don’t want to do.  They know that an outright refusal won’t go over well, so they give the ever-lame excuse “I can’t.”

I called them out on their laziness and told them they can do it, they just don’t want to do it, which is different.  They persisted, “No, we want to. We just can’t.”

Having had this conversation with them several times recently I tried something different.

Where there’s a will, there’s a way,” I told them.

Their ears perked up.  They were eager to know what the new idiom meant.  I explained that if you want something bad enough, you will find a way to make it happen.  That quieted them.

Debt

While they thought about that, I thought about how it applies in my life.  When do I want things badly enough to make them happen, and when do I give the excuse that “I can’t?” 

I find that the list of things I can’t do gets shorter when I’m determined to make something happen.  In repaying our debt,  I realize I can do some things that once seemed extreme.  I not only can , but I want to, because I want to reach our goal badly enough that I find a way to make it happen.

Can’t or Won’t

When we first moved into the basement, we thought we couldn’t possibly stay here long-term (more than a month or two).  We were eager to get a place of our own.  However, when we set our goal of paying off our student loans, our priorities changed.  We were willing to do things that we previously thought we couldn’t do.  Our living situation has been the single biggest contributor to our debt repayment success thus far.  If we weren’t living in my in-laws’ basement rent-free we would barely be making ends meet and would not be making progress on our debt repayment.

Without a will, there would be no way.

I know we’re not alone.  Anyone who sets out to achieve a goal makes sacrifices.  If you want something bad enough, you will find a way to make it happen.  Where there’s a will, there’s a way!

It’s Your Turn

  • Tell us about a time in your life when you’ve wanted something badly enough that you found a way to make it happen.  Stories of determination are motivating.
  • What have you found yourself willing to do to reach your goal, that otherwise you wouldn’t do?