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Maybe Sometimes It’s Not Possible to Save Money

By JLP | July 8, 2008

An AFM reader left this comment on my post, You Can Build Wealth Even if You Don’t Make A Lot of Money:

I live in the midwest, in a small town with a lower-than-national-average unemployment rate and a lower-than-national-average education rate (not many degree holders here). Our town has a population of just over 4,000 mostly consisting of farmers and cattlemen. So, the job market is somewhat difficult.

I have been a stay-at-home mom for the past year, a decision made with rising gas prices in mind since my job was a commute of almost 40 miles a day each direction and the cost of daycare also being high. I have three children: 15, 13 and 4.

I worked as a graphic artist for a local newspaper for several years, and also still currently teach classes as an adjunct instructor for our local community college outreach. (I usually teach 2 classes per year at $400 per credit hour which works out to $1200 gross per semester if we get enough students to have the class.)

I am currently enrolled in college to obtain my bachelor’s and then master’s degree in an education leadership program online.

My husband has worked in construction, making enough money for us to pay our living expenses and allowing me to stay home. Currently, however, he is working at a salary of $35k yearly at a local mill (processing organic flour and other organic grains). He has no college degree, but would love to return to school to obtain a teaching degree (as an art teacher).

We are currently living in a small (1200 sq. ft.) home that we are trying to purchase at $35k. We have a 2001 F150 we are still paying for at $380 per month. Our utilities run $130 for gas, $195 for electricity, $35 water, $40 trash (quarterly).

Our phone bill is about $180 per month, give or take a few dollars. Our rent is $400 monthly.

We have some medical bills that we pay about $100 monthly on, two credit cards that we use and try to pay off each month (one with a limit of $300, the other $750 – we are using these to raise our credit score and buy things we would normally buy with cash or debit cards for ordinary expenses) and our auto and renter’s insurance costs are $87 monthly.

We try to keep our grocery bill as low as we can around $300-$400 monthly.

My husband’s take-home pay is $1150 bi-weekly.

I am not a financial aficionado, but even I can see that saving money is not an option for us right now. We try to reduce our expenses as much as possible. We rarely buy extras. We don’t eat out or go to the movies.

We will be having some big expenses coming up soon… school clothes, supplies and tuition for three kids. I don’t know how we’re going to buy them clothes for school without using credit cards, and taking several months to pay that debt.

Supposedly everyone can save money…

So, any advice or solutions? I doubt any of you money savvy people will be able to find any extra money in our budget, but I didn’t think it would hurt to ask.

My Thoughts

This may sound radical, but here’s an idea:

Move.

I have never understood why people become so attached to an area with little economic promise. If there aren’t any opportunities in the town you live in, then move. Given the fact that you rent your house, you have the option to move on. I certainly wouldn’t be trying to buy the house.

If moving is not an option, then I’d think about the decision going back to college. What’s the plan after getting the degree? If there’s no opportunity in the town now, then how’s a degree going to change things? I’m not knocking a college degree. I just think you need to have a plan of action.

I would also consider selling the truck and buying a cheaper car. This may not be an option since truck values have fallen due to high gas prices but it might be worth a look.

$180 for a phone bill? That seems extreme to me. I guess if it includes cell service an internet, then it’s probably not too bad. Still, I think I would look for ways to reduce it.

Consider growing a garden. You have three kids that could help out and it could be a great hobby. It could also help trim your grocery budget.

Your last option is to sit back, relax, and enjoy your 4-year old. Then, once they start school, you can go back to work.

Those are my thoughts. I’m sure AFM readers will have their thoughts too.

Topics: Budgeting | 49 Comments »


49 Responses to “Maybe Sometimes It’s Not Possible to Save Money”

  1. Erica Says:
    July 8th, 2008 at 12:00 pm

    It’s amazing how simple a solution moving is and yet many people never consider it. Having grown up in the Northeast, for me, it seems perfectly logical that you find a job and then you figure out where you live. However, for a large segment of the population, they figure out where to live and THEN they find work in that location. I think changing the mindset would help in this situation tremendously.

    That said, I fully support both parents getting college degrees. Nothing improves earning potential like an education.

    Good luck!

  2. Joshua Says:
    July 8th, 2008 at 12:17 pm

    I’m going to have to ditto everything already said. If there are no job prospects then you’ve gotta move.

    However, you could still save money with your budget even if you didn’t move. The key thing is to “Pay Yourself First”. That is, when your husband’s check comes in you need to take 10% of it and sock it away in an ING savings account, put it into an IRA, or whatever your long term savings goals are.

    This small action will allow you to save and then will not only physically but psychologically force you to spend less. $180 on the phone.. that’s ridiculous! As for your utilities, I live in the Midwest and those seem high to me. I think you need to sit down with the family and start talking about ways to cut down on that. Turn out the lights, turn off the TV and play outside, use a fan instead of air conditioning when possible, shorter showers with cooler water and every little bit helps. You’ll see a HUGE difference at the end of each month.

    I could go on and on, but you CAN save and you can start by paying yourself first and then living off what’s left. You’ll be amazed and what you can do without that 10%. Best of luck!

  3. Beth Says:
    July 8th, 2008 at 12:19 pm

    From one Midwest Mama to another…

    You used to be a graphic artist and now teach classes. With the internet making things so convenient, why don’t you market your skills and provide graphic services to businesses within ‘x’ radius of your home? That would allow you to earn a little extra cash, but remain at home with your children. Also, you’d only have to commute to possibly discuss design options and/or seal the deal. I come from an advertising background and I can tell you that many businesses (big and small) need assistance with at least their ad designs. Just an option…Good Luck!

  4. Ben Says:
    July 8th, 2008 at 12:28 pm

    I added up the expenses and came up with $570 a month extra (assuming 26 paychecks a year). Where is that extra money going?

    No amount is too small. Even a dollar here or there in a jar till it’s enough to open a savings account without fees.

  5. Richard Says:
    July 8th, 2008 at 1:17 pm

    I just barely got a stay-at-home job which will let me work from almost anywhere. We’d really like to live in the small-town Midwest, but our concern is ending up in a situation like that in this post.

    If I lose my job or the company goes under, what would I do then? In Podunksville there aren’t that many job opportunities, much less so in the technology field where I work.

    Stil, when we look up the cost of living (using http://www.bestplaces.net/) and see that it’s 35% cheaper to live in rural Minnesota or Wisconsin or Michigan, it’s so very tempting. (And of course, we’d save the difference…or use it to pay for a house).

  6. Hayden Tompkins Says:
    July 8th, 2008 at 1:48 pm

    My suggestions would be:

    1. Try and get rid of that truck if possible. That’s a lot of money!

    2. Look at getting Skype ($4 a month for 10,000 minutes to anywhere in the U.S. or Canada.) My husband and I have it and we LOVE it. The only catch is that Skype doesn’t call 9-11.

    So we got Virgin Mobile pay-as-you-go phones for emergencies. They offer minute packages, but it is best to just money towards your account. As long as you add $20 a phone every 90 days, your account stays active and you keep all the money you have put on there.

    3. ELance those graphic designer skills, baby! People bid on projects and you can work for anyone, anywhere in the country.

  7. Andy Says:
    July 8th, 2008 at 3:02 pm

    You can call 911 without phone service, so that’s a moot point.

  8. Benjamin Says:
    July 8th, 2008 at 3:03 pm

    “I have never understood why people become so attached to an area with little economic promise. If there aren’t any opportunities in the town you live in, then move.”

    I can’t speak for all people but just because there is more economic promise in other others or the country (or the world for that matter) doesn’t mean we should all move! To me, my network of family and friends is much more important than the economic prospects of the area. Unless I was in dire straights (these people don’t seem to be) I would not consider moving solely for financial reasons

  9. Christina Says:
    July 8th, 2008 at 3:46 pm

    I find it slightly amusing that I always see “move” as one of the first suggestions on many finance blog for the cash strapped. First – moving costs a LOT of money and second – where in this country can you find an area with decent employment prospects but a house costing only $35,000? Generally as employment prospects increase so do housing costs, etc and one would have to be able to find a higher paying job. Unfortunately I think without a degree that might be tough. Although my views are slightly skewed as I live in a very expensive area where it is impossible to live without two very high incomes.

  10. JLP Says:
    July 8th, 2008 at 4:04 pm

    Christina,

    Go back and read the first paragraph of the email:

    I live in the midwest, in a small town with a lower-than-national-average unemployment rate and a lower-than-national-average education rate (not many degree holders here). Our town has a population of just over 4,000 mostly consisting of farmers and cattlemen. So, the job market is somewhat difficult.

    My point was that if things are tough in part of the country, then why not look for opportunity elsewhere? I realize moving can be expensive, but sometimes it’s necessary in order to find better opportunities.

  11. Pamela Says:
    July 8th, 2008 at 5:01 pm

    I definitely agree with the other posters about the phone and utilities bills appearing high. You might see if your local utility companies will do a free energy audit for you, which would allow you to pinpoint areas where you could save money.

    My husband and I are transitioning to me staying at home, because the costs associated with me working basically eat up my paycheck. I found some great information and resources on different kinds of work from home opportunities from an online article http://abcnews.go.com/GMA/TakeControlOfYourLife/story?id=2621388&page=1&CMP=OTC-RSSFeeds0312

    I think if you could bring in a little bit extra a month, and also lower your phone bill and utilities, that would give you more breathing room. Also, it didn’t say, but are you paying tuition to go to college? Is that where the excess each month is going?

    Regarding buying the house, would it cost you less to own it than to rent it? How likely is it that you would be able to sell or rent it if you did decide to move? Even if you don’t want to move now, you might want to leave that option open for later, and buying would definitely lock you in. Also, you would be fully responsible for the maintenance and taxes and such.

    I really think that if you get creative, you can make more breathing room. Also, you mentioned big expenses coming up, one of which was tuition for your kids. Are you talking about future college tuition? Honestly, I would say that if you haven’t saved anything up yet for them to go to college, you may need to let go of the idea of helping them pay. It is more important for you to keep yourself out of debt, and start planning for your future than to kill yourself trying to help your kids through college. College is important, but they will definitely have scholarship and grant opportunities if they look for them.

    Good luck! I know it seems hard sometimes, but there are lots of people out there (including myself) who have saved on less (although I didn’t have 3 kids, I did have higher rent and medical payments). You can do it!

  12. "Mo" Money Says:
    July 8th, 2008 at 6:16 pm

    I agree with most of the posters, if there is no opportunities in this place, move to where the jobs are.

  13. Jim Says:
    July 8th, 2008 at 6:53 pm

    I’d sell the truck and get something cheaper. $380 a month is a lot of your income to spend on a car.

    The $180 for phone seems pretty high. If you are spending on long distance then shop around for a cheaper long distance plan. Or if thats cell phone plans then cut back the cell phone usage and drop your minutes.

    *IF* moving is an option for you then look at the job market in nearby larger cities and see what you might get for pay then compare pay & rent in the larger city to pay & rent in your current location. You may get more pay elsewhere but rent might be more.

    Jim

  14. muddlehead Says:
    July 8th, 2008 at 8:53 pm

    you make 35k in a place where your home would cost 35k to purchase. that is too good to be true. please tell me where you live specifically. here in nor cal household income say 75k – decent home nowadays 450k.

  15. muddlehead Says:
    July 8th, 2008 at 8:53 pm

    you make 35k in a place where your home would cost 35k to purchase? that is too good to be true. please tell me where you live specifically. here in nor cal household income say 75k – decent home nowadays 450k.

  16. Bozo Says:
    July 8th, 2008 at 9:09 pm

    I cannot believe you folks are driving that F150 pickup. Those things suck gas.

    Try walking, or moving.

    Yours,

    Bozo

  17. Alita Says:
    July 8th, 2008 at 10:09 pm

    Regarding clothing: please do not go into credit card debt in order to clothe your children. There’s nothing wrong with secondhand clothing — yes, even in the tortuous waters of high school, it can be done (and has). The teens are old enough to understand going into debt for clothing vs. potential college savings. And I’m betting the little one won’t even notice.

    Regarding tuition: this doesn’t have to be the horror that it may seem. Higher education’s dirty little secret is that relatively few folks actually pay the sticker price. “Oh, Fancy College A’s tuition is $40,000 — forget it!” The truth is that most families at Fancy College A aren’t paying anywhere close to that. As college draws nearer, do your homework and join your kids in scouring the web (or your local library) for info on scholarships, grants, and so forth. Based on the info in your post, if your 15-yr old was applying this year, for example, s/he might qualify for a Pell grant. There are also “zero family contribution required at X level of income” programs at the well-funded places (Oberlin, Princeton, and many others) — if your kids have the grades, these are worth looking into.

    Research, research, research! As someone basically observed earlier, if push comes to shove, your kids can borrow $ for college. You and your husband cannot, unfortunately, borrow $ for retirement.

    Regarding saving in general: if someone put a Nerf gun to the head of your favorite cartoon character, could you find a way to save $10 a week? Maybe getting Sugar O’s instead of name brands, forcing everyone to take shorter showers/turn off lights/etc. — you know, all the little things that can somehow add up. Find a way to have some Tiny Sum automatically tucked away each month before your family even sees it. Doesn’t matter how tiny the Tiny Sum is, what matters is that it’s there.

    I agree with most everyone’s comments about the utilities/phone, but I do understand very much if the original poster doesn’t want to move. A network of family and friends is really important. Last, I applaud the OP for her effort to achieve that degree! It’s worth it. I wish you the best of luck.

  18. Matt Says:
    July 8th, 2008 at 10:42 pm

    I agree with using your graphic design skills. I’m a graphic designer and have found that bartering for services works well. Check out your locally owned businesses… gyms, video stores, grocery, whatever. I’ve also quoted jobs at a dollar amount and then bartered to get the cost down to what they can afford (so I get paid and I get a membership or something).

    You don’t mention if the phone is cell phone or land line. If you have a land line for the phone consider a service like Vonage. After purchasing the router, you can get the service for about $30-$35/mo and 911 service is included. The service can act like bad cell phone service w/ dropped call and bad quality (depends on the quality of the internet access)… but for $35/mo it’s not bad. Even if you don’t have cable internet access. Cable internet plus vonage should be cheaper than $180.

  19. So Cal Savvy Says:
    July 9th, 2008 at 12:29 am

    Moving may not be possible if local family and friends help with child rearing… so I’d suggest trying to increase your work load by teaching classes at an online institution. It would take some time intially to set up the classes, but you could probably re-invent your current teaching materials. After a semester or two it’s just the grading that would take up the most time.

  20. Steve Says:
    July 9th, 2008 at 3:43 am

    If you are planning on going back to college, then why stay in a town where the ROI on a college degree will not result in anything? The main reason for a degree is to have the potential for higher income. Even my degree in Philosophy has resulted in higher income than my HS degree alone. But that degree only went to work for me when I moved to an area that allowed me to make the earning potential for the degree. If you plan to stay, then I would hold off on the degree; if you plan to move to increase your income after a degree, then you might as well do that now so that your husband can increase his income and you can study and work part time…perhaps when the husband comes home you can work after hours for extra income. But those opportunities are only going to happen somewhere else.

  21. Lamar Says:
    July 9th, 2008 at 7:09 am

    The whole point of the thread (and what people are forgetting) is that there are a multitude of people who are just not structurally set up to succeed financially. Nothing wrong with that, it just is what it is. Moving is not an easy option for reasons already mentioned, and although it’s not politically correct to point out, three kids make traveling light and meaningful career transitions virtually impossible. A move could just as easily end in more financial stress and eventual divorce.

    These are the working poor. They’ve set themselves up this way by certain chronological behaviors (putting kids ahead of education) and values (SAHM). Which, again, is fine. It just means you’ve sacrificed financial independence for these family values.

  22. Dave Says:
    July 9th, 2008 at 7:52 am

    Has anyone considered distance learning via the Internet? There are numerous accredited colleges and universities offering bonafide degrees, and you don’t have to burn gasoline to get to a campus. All you need is the motivation, self-discipline, money for tuition, and a decent Internet connection and computer.

  23. CBus Says:
    July 9th, 2008 at 9:47 am

    If you must stay in your area….I’d encourage you to buy the house you live in now. It would save you over 17k a year!!!!!!!

    Even at 8% APR, a 30-yr 35k mortgage will run about $260. Put the $140 you save NOT renting and put in a high yield savings account.

    Maybe no $17k (considering PMI and prop tax), but you at least break even, and build equity.

  24. Pamela Says:
    July 9th, 2008 at 10:41 am

    Lamar,

    I think the point of this and many other websites, and particularly the original post “You Can Build Wealth Even if You Don’t Make A Lot of Money” is that even making choices like kids before education and having a SAHM, you can still succeed financially. Now, having made those choices, your definition of success may be smaller, but you have also set yourself up to need less. There doesn’t seem to be anything structurally wrong with the lady’s life or lifestyle, other than apparantly high bills and a need for some more creativity. There are people who have a SAHM and a husband who didn’t finish college who are succeeding financially, by which I mean they are putting money away for emergencies and for retirement. My husband and I just made the choice, actually, to move to me being a SAHM (we are about to have our first). We don’t have degrees, but we do have have brains and resourcefullness, which can take you far. We had to really sit down and figure out how we could have the life and values we wanted while not sacrificing our peace and future. It can be done, and I think that this lady wants to have have that, and has every right to succeed if she and her husband and family work for it.

  25. Frugalicious Says:
    July 9th, 2008 at 11:23 am

    I agree with the argument that moving expenses can be expensive. Regardless, you may want to consider having your husband look for a job elsewhere. If a prospect comes up, you can “borrow” from your credit cards to cover the move if the job opportunity looks very lucrative. Then you can make it a priority to pay the cards off immediately. Even though the card limit is low, you can call and request an increase. Estimate the moving expenses and request a limit to match it. This is risky, but if you are good with your money and ensure the credit card is paid off as fast as possible it is an option.

    Here are some other ideas:
    Seriously, your phone bill is high. If you “need” a cell phone get a pre-paid phone like one from net10 (https://www.net10.com).Otherwise consider digital phone like Skype or Magic Jack. If you do not have the internet for digital phone, find a cheaper cell phone family plan and use that for your main line. That move alone can save you over $100 a month.

    For food, consider angel food ministries (http://www.angelfoodministries.com/about). For $30 a month you a get a nice box full of food. See if there is one near you. If you live near farmers, I would suggest offering to barter with them. Perhaps babysitting, or some work on the weekends for food. I think you would find they are open to the idea. Make it a goal to reduce your bill down to $200 a month with these changes. Most importantly take a close look at food waste. It is amazing how much one throws out.
    To reduce your car gas bill, and perhaps some auto repair bills, consider having your husband car pool to work. You live in a rural area, but it may be an option. He can contribute to gas for the driver. If he commutes everyday, this could reduce your car gas bill in half – maybe more.

    As for your utility bills, invite the companies to your home for an audit. Make note of their suggestions and talk to the landlord. They might be willing to do some upgrades. You can guise it under updating the home for resale. Then again…they might careless. Regardless the cost is nothing to you. In fact some of their ideas may be something you could incorporate very inexpensively.

    Regarding your rent – it is very low; see if you can get it lower. Again, barter with the landlord to see if they are willing to reduce it. Perhaps some housecleaning for them, or babysitting. Maybe they own a business and with your graphic design skills you can create some logos for them.
    I think you have more options than you think. Just be creative. You can do it!

  26. KMG Says:
    July 9th, 2008 at 11:24 am

    Growing gardens is a lovely idea, but it is expensive if you don’t have the supplies already. Buy used, buy seeds if you can instead of transplants, and see if any locals would be willing to help out by donating extra supplies to you, or sharing knowledge when you run into problems.

    Another idea that may or may not be relevant to the original poster’s lifestyle: eat less. Most of America is overweight anyway, and the food we buy is unnecessary crap. Someone above mentioned buying generic sugary cereal as a financial tactic … seriously? Why waste your money on nutritionally-devoid crap when a bulk purchase of oatmeal is more nutritious, more filling, and just as cheap if not cheaper? Maybe because the kids whine if they don’t get it? Tough cookies, kiddos. Mommy and Daddy are trying to prevent diabetes and gastric bypass when you get older.

    I think the post was referring to college tuition for the husband, but if it was referring to the kids’ tuition, consider this: I got my college degree for free. I studied very hard in high school and got good grades and test scores, did the other necessary things that colleges like (held an after-school job, participated in extra-curricular activities, volunteered, took AP classes) and got a full tuition scholarship from the state university. I was a smart kid but no genius, so it’s not that I was somehow exceptional. I worked part-time to support myself and graduated with no student loans. It can be done if the kid is reasonably bright and hard-working.

    Good luck!

  27. bhath Says:
    July 9th, 2008 at 12:27 pm

    I don’t see why this is so difficult. I think the main problem is not the moving issues. It’s the reluctance to sacrifice anything for long-term benefit.

    Try the below and you can save up $2700 in a year. This doesn’t include selling your truck and getting something more responsible. (that will probably double the above number)

    My thoughts:
    1. (Annual Savings: $1400) $180 for phone is R-I-D-I-C-U-L-O-U-S. Ditch your cellphones & Broadband Internet and keep only 1 landline phone in the house. Use Dial-up Netzero for free. It’s a sacrifice, but you NEED to SAVE more. And people have been doing this for -years- before all this new stuff came along. Deal with it.

    2. (Annual Savings: ~$500) Buy some fans and shut off the A/C. This will save you hundreds of dollars every year. If this is too drastic, change the temperature by 1-2 degrees to reduce the A/C or heating in the winter

    3. (Annual Savings: $480) Make a list of everything you will cook for 2-3 weeks. Write down the ingredients you need. When you shop, ONLY buy what’s on this list. THis will seriously save you at least 10-15% off your grocery bill.

    4. (Annual Savings: $360) Try buying store brands for somethings. You can shave some money. May not be as good of quality, but you need the money more.

  28. JLP Says:
    July 9th, 2008 at 12:41 pm

    bhath,

    I would only cut the high speed internet if they’re not going to need it for work.

    The rest are all really good points.

  29. Jon Says:
    July 9th, 2008 at 2:25 pm

    Total listed expenses: 380 + 130 + 195 + 35 + 40/4 + 100 + 87 + 400 + 180 + 400 = 1917/month

    Income: 2300/month (not including 3-paycheck months or teaching income)

    There are probably some expenses you didn’t list, or else you’d already be saving $400/month, which is pretty good. For instance, you didn’t list your tuition fees, a budget for clothes and school supplies, Christmas and birthday gifts, yearly expenses like car property tax. Since $400/month is almost 20% of your take home pay, you should probably sit down and make a more thorough list of your expenses.

    Now let’s look at what can be cut.

    The electric bill of $195/month sounds high for a small house. Add insulation, seal the windows, get a hot water tank insulating jacket.

    The car is an obvious expense but you didn’t say how much you still owe on it. If it’s almost paid off, keep it. You obviously bought it used (I haven’t yet seen an 8+ year car loan), so *maybe* the depreciation isn’t too bad since you bought it and you could sell it and buy a much cheaper car. (Heck, you could buy a brand new Corolla and still have a much lower payment.)

    The $180 phone bill is high. You must have a line for each teenager, or you are using too many minutes, or you are calling long distance on a land-line. All of those problems can be solved to lower the bill significantly.

  30. Concierge Says:
    July 9th, 2008 at 4:36 pm

    I agree with the recommendation and comments to consider moving and to question some of those other expenses. Instead of seeing those expenditures as necessities it is time to see if they can be treated as opportunities to free up cash (such as that high phone bill). These are times when more radical thinking is needed.

  31. steve Says:
    July 9th, 2008 at 8:17 pm

    re: the phone bill

    If landline long distance is any part whatsoever of that bill, you might consider using something like pingo.com for long distance. You just open up an account online, prepay a certain number of dollars, then when you use it it’s 1.9 cents per minute anywhere in the US if you use a local access number, and 2.9 cents per minute if you use their 888- access line.

    Also, echoing other posters, it will absolutely be necessary for this lady and her husband to start tracking all their spending and income. It’s a better way to save money and be in control on their income.

    I think their choices in living where they live are fine. They may want to change, but maybe not. Some people have families that have lived in a place for generations (i’m one of them) and like it for many reasons. But certainly, if they haven’t considered moving, it’s worth at least thinking about.

  32. Tom Says:
    July 9th, 2008 at 9:14 pm

    I can see how some people can’t save money but I agree that 100% of the time, there are ways to change the budget. As you mentioned, most people DON’T think of changing big ticket items like their house or car. It’s almost as if people have the mindset that they are glued there and there’s no changing it. C’mon people, stop becoming attached to things and make changes to help better your financial health.

  33. Dan Says:
    July 9th, 2008 at 9:28 pm

    $180 phone bill? That’s 8% of your monthly income. 8% is too high for your income level. Whack it. Sell the F150 and buy a hoopty, you cannot afford the payments; its 17% of your income! Sell it. $195 for electricity? It’s 1,200 sq ft of living space! I live in the deep south and have 3200 sq ft of air conditioned space and spend $235 a month in the summer. Insulate it or move. $400 rent is right on for your income level; roughly 25% of take home is good, you’re at 17% Credit cards? Credit score? You cannot afford a credit card! You cannot buy yourself into wealth. Wealth is not built on debt. Stop using credit cards, right away. Credit score? How important is that in the grand scheme of things? Really? The issue for your family is a lack of income based on location and vocation. Get the college degrees and move out of your location. I’ve moved 13 times since college, both international and domestic, and I’m not referring to Canada as international. Stretch beyond your comfort zone. Get out there and mix it up with the world. Worrying about school clothes and supplies and paying off the debt is not a good way to live, honestly. You guys have to get radical in your pursuit of income. You have less a budget problem, and more of an income problem.

  34. Sam Says:
    July 9th, 2008 at 10:41 pm

    Moving to another place with better economic progress as first work-around is not that idea considering the cost involve and the adjustments you would have to take when you’re in the new area. Perhaps your husband would have to find a new job, a new place to rent, new schools for your kids (they might have higher tuitionfee rates as compared to lower income cities) and these would mean higher cost.

    I suggest that idea given above by another reader, why not take advantage of the Internet to earn money? Giving your talent, there are lots of opportunities to earn side-line. Heck here in the Philippines, most of my freelance job (web development) are from Chicago area and I get paid via paypal. There are also people who turned pro-blogger and now quit their full-time job and concentrate on blogging. Again..all these options does not require you to move.

    Finally, pray for God’s direction in your life :)

    Mabuhay!
    Sam

  35. Focus On Your Money Maker Says:
    July 9th, 2008 at 10:47 pm

    This is a common problem for most of America. My suggestion would be to sit down with someone that has a similar situation as you but they have found the ability to save. See if you can learn from them. Most people would be glad to share their tricks with you.

    The other trick is to see if you can turn a hobby into something that can make you some extra money. I knew a lady that made a few thousand a month extra by selling poodle skirts on ebay. She had started out making them for the local high school girls for the high school dances that were a throwback to the 50′s and 60′s. She realized she could sell them online and quickly made a lot of extra income with her extra time.

  36. Alita Says:
    July 10th, 2008 at 12:18 am

    Everyone’s given superb advice. I’d like to add a suggestion in the vein of ‘little things that can add up’: borrow “The Tightwad Gazette” (TG) from your local library. You can either make more (which you’re laudably and ultimately trying to do by obtaining college degrees) or spend less, and some extreme measures in that latter vein might pay big dividends. The TG is stuff with nifty how-to extreme measures, but really, it’s not about washing every last Ziploc bag. It’s about deciding what you value enough to actually spend your hard earned money on.

    Some further thoughts on higher ed:

    -Oberlin (small college in Ohio) eliminated loans for students under certain income levels. I don’t know how they figure family contributions. Most if not all of the Ivy League expect zero family contributions if income is below XYZ level.

    -the University of Washington (and probably many other state universities) has a program where if you qualify for admission but are below a certain income level, your tuition is covered. Washington is also part of a consortium of states with reciprocal tuition agreements. My point is, when the kids get to the research state of figuring out where to go and where to apply, I bet a nickel they’ll have a lot more options for a reduced or free education than you think.

    Best of luck!

  37. Stacey Says:
    July 10th, 2008 at 12:44 am

    The teenagers are old enough to babysit or cut lawns. They can buy school clothes w/their own money and the extras they might deem they “need”.

    Mom can do daycare at home…

    Dad can put a plow on his truck for extra money in the winter.

    Voila! Extra income

    PS If dad has a 401k matching opportunity at work, he should be taking advantage of that “free” money!

    Get those degrees!

  38. Stacey Says:
    July 10th, 2008 at 12:48 am

    I forgot to say she should look at Freecycle or FreeSources in her area by Googling for local groups. It’s a great way to get FREE clothing and household items!

  39. Chad Says:
    July 10th, 2008 at 1:23 am

    SELL THE TRUCK!! and find a cheap garage sale car you can pay cash for (take out a small loan to cover the difference if your upside down on it) Pay off the credit cards and CUT THEM UP! Both of you need to pick up a couple of extra jobs temporarily… Keep the house, thats not the problem.. I see TOO much lifestyle.. TOO much going out in monthly payments. If she didnt have such a high phone bill, that outrageous truck payment (along with the full coverage insurance), the credit card payments, They’d definately have more wiggle room and wouldnt feel like the world was trying to crush the life out of them. I aint saying to bust your tails forever, but for a year or two while staying focused to clean up this mess will go ALONG way. I was once in the same boat (21k year salary but I was single) and I was BROKE. But, I got on a plan, cut out anything that wasnt necessary for a while, worked until they turned the lights off on me so I’d go home. I used the debt snowball on my debts. I had to tell myself a new word… “NO! You CAN’T buy it right now” Now.. here I am, 19 short months later… I am completely debt free and not a payment in the world (except my apt rent of 412.00/mo.), I have 6 months of living expenses in a money market fund just for emergencies. (around $6000.00), Have about $1400 saved for the inevitable car repairs or eventual replacement (not for if I need it, its when). Finally current on my utilities.. (for the first time EVER!) Have $1600 invested so far in a ROTH IRA and an additional $1600 invested in index mutual funds in a taxable account for a house down the road so I can get out of this apartment some day. I put 400 a month in to the ROTH and try to match that in the index fund account I call the “House Fund”. Anyone can do this. When I started in Jan of 2007 I was around around $11,000 in total debt, had about $8 in a cookie jar and roughly 74 cents in my checking account, behind on all my utilities by at least a month. I was making 9.25/Hr.. I just got sick and tired of being broke and scared, so I made drastic changes. Luckily I was able to get a raise during this time and now make 9.75/Hr.. continuing to folow the plan and my personal “economy” is sitting pretty good.

  40. Anne Says:
    July 10th, 2008 at 7:37 am

    I agree with other posters about the phone bill, $180 is extremely high. Skype is a great alternative. Something else to consider would be working at the local school. I did this for several years because it allowed me to be home when the children were home and bring in extra money. I recently sat down with my budget and went through everything with a fine tooth comb. Switching auto insurance companies saved $400 a year! I use the sub-account feature at ING to budget for upcoming expenses such as property taxes, new snow tires and heating oil.

    Finish your degree! I took advantage of an adult degree program which allowed me to study from home and be on campus only one weekend per month. My salary more than doubled after I left my school position and I also live in an area with a difficult job market. I have the flexibility of working from home at times, which is great.

    Be creative, look at all the options.

  41. Mincot Says:
    July 10th, 2008 at 8:28 am

    I agree about the phone bill–very high! For clothes, I assume you’re buying at thrift stores first? (I teach at the university level and I haven’t purchased full-price clothes in years.)

    Since you have internet access, what about beginning an online graphics and design business?

    And yes — move!

  42. Penny Says:
    July 10th, 2008 at 11:13 am

    Tuition? In a small midwestern town? What kind of tuition?

    If you are the “arty” type, perhaps there is something you can do to make and sell on ebay or etsy…or what about your husband..what is his creative niche?

    What about substitute teaching?

    For phone service, check into http://www.ooma.com…sort of like skype or vonage, maybe a bit cheaper or more versatile.

    Ditto on the garden. Ditto on jobs for the teens.
    (and have them go to http://www.getrichslowly.org and read the new post about job vs. career. VERY important advice for them as they begin their work careers.)

    Visit http://www.daveramsey.com or get his books from the local library. They have been a huge help to our family. All the children would benefit from these as well. You will be inspired by the stories of people in worse circumstances than yourself and what they’ve managed to accomplish/save/pay off. Gazelle like intensity WORKS!

    Once you REALLY start digging, you can find ways to save. You may not WANT to change from the status quo (we are now struggling with making the commitment to start doing our own yardwork, which the dh HATES) to buying what we need to do it ourself. Our savings would be about 1200.00 a year. Oh wait, I think I just made the decision.

  43. Jill Says:
    July 10th, 2008 at 1:35 pm

    Renters insurance at $87 a month seems extremely high. I live in the midwest (Missouri) and pay that for homewowners for a year. When I rented, renters insurance was always under $300 for the year.

  44. Deb Jones Says:
    July 10th, 2008 at 9:30 pm

    I have a radical idea. Please give some money (1-10%) to your local church or charity and watch the blessings / opportunities flow. Expect miracles in your finances. The law of sowing and reaping works. Plant seeds now.

  45. Rob in Madrid Says:
    July 12th, 2008 at 1:54 pm

    Skype does call 911 but it doesn’t give you address so they have no way of knowing where you live.

    I just picked up a copy of the tightwad gazette from Amazon.de 4€ plus 3€ for shipping.

    I have to admit that I was skeptical of tithing but it really does work, things have turned around since we’ve started giving tithe.

  46. lynne Says:
    July 14th, 2008 at 7:22 pm

    I always pay myself first. Money that goes into savings and never gets in your checking account is easily forgotten. We all learn to live on our income, so pay yourself first! You don’t have to put 10% in the bank each month, but I would start with 5% plus save all change and bank it every 2-3 months. You’ll be surprised at how quickly even small amounts add up. The phone bill is way to high. Cut back on what you spend on groceries. Quit using convenience foods, they waste money and aren’t nearly as nutricious. Plan ahead and you’ll find you don’t have to be a slave to the stove, but you can eat well and for less. I wouldn’t jump up and think about moving. That may not solve your problems at all. I’d look for a way to make extra income. If you take a newspaper, stop–change cable or satellite TV carriers (new accounts get great offers, just don’t lock in for more than 6 months.)

  47. jack Says:
    July 21st, 2008 at 6:13 pm

    Please don’t take this the wrong way but I want to question your college goals. I firmly believe that done right a college degree pays for itself many times over the course of your earning years. However, think twice about the degree you are getting. I’m sure Art is a fine field and a lot of fun (especially if you are talented), but a technical degree is probably worth double or triple the salary of an art teacher. There is a reason BS degrees are worth more than BA’s in the business world.

    I’m not trying to sound elitist because I got a BA degree. It took me no time at all to realize that my economics degree wasn’t worth the cost of the paper it was printed on in the real world. I went back and got a CS degree and have been much more employable ever since.

    I’m sure everyone who is a talented artist would like to get paid for their abilities, but the supply far exceeds the demand, thus eternally low wages even with a degree. Food for thought….

    Oh and BTW, my BS was much harder to get than my BA.

  48. editec Says:
    August 24th, 2008 at 1:07 pm

    It’s the arrogance of the new adults who have like no vested interest in any place, no mortgage and so forth, to simply assume that everybody can just move to a place with greater opportunity.

    By the time most people realize that the place they’ve invested their time in is dying a slow economic death, it’s often far too late for them to just pack it all in and leave.

    Of course explaining that to kids who are fresh to the world possible making their first adult paychecks and feeling so smug about their chances and as yet completely unencumbered by lives they’ve already invested into is somewhat difficult.

  49. Loretta Says:
    April 9th, 2009 at 12:26 am

    First, get rid of the phone bill. Do you have high speed internet? If so, you can get a majicjack phone
    device that plugs into your computer. Then, you can make all the calls you want, local or long distance and talk as long as you want for $18.95 PER YEAR!!
    The device costs only about $40.00 to buy and there are no monthly charges. Next, get a cheaper vehicle and save not only on the payments, but on the insurance as well. If you can find a cheap one for cash then you don’t have to pay for full coverage insurance. For gasoline, see if your husband can find someone else who needs to carpool
    and charge them gas money to haul them. I would also shop around and find cheaper renters insurance. You natural gas bill is high also, so I’m assuming your heat is gas. Mine is too, but I bought a medium size electric heater and don’t even have to use the central heat at night. If you’re paying college tuition, find another college. The one in my town offers free tuition for anyone whose income is under $40,000 per year. I’m sure others do also. Buy clothes at thrift shops and garage sales. Next, buy your home. You won’t find anything any cheaper and if you are a first time home buyer, you will get an $8,000 tax credit next year. You could get most of that in a refund. Either let your 15 year old baby-sit this summer for you so you can work or let her get a paying baby-sitting job for someone else. Next, how are you figuring your husband’s income? If you multiply $1150. x 26 weeks (he is paid bi-weekly) you only get $29,900 per year, not $35,000. Add your income to it and it’s still only $32,300. I don’t know where you live, but in my state, that’s very close to qualifying you for food stamps with a family of 5. And don’t forget to take the educator’s credit when you do your taxes. Also, check and see if your income is low enough to get assistance with mortgage payments. HUD not only helps with rent, in some cases they help with mortgage payments. There are also grants out there for down payment assistance. Maybe you don’t like charity, but you have probably paid taxes for years, so why not take advantage of the benefits? I commend you for wanting a better education,but don’t commute to do it. Most of your classes can be taken on-line. My daughter-in-law got her doctorate that way. I agree that you should put your skills to work on-line or try to barter your skills. use some of the money you are saving for life and/or disability insurance. You or your family will need it to pay the bills. Keep one credit card for emergencies ONLY and pay cash for the rest. If you can’t pay cash, don’t buy it!!!it is expensive to move, so if there are no jobs in your city, MAKE ONE! Consider opening your own business out of your home. You husband works in construction, does he take on side jobs as well and build things for friends or neighbors? If so, then he can deduct a percentage of his car insurance and maintenance & repair bills. He can also deduct all his supplies or tools and if he does paperwork at home, he can deduct office-in-home expenses. Prepare your kids a school lunch instead of letting them buy their lunch. If you need help with groceries, but don’t qualify for food stamps in your state, there are social service agencies that help every three months. I work for one of them. Is there a United Grocery in your area? Antibiotics are free for anyone there, regardless of income.Also,see if your furniture and household goods are worth the $1,000. per year that you are paying for renter’s insurance. I furnished my son’s whole apartment when he moved up here for $35.00 at garage sales.
    Are you hooked up to cable? In most places, satellite is cheaper and if you really want to save,you can buy the convertor box with a government coupon for $10.00 and don’t have to have cable or satellite. Also, use grocery coupons when you shop for groceries. It saves a bundle. Don’t buy convenience foods. Get things you have to cook. It’s much cheaper. Our agency helps people every day who have to learn how to cut expenses and we help with that and help in finding a job. Look for jobs on the internet, not through an employment agency. Tell your husband to advertise for side construction jobs. (Advertising is deductible also.)Last, but most important, tithe to your local church. It’s true what they say. God’s blessings will pour out when you give him what’s his. I am divorced and on minimal Social Security plus a minimum wage part-time job
    but, because I honor God and give Him what’s His, I have enough left over to help other people. Good luck and God bless you.(Dave Ramsey is the best financial counselor I know and you can access his info at daveramsey.com .

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