Yesterday I got a very personal email from a long-time reader, who wanted some advice, and some help:
I was wondering were you as frugal? I’m asking because we are a struggling family of 5 and we (my husband my 3 kids and I) we are about $10,000 in debt and we have been living with my mother …enough said … I currently do not work because our children are under school age and it would be far to costly to end them preschool. my Husband works but work is very slow …my debt includes credit cards broken phone contracts and an outstanding broken lease that I let a friend use my name… .do you or your reader’s have any advice on becoming debt free and financially stable? – At Witts End in Arizona.
I sat back after reading that and flashed back a few years to before I even started to blog. Was I ever this frugal? Yes and no – I will be completely candid in saying that before I started my blog, we just spent – aimlessly……. Dave and I both worked full time outside of the home – I worked for the Department of Defense for a good 8 1/2 years, and I had a great position with an even better salary – I was basically my own department head, and had some great relationships with folks in the community.
After my son (2 1/2 years) was born, I realized that the money I made working outside of the home would greatly be reduced by the cost of daycare – after all……. $300 a week per child is really just an unbelievable amount.
When we made the decision for me to remain home with the kids, it came with a tremendous amount of planning (and sacrifice) on both of our parts.
- Sat down to determine what money was coming in, we made a list of all of our expenses (debt, and recurring monthly expenses)
- We determined several areas we could eliminate expense – we eliminated cable, I downgraded my phone to just basic talk and text (as did David), and we scaled back clothing purchases – in addition to many other areas:
We used FREE Redox and FREE Blockbuster codes for movies in lieu of movie theater prices
We sold several items we had at our house that were no longer being used to earn some extra dollars
Dave volunteered for more Army missions on an as-needed basis with his unit (when funding was available) – when that was not an option he found odd jobs to do for folks around the community (landscaping with his father, etc).
- One of the biggest sources of inspiration was Dave Ramsey’s Book “The Total Money Makeover” – I requested from the Maricopa public library system and listened to Dave online and also on his radio show evenings in Phoenix on 92.3 KTAR.
- We established a budget – based on what we were bringing in – any extra hours Dave worked went towards the “pot” that we used to pay down what we had.
- Lastly – the grocery budget was one area that we were very undisciplined at keeping at bay – we stopped eating out, and eliminated quick stops to the gas station/Walmart for small, minor things and made a very big effort to eat at home whenever possible.
Dave Ramsey’s Total Money Makeover not only gave us the inspiration and motivation to keep going……. it also gave us the simple steps we needed to learn how to eliminate our debt bit by bit. I can’t say it was easy – it took some sacrifice.
The biggest thing we had to conquer was determining “NEED” versus “WANT” – many times, we get so wrapped around those things that we believe will make our life better, yet aren’t necessities in the long-term. By sticking to things we needed we really noticed a profound difference in our budget.
Although we are better now than we were 3 years ago, I am still just as frugal now as I was then – you won’t find me at the Target Toy Clearance… and I still make my own detergent, use cloth diapers, and dress my kiddos in hand-me-downs – we try to use our extra money to fund our kiddos college funds.
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Perhaps you can chime in on what has worked for your family – is there anything that you did that worked for a similar situation?
Michele Higgins says
I think many of us have been where Wits End in Arizona is currently. When my
babies were little I remember thinking, if someone would just give us
$10,000 we would be ok. Sure it would be great, but unfortunately we
were never gifted the money so we became a cash only family, not even
owning credit cards. If we don’t have the cash, we don’t buy
it….period! We believe in driving our cars until they won’t run
anymore, even if they are ugly, thrift shopping, and selling items we no
longer use or want. However, our grocery budget was out of control
until a year ago. I would spend $500 at Costco and then an additional
$100 at the grocery store every two weeks. $1200 a month for a family of
five to eat. Then I learned how to coupon. Couponing became a
game/hobby for me and last summer I spent every day building my
stockpile. I no longer go to the store without a plan and have reduced
my grocery bill dramatically. In fact, for the last two months I have
only bought dog food, dairy, fruit/veggies and meat at the store. I
currently spend $50-60 a week on groceries and have enough school
supplies and toiletries to last approximately 2 years. I look at my old
spending habits and am amazed at how learning to coupon has transformed
my family’s life. Good luck Wits End, you can get out of debt with
dedication and hard work! PS…..While I have a nice stockpile, I do not
clear shelves and I believe the best place to coupon is CVS!
Barbie Berry says
We went through a really rough time 3 years ago. I had quit working to stay home with our four kids. Our oldest was having serious issues which we discovered was a form of autism. Giving up 40% of our income was harsh. I started listen to the Dave Ramsey books on CD borrowed from the library last winter. I was so inspired that I bought the Financial Peace University CDs from CraigsList in December. Those 13 discs are my prize possession!
We have a zero dollar budget system, every dollar has a purpose. Before my husband gets paid every dollar is assigned. Since he is paid every two weeks it is hard to say on this day of the month a bill will be paid. I worked it out so we pay ahead of when the bills are due… I even get to skip a bill here and there because of paying them every 4 weeks, which is not the same as paying monthly:) We learned our lessons about credit cards so those are no longer an option for us. I use cash to buy gas, groceries, church offering, gifts and other things that come up on occasion. Our first priority was to put $1000 into our savings which is baby step 1:) It took us nearly 3 months to save that money but we did it! It means lots of sacrifice but it’s worth it. We were also able to pay off the car 6 months sooner!
I have worked with a few others on how to set up their bills to help get them on track:) Just remember that the basics need to be covered before the credit cards/debt. Don’t let the creditors make you feel bad. Once you can get the basics covered and emergency fund in the bank then tackle the debt. Sometimes you can settle some accounts for pennies on the dollar.
We do a number of things that Sheryl mentioned above as well. I wish you the best of luck!
MJ Taylor says
Don’t use disposable items. Paper towels, paper plates, razors, etc. cost money even with coupons and are not a “need” and bad for the environment. Use old rags/clothes or towels torn into pieces to clean with and dust. Borrow your husband’s electric razor or invest in one. Re-think your beverages. Water is free out of the tap, bottled is a luxury. I’m not a fan of tap water (fluoride, prescription drugs, etc.) but short term it won’t kill you. Soda’s, juices, etc. should be out as they do add up very quickly and offer nothing your body needs. Juice is nothing more than pasteurized sugar water and your kids should be getting their nutrition from whole live enzyme rich fruits. Starches fill you up – rice, beans, potato’s, etc. Crockpot soups will go far, so google recipes. Ditch all convenience foods. Buy fruits and veggies in season, and like the others say, plan your meals around what is on sale. I am vegetarian and buy different fruits/veggies every week depending on what’s on sale. Don’t ever go to the grocery store without writing down what you are going to buy and how much it will cost. Impulse buying, even WITH coupons, can add up quickly. This is a hard one for most people, but re-think your transportation “needs.” If you can bike or walk, or get a monthly bus pass, do it. I bike to work, yes even in the hot summer. My car broke down and it’s a huge repair bill that I have to save up for. I am overweight and I have a big hill on the way to and from work, but you do what you have to do. Now that I have been doing it for a couple of months, I won’t go back to driving to work. It’s good exercise and saves me gas. Seek emotional/psychological support from family/friends/church/wherever. It is tough being down and out financially, and having someone to help prop you up now and then will help you keep your head high above the water. Above all, be frugal even when things get better for you financially, because you never know when you might go down this road again.
Michelle Bojorquez says
I have been there, I have never read a book or sought professional advice, we just sat down together (note this is a team effort) and put all the cards on the table. Before we to or buy anything we decide is this a need or a want. A need is a roof over our head and food on the table. One of our biggest jobs as parents is to teach our child to be responisble by showing responisble behavior.
1. I would sit down and make a budget actual expenses, grocerys cost of living, etc. excluding debts, then with what you have to pay the debt call our debtors and make arrangements to adjust your required payment to an amount that you can pay.
2. look for part time work, babysitting, waitress on the weekend, etc. use 1/2 the money for additional pay down and 1/2 in the bank (for months you are short)
3. When xmas and birthdays come up, look at kid made homemade gifts, etc. (this stuff adds up)
4. elminated excess bills, eating out, landline if you already have cell phones, unnecessary trips in the car (gas), etc
5. Decluder.
6. make a plan, 1 month, 6 months, 1 year. debt paid by?, move out by?
7. note: if you dont have a degree, this might be a good time to get one, file for financial aid, you can do classes online and make a little bit of money, and when your kids are in school you can walk into a better career.
3 yrs ago I lost my job when I was pregnant, then medical problems both for me and my daughter, she now has health problems that babysitting to work is not the answer, we live on one income, are debt free, and I go to school online, I plan to graduate with my bachelors degree the yr my daughter is in kindergarten, with that extra income we are going to put money away for the kids college, our retirement, and move to a bigger house. We once depended on 2 incomes, in a split second it was reduced to one.
two big things:
1.it’s a team effort, if you both are not following the rules, you will fail.
2. no new debt, if you dont have the cash, you dont buy it.
good luck, if you have any question, please ask.