At the close of 2009, I became a divorced single mother of two girls, and I was inches from losing our home. Something had to change quickly.
First I established short term goals: (2 years or less)
- De-clutter and make extra cash: Sell extra stuff in consignment shops, ebay, amazon, etc. Put this money away.
- Get the house to sell or refinance with a loan modification due to the house being severely underwater (it sold in short sale)
- Find a new place to live (rent had to be less than ¾” what my mortgage payment was (600-900)
- Get 3-6 months safety net built up in my savings. (6-10,000 or so)
Then I looked at my monthly bills and potential bills:
- 1. Cellphone: 100 for two people.
- 2. Cable- 0.00, no netflix, no hulu, no nothing.
- 3. Traveling Internet- Hotspot 52.00 per month.
- 4. Gas and electric: 130.00
- 5. Home/auto/umbrella insurance: 140.00
- 6. Medical/dental: 70.00 p/w
- 7. Life insurance: 35.00
- 8. Car payment: was 365 p/m and refinanced to make it easier to pay at 260.00
- 9. Rent/home- 835
- 10. 401k through work: 65 p/w
- 11. 100.00 on Credit card (with credit limit of 5,000)
- 12. Gas
- 13. Grocery
- 14. Others (ie kids tuition, sports, camps, entertainment, gifts, etc.)
#1-11 fixed monthly total: $2192
Total monthly take home pay: $3400.
#12-14 + savings and adjustable fees/bills: $1208
I decided to go for “savings broke,” where I would hide money from myself in bonus/higher interest accounts with prepayment penalties as a method for saving for things and not being able to take from it.
I opened 6 of these accounts (one HSA, and 5 yearlong penalty withdrawal savings) and put 5-20 in each a week on payday totaling: 65.00 a week or 260.00 per month. After a year I use this money to pay for sports fees for my kids, camps, Christmas gifts, medical copays and deductibles, and any weekend trips we decide to take, while taking a portion of it and restarting the accounts for the next year.
Next, I opened a separate checking and savings for which to run my internet sales and consignment sales through so sales and shipping costs would all be in one place. This is a special savings, that I do not touch unless it is an emergency. This is funding and building the emergency fund. I started this in November of 2011 and have 165.00 saved up to date.
The remainder of my money, the roughly 950.00 left a month goes to the following:
After school care: 50-60
Hot lunch at my kids school: 100
Piano lessons: 60-80 per month.
Gas: 200 at least, per month.
Groceries, gifts, entertainment, school supplies, etc, and some dining out: 510+(hence the reason I am fighting to pay off my credit card.)
I use my tax return money, although an interest free loan for the govt, to pay my children’s tuition, enrollment, and computer fees for school for the next year and pay down any debt I can with the remaining balance. As the costs of living rise more sharply than pay does, I am getting squeezed to the point that sometimes I wonder for how much longer can continue like this. But this remains our budget. Like many families out there we are surviving on one income. Like many other families we have good days and months and bad ones. But I find that I feel very luck and fortunate that I can support my children on my own without government assistance.
My children and I are also minimalists and environmentalists. We buy our food seasonally and locally at farmers markets and produce stands, we do not eat a lot of readymade and pre and individually packaged items, and I jar, can, freeze, and bake most of the food and meals we do eat and use, including pasta and bread, salsa and spaghetti sauces, etc. We do not use paper napkins, or plates, or cups, or much by the way of disposable items and I also cut coupons and try to match them with sales for a little added bonus. The amount of money I save a grocery trip given the above probably ranges from 50-200.00 depending on when and how much I would be buying at a time.
Budgeting/financial software I have tried:
Mint.com- it was OK. I found it to be too much upkeep for what I wanted out of it.
Outright.com- this is great as it is linked with my online selling accounts- and I only used it for my “business accounts”
Creditkarma.com- this is OK. Really I just want to see what changes and when.
Lemon.com- great for storing receipts, but a lot of upkeep.
Paypal.com- is great for sellers of online goods. Safe to buy and sell.
In conclusion, although I miss my two income splurges like pedicures, and eating out a lot, and buying nice things, I have found that we appreciate more and are happier with less. We spend our money on memories and day trips, instead of toys and trendy things that fall by the wayside. Money is about security, money is the catalyst for both prosperity and demise of a person, a relationship, or a family. And while I believe that I would rather sacrifice stuff for savings accounts and 401k’s etc., I also know many who cannot and don’t choose what I do. And that is OK. My story is just here to help give ideas to those who may want a change but don’t know the options that may work for them, or what is available. Good luck to us all keeping our heads afloat.