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Subject: |
Examining One Family's Stay-At-Home Budget |
| Date: |
2001-06-18
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EXAMINING ONE FAMILY'S STAY-AT-HOME BUDGET
By Cheryl Gochnauer
Recently, I received the following e-mail: "Have you considered sharing your
'stay-at-home mom's tight budget' with your readers? I would be very
interested in reading it."
There are lots of practical steps a family can take to bring their finances
under control and unlock the door to Mom coming home. I'll be happy to let
you peek at my own budget, to get some insight on living frugally. You may
say, "Gee, that's a lot of work for such little return...", but keep
reading. Consistent cost-cutting over the broad scope of your finances can
reap significant rewards.
The secret to pruning your budget is mastering the ability to separate wants
from needs. Got your highlighter handy? All right...on your mark...get
set...SAVE!
We sold our financed vehicles and bought two reliable older cars for cash.
Even with the occasional breakdown, the overall cost is still less than a
monthly payment. Because our cars aren't mortgaged, we carry only liability
insurance, which slashes premium costs.
By securing a no-fee mortgage refinance, our monthly house payment dropped
20 percent, with no out-of-pocket expenses. All it cost us was time - a few
phone calls to go through the application process, then a short drive to the
mortgage company to sign the papers.
A home equity loan paid off all credit cards and installment loans and
financed some remodeling. Interest is tax-deductible, we pay one bill
instead of four, and I'm enjoying a new home office...all for $70 less a
month than we were paying before.
We raised deductibles on policies, after shopping around to secure the
lowest price on life, homeowners and car insurance. We chose comprehensive
medical plans that limit out-of-pocket expenses and allow us to pay a flat
rate per office visit.
Jealously guarding my at-home status, I resist paying full price for
anything. I stick to that conviction while watching for coupons and weekly
sales, taking stores up on their price-matching offers. Carrying three
different ad flyers into a local department store, I save gas as I do all my
shopping in one spot.
There is usually a 30-day price guarantee, too. After making your purchase,
watch advertisements over the next month. If the item you bought goes on
sale, you can visit the service desk with your proof of purchase and get a
cash refund for the difference.
I don't go to the mall, unless I'm carrying a sale flyer which places items
within my limited budget. When buying big ticket items from commissioned
salespeople, be prepared to negotiate. You probably already know you can
haggle over cars, but what about furniture? Or appliances? Anywhere
there's a commission to be made, there's a salesperson who has a vested
interest in selling you something. Be wise as a serpent, gentle as a dove -
and demand the best deal available.
When shopping for groceries, make a detailed list before you leave the house
and stick to it. Take coupons for items you've selected, and patronize
supermarkets that give you double and triple their face value. Invest in a
freezer and stock up on "loss leaders", the low-priced teaser items stores
use to lure you.
Many clothes marked "dry clean only" can be handwashed in gentle soap for
delicates. But a sure way of saving money is avoiding buying "dry clean
only" clothes in the first place.
Speaking of buying clothes, don't overlook those neighborhood garage sales,
especially the ones held in more upscale areas of town. Kids grow out of
clothes so quickly, these sales can be a blessing. Often, gently-worn jeans
and dresses are found for pennies. You can garner some cash and free up
space by cleaning out closets and basements for your own sale.
Our credit union offers no-cost checking. By purchasing checks through the
mail, I pay a third of what banks are charging. For that inevitable loan,
I've found credit unions consistently charge lower rates than banks, so
they've got my business when it comes time to buy a big-ticket item.
We paid off, then canceled, all our credit cards except one. This major
credit card carries a low fixed rate, with no annual fee. We try to use our
card only to the extent that we can pay it off each month, avoiding debt and
interest charges. If you have an excellent credit history, request the
annual fee be waived. There's a good possibility they'll agree, since
competition for trustworthy credit customers is fierce.
The first time I stroked out opening an outrageously high electric bill, I
called the utility company and learned about level payment plans. Now we
pay a predetermined amount each month, protected from burdensome charges
generated by July's heat or January's freezing temperatures.
Take advantage of buy-in-bulk opportunities on everything from frozen foods
to Internet access service. Send e-mail messages to on-line friends and
associates instead of calling long distance or using snail mail. I don't
put a stamp on any mail I can deliver myself.
Fill out and mail those rebate forms. I've received a computer modem, 200
diskettes, extra memory and a software upgrade for free, just because I took
the time to fill out the proper paperwork.
Often, I'll come out ahead when using a combination of coupons and mail-in
rebates. For instance, a shampoo was on sale for $2.50. I used a 50 cent
coupon, and the store doubled it. My cost for the shampoo was now $1.50. I
took two minutes to fill out the $2.00 mail-in rebate attached to the
bottle. Even after the cost of a 34-cent stamp, I had a free bottle of
shampoo and 16 cents to the good.
I don't pay for baby-sitting when I can trade with a friend. A film
fanatic, I've been known to trade typing services for show tickets. But I
only go see movies I'm dying to see. All others, I rent on video when
specials are running: 2-for-1 Mondays, etc.
Whether minding our manners at a sit-down restaurant or pigging out at the
local buffet, my family uses newspaper coupons and Gold C or Entertainment
coupon books. Sometimes it's cheaper to eat out than cook at home,
especially when you visit an establishment where kids eat free.
Penny-pinching aside, there are some things you just gotta have. After
trying to live without it for six months, our family decided satellite TV
was a necessity. So, we'll cut somewhere else.
Instead of taking a daily newspaper, I buy the Sunday edition, which usually
pays for itself because of the coupons inside. I don't purchase books or
magazines I can check out of the library, unless I can use the information
in them on an on-going basis.
Networking is important. Find out whose brother-in-law works on home
computers... whose friend knows lawns...whose sister holds a once-a-year
primo garage sale with upper-class outfits going for a pittance.
Don't pay someone else to do something you can do yourself. Use the more
relaxed time schedule of an at-home mom to expand your horizons in ways that
will benefit your family. Learn to maintain your automobiles, do your own
taxes, perform your own repairs. Wear out your library card, checking out
"how-to" books.
By applying thrifty principles liberally, you'll be surprised how much
you'll save. Then, when it comes time to splurge on something that's just
pure fun, you won't feel guilty -- it'll be your reward for being such a
good steward of your finances.
(Comments? Write Cheryl@homebodies.org, or visit her website at
www.homebodies.org. Her book, "So You Want to Be a Stay-at-Home Mom," is
available through Dr. Laura’s Reading Corner. Copyright
2001 Homebodies.Org, LLC. Permission granted for use on DrLaura.com.)
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