Friday, May 16, 2008

Ideas to cut expenses, Part 1

Someone wrote me about being a SAHM and that they might have to go back to work, despite having cut back and being out of debt - except for the mortgage.

This is part of what I wrote back to her.

I'm a single, working 2 part-time jobs, mostly at home mom. I homeschool 3 kids. I've been divorced for almost 13 years and have managed to stay home with the kids. I will add that I do have some help in that we live in Public Housing - I have a stand alone house in a fairly nice neighborhood - the mayor and a superior court judge are my neighbors just down the street. Also, we used to get food stamps, but with the oldest 19, they count her income, even though she has control of it and doesn't give it to me. She's still in school and only working part time, but it still counts, so we don't get much help anymore. I do get child support - when he pays it. I have a friend that has an internet business and I do her data entry and shipping. I also go clean our church once a week for 5 hrs. (Disclaimer here: I have sat down, quite a few times and done a budget, plugging in the going pay rate here in my rural county. To have put my kids in day care/school and gone to work would have left me $200 in the hole to just walk out the door. That was just for child care, raising of my rent (it's 1/3 of the family income), and taxes on my income. That figure did not include food (food stamps would have been gone), gas to get to work, car maintainance - we've had old cars and every mile driven put it closer to the grave yard; not to mention any of the other expenses a family has. So I've always had work at home jobs - but babysitting doesn't pay much.)

My number one tip is to STOP spending. That doesn't sound very hard, until people try doing it. We're so used to justifying what we "need" or we think it's "only $20" or we think "I deserve this". But these type thoughts are a real budget breaking thought pattern.

So first thing is what is a "Need". It's something that you can't physically live without. Usually defined as air, water, food and shelter. Since the advent of DFCS, we must also add electricity, RUNNING water - no outhouses, lol and appropriate clothing. (no shorts in Dec, unless you live in the Southern hemisphere or are in Bermuda on vacation. If you could afford THAT, you probably wouldn't be reading this! lol)

To me, with kids that used to get a lot of sinus and ear infections, a phone was also a necessity. I called the Dr. almost weekly. However I didn't need to be making long-distance calls to family and friends. I didn't need call waiting, call forwarding, etc. Those come under the heading of "Luxury". Yes, really!

So redefine the word "need" in your and your children's minds. (and if he needs it, Hubby's too)

The next tip is an old pioneer one: Use it up, wear it out, make it do or do without.
When we "choose" to be frugal and make a game out of it, it doesn't seem like "deprivation". I've always taught my kids that as "poor" as we may seem, we're really quite rich. I was a Missionary in Colombia. Even the "middle" class there are poor compared to me and I make sure my kids know about life there. I've taught them that really we are NOT poor, sometimes we just have a bad cash flow.

My kids have been raised this way, so it's not so traumatic for them. But even so, sometimes they would complain about not having ...... And I would point out to them the fact that for us to have what..... has, I too would have to go to work and what did they want more? Me at home, them in homeschool or to have "stuff". They've always answered me at home - especially since I point out that even with the mom working, a lot of people are in debt for what they buy. Most of mom's salary goes to pay for work/school clothes, day care, transportation and convenience foods/fast foods. Some of the "stuff" tends to be bought out of guilt, oft times unconsciously. After all, who wants to say no to a kid you haven't seen all day. And since she's working, they "deserve" to spend some on "things".

Next is to turn off unnecessary items. Here the cable went to almost $50 a month and I told them to come turn it off. We joined "Netflix" and get a movie sent to us, plus can watch stuff online - all for less than $10 a month. As soon as you return the movie, they send the next one on your list. It takes about 5 days to do a turn around. You can watch all the movies you want to online. I will say that some of the movies aren't available to watch on line, but there's still a bunch that you can watch. (Block Busters has a similar deal where you can just return the DVD to the store and get a new one, but the closest one to us is in Canton, an hour away.)

Also cut off some of the "extras" on the phone. Do you need to have call waiting, call forwarding, caller Id, answering machine, etc? Most of us have cell phones. Even I have one. But mine is a "Tracfone". I only put minutes on it every couple of months and use it to stay in touch with the kids when I'm out, not to talk on. Perhaps when your contract comes due you can scrutinize it for places to cut it. Sometimes with kids, it's better to have a cell plan that lets you add family members to it. My kids had the Tracfones, but they only have a certain amount of minutes. If I try to reach them and they don't have any minutes, they lose the phone! So that helps keep the text messaging down. Or turn off the house phone. (then you usually can't use the internet and don't have 911 calling from the house. So just keep that in mind.) I have basic phone ($13 for the monthly phone, but it's another $15 in TAXES!!! grrr) My long-distance is with an private provider - I just Googled Long-Distance companies and looked at what was available in my area. Since we're not in a metro area, there's not as much available, but still, i only pay about 4 cents a minute. I've not had the phone company's LD service in about 9 years. You can also find unlimited long-distance packages that let kids call friends. Mine have learned to use IM to keep in contact with their friends. It's free. You can also check into things like Skype, and most of the IM programs will let you talk to a friend over the computer. Or pay a fee and go from your computer to their phone. A lot of time, these things are a lot cheaper than the phone company's assigned LD carrier.

Also, I have an answering machine. They are not that expensive and last longer than paying money each month to "rent" from the phone company. Go online and see what Wally world has for machines. Mine lasted for 3 years before we acquired a new one from a rebate program. I spent about $20 for it and it was still going strong when we gave it to a friend. Divide the price of the machine into how many years you think it should last (about 5, unless it's getting some really rough treatment.) Then multiply how much you pay each month to the phone company and see which is cheaper.

We own our own phones and don't pay "maintainance" or "insurance" on our phones. Most of the problems with phones are either in the outside line (phone company's responsibility) or with the phone itself (your responsibility). The "maintainance" or "insurance" only covers from where the line comes into the house until it gets to the phone. So if something goes wrong with the line inside the house, then you are responsible for it. But it doesn't happen very often. Phone line is cheap and easy to install yourself. If anyone needs to know how, email me and I can tell you. Or you can probably do a Google video and find detailed pictures or a video on how to do it.

I also require my kids (19, 16 and 13) to help pay for some of their "extras". If they want to have a car, they have to buy it; and to get a driver's license (not a learner's permit - no ins. needed for that), they have to pay their insurance. Same for Scout camp and EFY. I pay part and they pay part. If they want their own phone line, they have to pay for it. If they want a cell phone, they have to pay the bill - actually, I won't sign anything for a kid to get something with a contract. I can't afford to pay it if they can't. So they had to use the Tracfone until they reach adulthood. Then they can sign any contract they want. If they can't pay it, it's their problem. I don't mean to sound cold, but they need to learn to be responsible financially and me bailing them out wouldn't teach them anything good. Plus, I REALLY don't have it to pay it myself. The two older ones do have checking accounts at 16, that I'm on with them. They both have been very responsible. Of course, my eldest now has her own account, and she's now on MY account. lol

continued tomorrow.


amy said...

Really good tips. I remember when my husband took over the budget and cut call waiting out and I was thinking why? Well apparently it's $6 a month that's why! We also have a monthly cell bill of $7 (or $20 every 3 months). It's hard for some people to start thinking differently but once you start going without it's not that hard and you never really miss it! Can't wait for your next tips. :)

Cheryl Anderson (SwineInsanity) said...

If you can, one good way to cut expenses is to compost. You can start a worm compost in the house for worm compost in the garden and worms for fishing and composts outside... I compost everything but meat... I make my own feminine sanitary pads and cut my boys/ husbands hair and put it in the worm compost... The little things can save much.... Cheers!