Monday, July 25, 2011

10 Unconvential Money Tips

When my marriage and family were brand new we made some mistakes.  One of the bigger mistakes had to do with our finances and the purchase of our home.  We bought a charming historic house with the original woodwork, a newly remodeled bathroom, and everything in sound condition.  We purchased the house seven years ago where real estate seemed to be the best investment for your dollar.  Need to pay off your soaring credit card balance?  Roll it into your mortgage!  Want a new car?  Take out a 2nd mortgage!  Doesn't matter, home values are only going UP! UP! UP! Then the housing market crashed.  And I cried.

We bought our house with the intention of staying in it for many years.  So we extended and bought a house out of our price range.  When the credit cards were becoming too large, we rolled them into the mortgage.   Two huge mistakes we learned: don't buy a house with a monthly payment of more than 25% of your take home pay and don't roll your credit cards into your mortgage.

One year into home ownership we discovered two huge problems.  Carpenter ants and bats.  Both were very expensive to remove and bats are almost impossible to get rid of forever.  Then the roof started leaking, and the newly remodeled bathroom needed $4000 worth of repairs.  Apparently the previous owner did all the work himself, and was a lousy carpenter/plumber/electrician.

Throw in two kids in daycare and trying to start a new business that wasn't bringing in money and you've got a recipe for financial disaster.   Despite the financial struggles we never once missed a mortgage payment.  Here are some unconventional tips we used to save money.
  1. Canceled cable.... saved us over $40 month and my wife and I learned what it was like to actually talk to each other rather than turn into zombies after the kids went to sleep.
  2. Trimmed our food budget to the bare minimum.  Lots of peanut butter sandwiches (which I love).  With the use of coupons and the purchase of generic products we only spent $200/month for our family.  We did learn one thing about generic products... most are great, but nothing beats KRAFT macaroni and cheese.  Never buy generic Mac n Cheese!  We also found out that Target brand has great prices on diapers, formula, and other baby stuff.
  3. Prioritized bills.  We always paid the mortgage first.  If we didn't have enough cash for the bills on the bottom of the list, we didn't pay them.  Some months we didn't pay the phone bill, trash, or the natural gas bill.  The late fees were minimal for these and the service after a couple months never stopped.
  4. Picked up a bunch of hours working as a part time bartender/waiter at the local golf course.  I discovered that one of the best part time jobs is working as a bartender for events and weddings.  Some weddings you can earn over $50/hour.  Which is twice as much as I make at the school district.  Plus weddings are awfully fun to work.
  5. Stopped going out to eat, and didn't go on any vacations.  This was very hard for us.  One summer we had to make the tough phone call to family members that we weren't able to go on the family reunion in Colorado. 
  6. Took advantage of daycare reimbursements through my employer so that my daycare costs were taken out of my paycheck before taxes, saving us hundreds.  We did the same with what's called a "Flex Account" for purchases like eye-glasses and dental work, things not covered by health insurance.
  7. Autumn and I stopped buying clothes for ourselves, and cut back on buying clothes for the kids.  We started shopping at Goodwill for items such as shoes, jackets, and necessary winter clothing.  Nobody would ever notice.  We were fortunate, the kids did get a bunch of new clothes from grandma and grandpa.
  8. Canceled the cell phone.  I know.  Huge.  10 years ago people surprisingly survived without cell phones.
  9. Then, a minor entertainment savings was showing up 10 minutes late to the local high school varsity games.  I found that right after tip-off, they close the admission tables and you can get into the games for free.  Didn't save me much, but I didn't fret about having the $5 to get into the game.
  10. Made homemade gifts for occasions such as Christmas, birthdays, and weddings.  My wife and mother-in-law bought me a wine making kit for my birthday.  My parents have a huge raspberry patch and people donate their used wine bottles to me.  I can make a bottle of wine for less than a dollar a bottle.  So when it comes time for Christmas, anniversaries, weddings, birthdays, New Year's Eve and other occasions, I give away my wine.  I've continued this and it has literally saved me hundreds of dollars.  Plus my wife makes play-doh, slime, bubbles, and other fun kid friendly gifts so that we don't spend a lot on our nieces, nephews, and our kids' friends for birthdays and Christmas.  Plus these gifts have a lot more meaning behind them than a gift card.  
I'm proud to say we survived our financial hardship without any handouts.  We just rolled up our sleeves and went to work.  Now that we are back on stable financial ground we appreciate the freedom that comes with money in the bank.  We have not reached all of our fiscal goals, but we will never ever again be broke.  


    1. While our story is slightly different - we too have utilized many of these ideas.

      We bought our house before the housing boom. We have a moderately priced house. We also have a pretty humble home - the second smallest in our builder's options. So we have that going for us.

      But we made the commitment to having a parent home for the kids as they grew up. This means a one income family. After #3 came along - we seemed to have "weathered the one income storm" pretty well - but the surprise #1 (#4) came along, and four years later surprise #2 (#5) came along.

      This extended our "one income" plan an extra several years - and had burned through what savings we did have - so we used credit more than we should have - and, if you look around our house (and lifestyle) it was not used extravagantly.

      Now we are having to play catch up - We are continuing to live modestly while having to pay back nearly 15 years of "the plan".

      We did keep cable, but trimmed our food budget down to a bare minimum. The Mother of Five has been couponing for the past couple of years now and it's amazing how much she has saved us!

      I have "prioritized" bills MANY times!

      I don't have a part time job, but my career offers me opportunity for overtime - and I take that when I can.

      We ebb and flow on going out to eat. It seems like sometimes we are going out way too much, while other times it seems as if we have not been out in ages.

      We never had to deal with daycare - so that is the "upside" of our financial journey.

      Clothing (in my opinion) is a necessary evil - I hate spending money on clothes. Our "new" clothes come from gifts (birthday, Christmas, etc) or from clearance racks. The Mother of Five is GREAT at shopping (and finding some great deals) at the clearance racks!

      We did not have cel phones until a few years ago - but now with teenagers, we have found just useful they are. We are still voice (and text) - but no data. I'm too cheap for a data plan.

      Thankfully, not a big sports fan here - so going to the game meant watching the kids play little league, and maybe taking them to a homecoming game or something like that - similar to this though, is movies. We NEVER go see a movie in the theater - we wait until it comes out on DVD and rent it.

      Some of my most memorable gifts have been home-made. I still have several items the kids made in school for Fathers Day. How many other Dads can remember what their kid bought for them three or five years ago for Father's day? I am willing to bet very few!

      This nation needs way more folks like you... Willing to "roll up their sleeves" and work on repairing their financial problems. Too many people rely on the government to bail them out. I don't begrudge those that are truly in need, but we have too many folks looking out for themselves, and not looking at the bigger picture...

    2. Dave we should hang out! Autumn and I are using the Dave Ramsey baby step plan. Because of the house payment and digging ourselves a big hole with coffee shop debt it has taken us years to have breathing room, but yet we still have $20,000 left of debt (not including the house) to pay off. We hope to have it paid off in the next couple of years. Most people who go on the Dave Ramsey plan go hardcore like us, but then are debt free in 2 years or less.

      So because its gonna take us longer to get debt free we do splurge on going out to eat. This summer was the first in 4 years where we went on on a vacation, (To Omaha!)

      We reward ourselves when we pay off a loan. We just paid off an evil coffee shop debt, so we celebrated by visiting relatives in Nebraska.

      I have an idea I'd like to run past you. I'll send you an email. Thanks for sharing your story! Glad I'm not alone!