Q: I’ve been reading your Living on Less Than $28,000 A Year Series and I would like to start getting our finances in order, but I just don’t know where to start. Can you help?
A: Yes, there are three things that you can do to start turning things around:
Discover Your Why
Breaking old habits is hard to do, especially when it comes to handling money. For our family, it has taken some difficult consequences (some of which we are still experiencing) to make us realize that we had to do things differently.
If you see that things need to change at your house, ask yourself WHY you want to change and make a decision in your heart that you are committed to the change, no matter how difficult it seems at first. You may want to write down your reasons for handling your money differently. Keep those reasons on your refrigerator or some other place where you will see them.
Keep A Record
To get started, keep track of your spending for 2 to 3 weeks. Use a small notebook, index cards or some other method to keep track of every single cent that is being spent in your household for the time period you choose.
When you take a look at your spending you will begin to see some patterns. Maybe you didn’t realize that you were spending $50 a week on lunches out with co-workers or that you actually spend $700 a month on groceries for your family of four.
Start Small
Once you have committed to change and discovered where your “leaks” are, begin to make small changes. Many times when we start a new project, we go “gung ho” for a few weeks and then get burned out. To make lasting improvement in your finances, start with small changes and do them consistently. Three ways to get started right away:
Save Coins
At the end of the day, put all of your change into a jar. Do not touch the money until the jar is full, then roll the coins and deposit them into your savings account at the bank.
Go Cheap
Have a week of super cheap meals (macaroni and cheese, quesadillas, pasta with sauce, tacos, pancakes for dinner, homemade or canned soup and grilled cheese, etc.). The money you save on your grocery bill this week can be put into savings.
Sell, Sell, Sell
Find things in your house and garage that you can sell on Craigslist or other online websites. Put the money into savings rather than using it to go out to eat.
By using these tips, you can jumpstart your savings or Freedom Account and be on your way to lasting financial stability.
Do you have other ideas for quickly saving or earning money? Share in the comments. 🙂
next post: Carnivals and Brazilian Steak
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When you talk about how much you spend on groceries, are you including things like dishwasher soap, toilet paper, etc.?
Because I struggle to keep it under $800/month for a family of 4 and I feel like i’m doing a decent job of making 1 to 2 cheap dinners each week (eggs and pancakes, hot dogs, spaghetti), and I get 5% instant savings by having a Target Red Card but I don’t compare stores (i shop at one store) and I do buy snacks (but I’m planning to be smarter about that).
The $100 is just for food. I make a Walmart run about twice a month for non-food items and usually spend around $30-$40. I will pick up non-food items if they are on sale at the grocery store, which does help.
I am wondering how do you get started in the middle of debt? I am trying to figure out how to apply your ideas, but still keep caught up. I feel like I need a month of paying nothing to build-up the different categories. I’m sure that’s not what I need to do. Any help would be wonderful! Thank you so much for your amazing website. I love it!
Hi Katie! I would pay minimums on your debt payments, cut your spending to the bare minimum for 1 month (no eating out or entertainment for example) and try some of the ways to get extra cash that I have listed here. There are some good ideas in the comments as well. It might take two months, but you will be surprised at how much you can save if you do those three things.
Let me know if you have other questions. 🙂
So I totally love all of these ideas on saving money! and we will be doing some huge changes in our house! I have a couple of questions though, because our household situations are a little different. we have 3 children, 3, 2, and 6 months. which makes “entertainment food” more like, snack time for them, which happens 2-3 times a day aside from our regular meals. and since theyre so young, I feel like they need at least 2 snacks during the day (morning and afternoon) what can I do to make these snacks cheaper than always buying animal crackers, cheese itz etc…? also our monthly income is only $1800…..so we make about $400 less than your family…I try to keep our groceries under $150 for two weeks….which is really hard, especially since im a terrible cook and my husband is a very picky eater.,..(won’t eat veggies, or basically almost anything healthy…) so we eat out a lot…which we will be stopping. but then I don’t know what to make because it has to be simple, but I don’t want to be making mac n cheese everyday… 😛 any advice would be really helpful and appreciated!
Have you seen my Saving on Groceries series Jen? Click here: https://thepeacefulmom.com/save-money-on-groceries/.
I really love reading all our posts and even the comments from readers below! Your blog has been an encouragement to me in so many ways! I am curious what you do about health insurance or other readers for that matter. I am a stay at home mom to 3 boys and my husband works a good job but company health insurance is only offered to him, not family. He brings home about 2500/mo and after all bills are paid (house, tax savings, auto ins., etc) there is really nothing left. We are on a set budget that I have figured weekly (that’s how he is paid) but just can’t find the extra to pay health insurance…
Unfortunately we don’t have insurance right now. I keep some savings for medical needs and we hope to be able to afford insurance in the future, but can’t right now. I know that some states have programs for children that you can apply for. Sorry I can’t be more help on that one.
Thanks for your response! 🙂 I think that is my biggest struggle right now, just not having any health insurance. We can get by with everything else, and we live comfortably! Thanks again!
I just wanted to say to all the moms who are staying home with their children and to those that want to – it’s something you’ll never regret! We lived on my husband’s salary (law enforcement) when our children were small and then later on his salary as a pastor of a small bi-vocational church. We never had over 30k a year and yet we were able to raise our two daughters and live well on this amount. We did the same things Kimberlee is advocating. We got out of debt. Put some money in a savings account. We didn’t eat out a lot, didn’t buy a lot of new clothes, but we did take a vacation every year – usually camping or inexpensive motels and packing a lot of our own food. Our girls have both said how much they loved those vacations and I know it made them feel secure knowing mom was home when they needed her! Our kids are grown now and trying to live this same way with their children. You can do it through God’s grace and provision!
Im loving this right now. My husband and I have been married for a year and I just lost my job as a teacher. My husband makes way more than enough to live on (in theory) but I’ve been unable to see how we could really make it work well. I grew up in a very excessive spending environment and learned some very bad habits. :/ I could go back to work but honestly feel like I want to be able to stay at home to support my husband, volunteer, and in a few years be an available mommy to our future children. Your blog is already giving me hope and making me very excited about having money in savings and to do things in the future!
I highly recommend that anyone interested in better money management read “Your Money Or Your Life” by Vicki Robin. Consider it less of a personal finance book and instead more of a “lifestyle” book.
If nothing else, you must track your finances, to the dollar. No “cheating”. If you buy a pack of gum at the checkout, track it. And in my experience, you really need to do this for a full *year* before you can truly have a good idea of what your lifestyle costs.
I have been so blessed by your blog. I am getting married in March and my fiance and I will be living on a very tight budget for our first year of marriage. (I will be finishing up my senior year of college.) We are against using credit cards, and we are planning to use Dave Ramsey’s books to make it through. Now I can add your tips and tricks to the list of ideas! Thank you so much for taking the time to write this series!
You are very welcome Abby! Good for you for having a plan as a young married couple! You are very wise to avoid credit cards and even though it will be a sacrifice, you will be so glad later on. Blessings!
I would also like to offer a link to a budgeting website that has helped me a lot: http://www.mint.com The site is free and secure. I’ve been using it for about a year and a half now and it has really helped me see where my money is (really) going and how I need to adjust our budget to work for us. You just enter the information for your existing bank accounts and credit cards (if you have them) and it automatically tracks and tallies your purchase, so you don’t have to worry about something slipping through. There is a way to add cash purchases, as well as the ability to create budget categories, and customize what categories different purchases should be attached to.
I still need to work out some kinks in my plan, and your blog has given me some great ideas of things to try (thanks!), and I know where I need to cut back (that darn convenience food and overstocking groceries!) but mint.com helps to remind me as well as show me the things I’m doing right. I just wanted to share it with your other followers as an option for how to get their head around “how to get started”.
Thanks Aurora. I have had several others mention Mint. I need to check it out. 🙂
As I am taking a huge leap of faith that no one will judge and will only provide constructive and helpful words, I want to lay my story down and hopefully receive some help.
I am a stay at home house wife. I do what I feel I should as a stay at home mother (aka clean and cook). My husband is a military man and I feel we make a enough money to live on but as far as being frugal and smart with our money, we are not. I know where my problem is; however, addressing it has been a huge obstacle for me. I grew up with never having money or groceries to eat. When I shop, I buy excessive amount of groceries to ensure that my family will never be without. Every month my husband brings home about $3,400 a month. I separated my bills by which gets paid during the 1st of the month paycheck and the 15th paycheck. My first of the month bills added up to be $1627 and second part of the month to be $527. I am trying desperately to get out of the hole because at first we didn’t realize we had a problem. We all start out young and ignorant. I understand you can’t give me professional advice but any little bit can help me. Right now we are almost $500 in the hole. This gives us no breathing room with the first check. Easiest way to get out of the hole? Would it be smart to use a credit card for a few of my bills and make a payment every month and then pay it all off once we were out of the hole and had at least one foot on the ground? I feel as a small family we shouldn’t be struggling this much and I see a lot of room for improvement after reading your blog and I want to put this in to play ASAP but getting started is my biggest issue.
Hi Ashley!
Thanks for feeling that you could ask me for help. I cannot tell you that I understand what it was like to be without food. We didn’t have much money growing up, but we always had food. I am sure that must have been super difficult and has left you with some scars. I would definitely pray and ask God to remove that fear from you and assure you that He is your provider. (I just prayed that for you.)
I can see how using the credit card would be tempting. Personally I would try everything else (selling things, taking a part time job, eating cheaper meals for a couple of weeks or using what’s in your pantry instead of shopping) before I used them, but if you have an emergency and have no other option, you could use the cards and then commit to paying them off as soon as possible. I don’t know if you’ve read my post on setting up a second account (https://thepeacefulmom.com/2012/02/21/living-on-less-than-28000-a-year-managing-the-money/, but I have to move the bill money to a separate account so I won’t spend it. I also have an article here about 5 quick ways to get cash: https://thepeacefulmom.com/2012/04/04/5-easy-ways-to-get-extra-cash/. The comments on the post are helpful.
I pray that you will be at peace and will quickly find ways to cut back and increase your income. Be blessed and let me know if you have more questions. 🙂
Just wanted to mention that most banks now have a coin counting machine. You can take in loose change and it’ll count for you, free of charge. No need to roll all those coins.
Ashley,
Having been a former military spouse, and a volunteer with Navy Relief. You didn’t mention which branch of the service your husband is in. The Navy has the Navy Relief Society that offers financial counseling and can assist with a budget. They can also provide a short term interest free loan to help with the “hole”. Check with the base to see if they have the same type of organization.
You can also contact the companies that send you bills, to see if they can change the due date to coincide with the second paycheck. I’ve done this in the past, and they’ve had no problem with adjusting the billing cycle.
Good Luck.
Found you via Pintrest, yippee! As a family of one on 11K/ yr, frugal is the only way to survive. Messed up my budget months ago, still struggling to get it back in shape. I was giving all my “disposable ” plus a portion of my food budget for tithe, I was upside down & very hungry.
Thank you for an honest blog on the reality of the 99%ers!
You made an excellent point on the effects of being frazzled on finances which applies to all of us! Cheers to you!
Welcome Jann! I am so glad that you were encouraged.
As far as tithing,it is a controversial topic, but we personally believe that ALL of our money is God’s, and we try to do what He wants with all of our spending rather than just paying 10% like it is a bill. There are times when He has us give more than 10%, and other times when things have been really tight and we have given something away other than money. I pray that your income will increase and that God will meet all of your needs. 🙂
I believe there are other ways to “tithe” when money is tight- volunteer at your church, work a soup kitchen etc. The important part to me is giving back to the body of Christ in whatever way you can. As a college student my time is all I can afford to give.
I just wanted to add that living on that figure is VERY doable without living in a needs only situation.
My family lives on a very small income also (less than $30,000 and a family of 5)…the key for us was 2 things…first we had to see where all the money was going…before I actually kept track I would have said all to bills…and doing a budget. We “found” an extra $500 a month to go to debt reduction. Amazing we had an “extra” $500 a month when we were living paycheck to paycheck.
$20 per week was going to fast food once a week. $50 minimum a month was going out to eat. $20 a week (minimum) was going to beverages purchased for convenience. The extras I would pick up at the store vs sticking to a list and a budget.
Also consider calling your companies and seeing if they can offer a discount…credit cards may be willing to lower your interest, if not find one that will. Our phone company gave us a 12 month discount on our bill just because I asked. So did my cable company – better for them than losing us. And if you have some sort of emergency fund – consider raising your insurance deductibles. we did – but make sure you look at the figures and your driving/medical/claim history to decide if this is a good option for you.
I definitely second this comment. Companies are desperate to keep your business in this economy. We decided we needed a landline after our first child was born (hadn’t had one for years but I’m not great at remembering where my cell phone is, which could be disastrous in an emergency). Anyway, my husband called Comcast (cable, phone, Internet) and told them we were going to cancel to get a ‘bundle’ package elsewhere. We ended up keeping the same cable and Internet package and adding the phone line…. While paying $20 less a month!
I just wanted to say a big “thank you!” for sharing your story and tips. My DH and I were both irresponsible w/ finances before and during the first couple years of marriage. The greatest thing that has turned things around for us was taking the Financial Peace class through our church. I highly recommend taking the class or take advantage of the free materials available on their website (especially for engaged and newlywed couples…start out right!). We have learned to discuss financial issues and emotions attached to those (mainly mine) openly and devise a plan together to make it happen. We revise our budget plan several times a year as we “baby step” our way to making better decisions. I cannot tell you how much this has improved our relationship and faith.
For those that have just started this process, I encourage you to allow yourself grace and room for growth. This is a marathon, not a sprint.
This continues to be a real struggle for us and I daily (sometimes multiple times) repeats Dave Ramsey’s mantra, “Live like no one else so that later you can live like no one else.” Like many of you, my heart is to be home with kids and homeschool. After a year and a half of growing diligence, we have managed to pay off about $27,000 in debt with a very moderate income. Although we still have quite a bit more to go, we are more motivated now than ever to button down, adopt extreme frugality and pay off all we can so that I can leave my full time job and be home with the kiddos. I will likely still seek something I can do part time from home (babysit?).
I share this to encourage those who may be starting (or considering) this quest. Everyone’s situation is different, but taking small steps over time can make a huge dent in debt and/or allow you to rearrage priorities to have the family environment that matters most to you.
Good advice Melanie! Thanks!
I recently had to leave my full-time teaching career due to illness. I am now staying at home with my beautiful 9-month old daughter (which is what I should have done to begin with!)!. I have been very stressed about how we are going to make it living on my husband’s salary, but when I stumbled across your page this evening, I felt a bit more hopeful than I have felt in the last three months. Thank you for sharing what you do! It is a blessing!
Not sure the best place to leave this question, but I’m curious: is the “less than 28,000” your take-home pay or your gross income? I know that our gross pay sounds like it should be plenty, but by the time taxes and health insurance come out, that number is quite a bit lower (and we do pay a lot for our insurance due to health issues). If you’ve already answered that question somewhere, sorry for the repeat! 🙂
It’s actually in between. Our take home pay is between $1800 a month ($21,600 a year) and $2200 a month ($26,400 a year). I chose a little higher figure ($28,000) and said “less than” because our income fluctuates and I didn’t want to exaggerate about how little we live on. Does that make sense?
I found your website through Pinterest. I have two step children from my husbands previous marriage and we both work full time to make ends meet. I have been doing a bit of reading around on your site and you have inspired me to change the way I spend to be able to spend more time with them and be able to actually save some money! Thank you.
I am so happy Racheal. You can do it!
I am so glad I found this blog. I am in a huge amount of debt because of taking out loans for my undergraduate education (around $90,000) and decision I regret. I chose a major that I thought would lead me to a stable career, however in Philadelphia they fired about a 1,000 teachers therefore I had no hope of getting a job. The surrounding districts were all on a hiring freeze. I was blessed with the opportunity to go to graduate school for free and I am trying to absorb as much knowledge about financial management between now and my graduation date. My future husband is in a similar position debt-wise expect that he is getting job offers before he even graduates.
While reading this blog, I just had an epiphany. If we can make our everyday living simple and inexpensive and only live on say $28,000 out of our future salary (less because we don’t have children and won’t any time soon), the rest of my money can go towards clearing up debt and saving for a wedding.
Thank you for the inspiration and sorry for the long comment.
Nicole, that is a GREAT idea! Having a goal like saving for your wedding can help you make the sacrifices necessary to live on less. Way to go! 🙂
Thank you so much for writing this blog! I have been following you for a little bit, I have missed couple of bogs so I decided to go back and read them. Your blog is very inspirational! I am trying to get my families finances in order and this blog has really helped me. 🙂
I have tried couponing hoping I could cut some of our grocery bill in half but that hasn’t really worked out for me. I either leave the coupons at home or forget to bring them into the store. And it is a lot of work to cut the coupons and organize them . I keep trying and sometimes I save a couple dollars here and there. I hope I will pick it up soon.
I just have a couple questions to ask, I am hoping you can help me. My husband gets 2 bonuses a year and does some work on the side. What do you suggest we do with the extra money? Do we pay off debt first or start making a savings account? Both of us have retirement account through our places of employment. I was just wondering which will benefit us more in the long run.
And my last question is what foods do you suggest leaving in the car for snacks when the kids get hungry? I am on the go quite a bit. I have a 7year old daughter who is in poms and a 5 year old son in baseball. With practices and games we are busy a lot during the week and we are trying not to go through the drive thru on our way home from them(I think that is one of our big problems). The kids are very disappointed and don’t understand, but I think they will adjust to it. 🙂
Thank you so much!
Nicki 🙂
Hi Nicki!
I am definitely no financial counselor, but I can tell you from experience that having a couple thousand dollars in savings can change your world. Suddenly emergencies are no longer emergencies because you have the money to pay for them instead of using credit. I know that others advise having a small amount of savings like $1000 and then paying off debt, but I personally think that having an amount in savings equal to 1-2 months of living expenses is wiser. Once you start paying off your debt, start with the smallest debt first and put any money you can find toward that debt while paying the minimums on everything else. Once the smallest debt is paid, put the amount you were paying on that debt plus anything extra toward the next smallest debt and work your way up the list.
Again, I am not a professional and you should do what is best for your family. This is only a suggestion of what I would do in your situation. Hope this helps. 🙂
Also, you can download my FREE ebook Save More Clip Less for ideas on saving on groceries that don’t involve couponing.
Thank you so much for sharing your finances. I have a 6 month old and have been struggling with working full-time when I would rather be at home with her. Your series on budgeting is such a motivation for me to work towards tightening up our finances so I can be a full-time mom!
I am so glad Jaclyn!
Wow, props to you all for being able to live that tightly.
I am amazed! I will be directing a friend in financial trouble over here as I think that she could really benefit from a lot of your ideas!
Thanks Ally!
Oh and probably 20/mo in diapers.
You are only spending $20 a month in diapers? Does that count your wipes as well? Where are you purchasing (I am assuming you buy generic)? I may need to start purchasing there, as I will have 2 in diapers about 2 months from now…
Cloth diapers save hundreds of dollars and you can use them for more than one child. If you have a smidge of sewing skills you can make them super cheap. 😉
I buy target brand diapers/up and up and the biggest box they sell costs 24.99 where I live and lasts a month for my son. I can also find a $1 off coupon a lot of times on the target website.
Just wanted to say love your blog! I’m so glad I found it. I quit work in Oct. and am just finally getting a realy budget going. After reading one of your posts I made a weekly grocery budget of $100 after I realized how much I was spending every month, it’s ridiculous! Even with still buying organic I have been able to stay on budget, even w/buying toilet paper & household items. I have made sure to eat what’s in our house & skip on the “luxury” snack items, etc. that we don’t really need and maybe I can get it next time. It def. helps me to have a menu & grocery list. I have some non-gf stuff in the pantry that I am using up(I don’t need it for health reasons, I just prefer no processed flours) just to keep things cheaper for now & to not waste. I started working part-time this week so that will help a lot but I still want to stick w/it so we can start saving again instead of depeleting our savings. So far we have $1900 of debts every month for all major bills etc, then I budgeted 400 for gas total (I rounded up since gas is going up & up!), 400/mo for groceries, 50/mo medical, 50/mo out to eat, 20/mo entertainment, 20/mo each “blow” $, 40/mo for both our hair, and I guess I need a “Misc” for stuff like the dog getting groomed or needing new shoes…. Does that sounds reasonable?
Your budget is really going to be personal. I would say those sound reasonable. Try it for a month and see if you need to make any adjustments. Way to go for taking control of your finances!
My husband and I redo budget at least once a year. Our finances change, we might get a raises, things get paid off, or we notice we need to fix something in the house. So we need to decide where our money goes. Its great when you are both on the same page. You have to work together. Writing things down is a real eye opener. Don’t be afraid, it gets easier as time goes on. I also had to learn to say NO and be okay with what people say.
A budget is a must. Once you have your spending record, you can sit down and figure out what you need each month for expenditures and where you can cut back. Then create an allocation table. Spend every dollar on paper and stick to it. Then use the Freedom Account that Kimberlee offers to help keep track of how much is available in each category. The savings will quickly add up if you keep yourself aware of what you’re spending and where. (I use a modified version of Dave Ramsey’s allocation table.)
A few years ago, a friend referred me to an amazing site, http://www.whatsthecost.com. On it, you enter in all your debt, including interest rates, and you create a “snowball.” Your snowball helps you prioritize your payments, creates a payment plan according to your needs, and shows you how long it will take for you to clear all of your debt. It’s been a huge help to my family in sorting out our finances. And it’s free!
Thanks Rachel!