In conjunction with the Living on Less Than $28,000 A Year series, I will be sharing periodic Financial Updates. I won’t always give specific numbers, but I thought it might be helpful to have a little window into the day to day decision making process we go through.
You may have read previously that my husband has a part time job that he can work a few hours a week when work is available. For the last two weeks he has been able to work, so we were able to add some money to our car repair, clothing and medical categories in our second checking account.
Here’s what our second account totals look like right now (including our regular deposits from my husband’s primary job as well as the extra income from the side job):
FREEDOM ACCOUNT TOTALS
rent category ($250 weekly deposit) $500 total–on track
utilities category ($75 weekly deposit) $188 total–on track
$127 cell phone, home phone and internet due in one weekcar insurance ($40 weekly deposit) $400 total–extra
$326 due April 3–I recently reduced this by increasing our deductiblelife insurance ($15 weekly deposit) $115 total–under*
$153 due 4/11car repair ($20 weekly deposit when available) $290 total
we need to repair the car a/c very soonclothing ($5 weekly deposit when available) $15 total
medical ($10 weekly deposit when available) $77 total
*once I pay the car insurance, I will transfer the extra amount necessary to catch up this account
If you have been following along in our journey over the past year and a half, then you know that in December of 2010 we sold most of our belongings and moved to another state to train for a job overseas. We realized during the training that the organization was not a good fit for us and in the past year we have been struggling to get back on track. We essentially had to start over.
When bills came due we had to pay them with my husband’s paycheck from that week and pray that we had enough money for gas and groceries to get us to the next week. It was a very stressful way to live, but because we were struggling we would make excuses: “We’re not going to have enough money anyway, so who cares if we spend this $4.00 on drinks at the gas station?”
In January of this year, we made a decision to get a better grip on our finances. Even if it looked like we didn’t have enough to make ends meet, we knew we had to try to do the best job we could. We started using our second checking account again and started putting money into it from every paycheck (no matter how small it seemed), rather than spending it.
As a result of making these choices, this is the first time in over 12 months that we can pay the non-monthly bills (car and life insurance) and still have money in the checking account.
By simply being faithful to put the money into the second account a little at a time instead of spending it, we are able to pay each bill when it is due and still have money left in the account. It’s a good feeling!
If you are in the same position we were in I really encourage you to open a second account and start putting money into it as soon as you get paid. I know for us, if the money stays in the primary account, we can always find something to spend it on. If you don’t have any extra money, try one or two of my suggestions here to get a little ahead.
On another note, we also received our income tax refund. We did receive the child tax credit and some of the earned income credit because of our low income, but it was offset by some taxes that we had to pay. The money we did receive went directly into a savings account to give us a little cushion for emergencies.
I realize that once again, we are sharing very personal information, but I just want to share it to encourage those of you who think your finances are hopeless. If we can pull our finances together under the circumstances we had, I think almost anyone can. Just be faithful with the small amounts of money you have, and they will really begin to add up for you.
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As my husband is self-employed and we run two businesses from home, it is difficult to truly estimate income and how much needs paid in estimated taxes. Last year we over paid and thought that 2013 we would earn more and so owe more. When the refunds came back, they were immediately dumped into a totally separate savings account where it has sat growing interest for a year. In a month or two if we need it all or part of it to pay taxes (along with the $2000 estimated we paid this years) we have it to pay and no ulcers.
I am BIG into having different accounts for things so that when money is set aside for something it is there when needed. As our finances come more and more together each year, it has become easier to pay things off in full and save for the expenses that come up. My hubby doesn’t understand why I need to use so many accounts, but since I’m the one that does the finances I get to do it how I want. Having separate accounts really works.
That is so smart of you to put that money aside in case you have to pay taxes Gailete. I know that having separate accounts really helps me to manage our money, but it works best if you keep good records and know what is in each account. It sounds like you are a “nerd” like me and do well with it. 🙂
I have read many of your posts. I am so thankful I came across this on Pinterest. We had moved to a different state to take care of my sick parents and due to our house not selling, we moved back so we wouldn’t lose it. This whole process left us financially behind which has created a very stressful situation. I am very determined to make changes in order to catch back up since we will no longer be paying bills in two states. I know it will takes us awhile but with these tips I think we can have a good fresh start. Thank you so much and God bless your family.
Hi Andrea! I am sorry that you found yourself in that situation, but I am so glad that I could help in any small way to encourage you. 🙂 Hopefully you will be able to get back on track quickly.
I love your posts. Thank you for sharing such personal information. My husband is in the military and just got posted to another city, and I do not yet have a new job. My training is highly specialized, and there is a surplus of employees in my field here. Needless to say, finances are tight right now. Anyway, I just want to say thank you again for sharing. Your advice is helpful and provides hope to those of us facing financial difficulties. And if you could put me in your prayers that I find a job soon, that would be amazing. Thank you, God bless.
Yes, Shelley. I do pray that God will provide a job for you very soon! I am glad that I could give you a little hope.
I know this is very personal and possibly sensitive information that you are sharing and I would like to let you know how much I appreciate your sharing.
In our household, I am in charge of the finances. My husband is terrible at it and, if left to his own devices, would have us living paycheck to paycheck. I very much dislike that feeling of not being able to make ends meet and I feel that as an adult, I really need to figure out how to make sure we don’t fall into the dark deep hole of debt. At this time, we are fortunate to have decent paying jobs and, until recently, have had few unexpected expenses.
What I do, in regard of our finances, is figure out what our monthly expenses are (mortgage, car payments, student loans, credit card, bills, etc) and basically make sure that our income can cover those expenses. We have a “home account” from which these expenses are paid from. Then I figure out what each of our contribution is to the house account and whatever is left over from our paychecks is our do-whatever-you-want-to-do-with-it money that goes into our personal checking accounts. We pay our groceries, gas, and anything extra from our personal accounts. Some people might be surprised that we keep separate personal accounts, but it’s what works best for us.
I would really like to potentially start a new “grocery” account, mainly to keep our grocery budget to a set amount and to see how that works for us. Also, that way we can count on actually having the money for groceries (not usually a problem, however we have some medical bills that need paying so trying to keep the food as budget-friendly as possible while still eating things we like).
Thanks for all of the helpful tips! 🙂
Sounds like you have discovered what works best for you–way to go! As far as groceries, it has worked much better for us since I switched to a cash only system. When the money is gone from the grocery envelope I have to borrow from another envelope which really makes me think about whether or not we need that extra few items. 🙂
Hey there! I just wondered if you might be able to offer some advice.
I am 14 weeks pregnant, and i want so desperately to be a stay at home mom when the baby comes. I already plan on breast-feeding, and cutting back on groceries, material things, etc. My husband is currently making almost 16.00 an hour, but we have about 480.00/month in debt! (yikes I know) and I recently switched jobs, where I make 9.75 an hour, and I have to get cobra insurance (not sure how much that will be yet.) My question is, where should we start?! Should we knock down the debt? Should we be buying baby items with any extra money? I’m so scatter-brained about it all 😛 I’m really trying to have faith in the situation, but regardless of whether or not I quit my job or stay there and pay the 150.00 week childcare, we NEED to get our finances in ORDER. Thank you in advance for any help! 🙂
Hi Courtnie! Congratulations on your new baby!
If I were you I would start by writing down EVERYTHING you spend so you can see where your money is going. Try to live on your husband’s salary as much as possible and save everything you can for medical and baby expenses.
You have some time and there are not that many things that a baby really needs. Maybe friends and family can help purchase a car seat and stroller for you. You can find lots of practically new baby clothes at thrift stores and yard sales. There is no need to buy a lot of new clothes for them because they outgrow them so fast.
Once you have the baby, do whatever you have to do to get out of debt–sell things, start a business out of your home like tutoring or childcare for other moms, cut everything to the bare bones. Hopefully you can stay home right away, but if not, you can become a stay at home mom more quickly if you dedicate yourself to paying the debt down. Good luck! I’d love for you to let me know how things are going!
I just wanted to say I am reading every one of your posts in your series. We have a bit of debt and have 3 children. I stay home with them and we choose to try our best with the money we have. We are saving pretty well right now but I want to save more! You’re posts are amazing!!
One thing we haven’t mastered is if our money is in the bank we will spend it. So we give our money to my sister in law. (I know she could totally spend it and I would be crushed. It’s risky but we trust her.) SHE is an amazing saver unlike us.
She knows that we are trying our best and that is how we keep our money from ourselves. 😉
Thanks so much for these posts I know a few people who would appreciate them as well.
Jessica
I say do whatever works for you! Way to go for being responsible. 🙂
Jessica,
Don’t know if you will see this message, as you made this comment several months ago. Just wanted to let you know what we do to “protect” our money from ourselves. We opened a savings account at a credit union in town, but about a 30 min. drive from our home. Then we chose to not receive debit/ATM cards. The only way we can pull money from the account is to physically show up at the teller window. If we need $ for an emergency, it is not a long drive, but we’ve made it just inconvenient enough to make it uncomfortable to access. We also have a monthly $50 direct deposit to the account, so it has slowly grown without us depleting it for things we think we “have” to have. Anyway, it has worked well for us, just a thought!
I just came across this website. It’s very helpful. Our family is also six, and I stay home. We have just moved back to the US after spending nearly our entire lives abroad, staring from scratch in every way, financial, work history, house, credit, –everything! It’s been a huge adjustment. We’ve gone into debt several times, and have 4k on our credit card again, due to a move, buying a house (100 down FHA loan). We really need to get a grip on our finances, budgets and all of that. I know it’s very personal, but I so appreciate that you actually share your figures. I often find financial counsel unhelpful as it comes from people making over 50K-75k per year. That’s simply not what I am dealing with! So, thanks for putting your family out there! God bless you!
Welcome Maria! I am so glad that you feel encouraged. 🙂
Many of the tips you have seem like such common sense to me. When you pay off one bill, you put that money into paying off another bill. I do this too and I am always stunned by friends who view that as “extra” money! Save your tax refund or pay off credit card debt… The less money problems you have, the better! You have great tips and I thank you for sharing!
Thanks for sharing! Ever since my husband’s job was cut to half-salary in 2010, and then he was laid off 6 months later, I have been almost fanatical about paying off our debts and keeping money in savings. It’s good to get back on track after years of floating along. He was unemployed for a year, but now works for the same non-profit in another state, and we’ve improved our financial situation dramatically since 2010. Financial scares like that certainly make you look at your money differently.
Have you used mint.com? It’s free and you can link up your bank accounts, etc and also create budgets as well as goals. Can’t be free, right? haha
I recently started reading your blog and I wanted to say thank you for your candor and honesty. I quit work last July at 7 months (pregnant) to stay home with my then 15 month old son and prepare for the birth of my daughter. I had worked for 14 years almost continually (I had a 9 month break when we moved from another state several years ago) and was very nervous about losing my income. After our first 10 years of marriage, having two incomes with no children it has been quite an adjustment to 1 income and 2 children under 2. I don’t plan on returning to work and we have decided that I will homeschool our children.
While my husband makes a good income, I have noticed lately that it is taking everything he makes just to live and pay bills. We save quite a bit, but have had numerous unexpected expenses to deal with almost since the day I quit work. Once I found out I was pregnant with my daughter, I decided to sell my newer (purchased before we had our first child) car and my mom graciously offered us the use of her 3 door mini-van. It was 14 years old and well taken care of but we recently took the plunge and bought a newer used van. My husband’s 6 year old truck is approaching 300K miles and we needed something that would be more reliable for a family vehicle. I thought we had prepared well enough and saved enough not having a car payment for almost a year to afford a newer vehicle, but I am finding that is not the case. I plan to put into practice some of the tips and suggestions you have here and hopefully we can get on track and reign in our spending. Two in diapers is not fun!!! We plan on potty training our 2 year old soon so that will help cut expenses. Our food budget is atrocious even though I meal plan and budget it is often sabotaged by a “helpful” hubby who will stop to pick up milk and come home with $30 worth of groceries. He understands my budget, but doesn’t get that $30 extra per week adds up quickly when you spend 1/3 extra of your weekly budget. We had a discussion today and hopefully this will resolve his spending transgressions!
Thank you again and God bless!
That’s how much we pay also and we have shopped around too. Life insurance isn’t as cheap as people think, even for a person that is rated in the top tier. The quotes you see around the internet and maybe in an insurance office is for barely any coverage. That wouldn’t help a family hardly at all if the sole bread winner died.
So excited to hear you guys got the emergency account in place! Ours as saved our bacon SO many times. It’s hard to get it in there, so my hardiest congrats! =) Starting a new budget plan this weekend thanks to you!
thank you for sharing….I have a question, instead of a 2nd checking account,I am going to start putting $$ into a separate savings account for the non monthly bills- do you think this will work? If not,why not? I really like your plan to put those dollars aside as you get them-and want to do the same.
I think a savings account would be fine. When you need to pay a bill you can just transfer the money as long as there are no penalties. With our bank we were only allowed 3 withdrawals a month from a savings account.
ok-thanks for the input!
Reading your posts have been so helpful! My husband and I are newlyweds and my husband, a student. My (moderate) income pays the bills but we got ourselves into financial credit trouble with our wedding, becoming new homeowners and just basically living beyond our means. We now have a financial counselor and I am becoming a savvy budgeting/couponing blog reader and do-er. I like your blog, by far, the most. You give me hope that we WILL get out of this “hole” and it is possible with one income and by making small, concsious efforts!
Thanks so much Jenna. You can definitely get out of it and I am proud of you for doing what needs to be done. Good job!
I just want to say Thank You for sharing it really does make a big difference to know that it can be done. I am a stay at home mom and homeschool our children so we know all about one income. It is very encouraging to hear others that face alot of the same struggles we face. Thanks again for sharing. Blessings to you and your family.
Thank you for sharing your information. You are an inspiration. Last year I left a very good high paying job to stay home with my kids. While our income is not as low as yours, I was the higher earner so our family of six is now living on 45% of what we used to. We are doing ok but I will say it took exactly 3 months to get on track. I expected this and we probably were overly frugal for those 3 months but it taught us where we had to cut more and where things could “give” a little. I recommend everyone undergoing such a drastic change give themselves 3 months to figure things out.
we also decided this year something had to give, so instead of opening another checking account(since we have 3 already due to home buisnesses) we are going to just put that extra money for non monthly bills in our savings. that way if its not all used we are still saving extra:) your openness has really helped us get on track. thank you so much
You are very welcome Karen! 🙂
Karren,
I also have a savings account instead of another checking account. I then use an excel spreadsheet to keep track of what has been deposited or withdrew from each category. Ive been doing this for about 5 years nd it’s been super successful for me!
Thank you for the post. I am changing over to the cash envelope system and am really keeping up with the nickels and dimes because they DO make a difference!