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hmbress
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| Posted: Aug 11 2012 at 8:01am | IP Logged
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WARNING - LONG!!!
I need help with finding ways to trim our expenses. We moved to the Washington DC metro area two years ago from Michigan and for the first time in our married life, finances have been an issue. Allow me to lay out our situation:
We previously had a teeny tiny 1000 sq. ft. house that was perfect before kids and completely inadequate with kids. Due to circumstances beyond his control, my husband's PhD took 15 YEARS to complete (part time while getting a salary that allowed me to be at home), so for a very long time I felt discontented and stuck, not being in a position to look for something better, since we didn't know where he'd get a job once the degree was complete, and the entire time he kept thinking it would only take 1 more year .... ugh.
So he finally finished, got a great job with significantly higher pay and it was very exciting for me to get the bigger, nicer home that I had been longing for for so long. It was quite an adjustment to have a mortgage again - our previous home had had a 15 year mortgage that we paid off in 11, so while we had a smaller home, we also had been enjoying having enough money that we could take fairly nice vacations, afford remodeling projects, and adopt two children. We always had at least several thousand or more in the bank, and never had to worry about being able to afford smaller purchases (clothes, stuff for the house, etc). We were able to afford music lessons and gymnastics for the boys.
Not only were we used to not having a mortgage payment at all for so long, but housing costs here are almost double what they are in the Detroit suburbs. AND our Dearborn (home of Ford Motor Company) house had lost over half it's value over the previous 2 years due to the local economy - 3000 white collar layoffs translated into over 700 competing houses (lots of them foreclosures) on the market when we were selling. We got a little less for our house than it had been purchased for 15 years prior, and no return on the $40K+ we had spent on improvements. The upshot is that DOUBLE HOUSING COSTS + SMALLER DOWN PAYMENT = HUGE MORTGAGE.
But that still seemed doable with dh's large salary increase. We thought we might need to stretch for a little while, but with raises and bonuses (which have indeed come through nicely), we'd soon be more comfortable with the mortgage payment.
IT AIN'T HAPPENING. We severely underestimated the impact of the much higher cost of living here. Our grocery costs are twice what they were in Michigan. If we want to dine out it costs 50% more with way smaller portions. And TAXES! Oh my. We had no idea. They are so much higher here in general, plus, in addition to the federal, state, and property taxes that we were used to, there is also a COUNTY tax which is significant that we didn't know about when we purchased.
We are in a situation where, while we always pay off our credit card each month, often it is very close to the wire and so stressful juggling all our bills so that cash-flow-wise we can make the payments without overdrafts. We are realizing that we really should have gotten a less expensive house, but there isn't anything that we can really do about that (I don't think) since we've only been in the house 2 years and it's value has decreased a little. It wouldn't make financial sense. I feel embarrassed about this. We've always considered ourselves to be the type who live within their means, and looked down on those who were "house poor", thinking that we'd never put ourselves in that kind of situation. And yet here we are - it's humbling.
We recently had a spate of unexpected expenses ALL AT ONCE: heat pump failed ($8000), sump pump failed ($500), storm door broke ($120), brakes failed on the minivan ($350), lots of unexpected co-pays due to some health issues, car insurance increases because of an accident (pedestrian stepped out in front of me and I swerved to avoid hitting her and hit another car at low speed and I am being penalized for this!  ), vacuum cleaner and dishwasher broke, etc. Thank God we were able to get a 24-month interest-free loan on the heat pump or else I don't know what we would have done. But now we of course need to make payments!
We just cannot get ahead here. Even with a really good job, my husband is stressed and feeling like he isn't a good provider! I am having a hard time not being able to go out and buy things that I'd like. We have home projects we'd like to do but can't. We keep thinking about maybe adopting again but can't afford to do it.
I know, poor me, poor me, (pour me a drink!). So we have to watch our spending now. So we have to go camping instead of renting condos for vacations. So we have to delay some purchases. We have a beautiful home, it is furnished, we have three 401Ks and stocks awards from dh's company, so we're ok as far as retirement savings. We do still pay off our credit card each month. We are still able to tithe. We even have 2 months expenses in an emergency fund (due to a windfall inheritance). We have health care benefits. We are still better off than 99% of the people in the world. So I feel guilty about "complaining" about our situation at all.
But still. I'd like to find ways to cut some costs so that there is less stress and so that we can once again be in a position to adopt if we discern that we are called to do so again. We'd like to be able to afford music lessons and gymnastics again. So I am looking for suggestions.
We don't eat out much or hire babysitters much. I don't buy much processed or organic food, I cook from scratch. I shop thrift, consignment, and Craigslist whenever possible. We've switched to an alternate energy supplier. We keep our thermostat set higher in the summer and lower in the winter. I use rain barrels for the garden and we don't bother watering the lawn anymore.
We've looked at getting rid our our landline and cable (which we never watch anyways) but then we lose the Verizon FIOS bundle discounts and I'd need to increase my minutes on my cell and get some kind of prepaid phone for my son or babysitters to use when I'm not home, and so it doesn't end up saving much if at all. I AM going to get insurance quotes to see if switching is a possibility for some savings there. I am putting a hold on used-book sale shopping (which kills me  ).
But what else is there?????? I'd especially like to find some ways to trim the grocery bills but just cannot figure it out. I shop Aldi rather than Giant when I can, but even so our grocery bill is between $800 and $1000 a month for 2 adults, a 9yo, and a 6yo! It's ludicrous! And I shudder to think about that amount going even higher as the boys get older! I haven't found buying co-ops to save much here. In Michigan we had produce markets that bought the aesthetically imperfect produce from Eastern Market in Detroit and so I could get a week's worth of produce for about $25 (and we eat a LOT of fresh fruits and vegetables!). We had Gordon Food Service and a bulk foods store, both of which also afforded major cost savings, and I haven't found their equivalents here either. I've tried Costco, but we're a small family and I don't buy a lot of processed or canned foods (only canned tomatoes, stock, refried beans, tortillas, and salsa) or cleaning supplies, so that isn't worth it for me either. I grow a lot of my own veggies, so CSAs wouldn't help either. We eat oatmeal rather than packaged cereals. Bread is inexpensive at Aldi although I haven't ever tried to figure out if baking bread would be a significant savings. I guess I could look at buying freezer meat again, but when I've done it in the past I've ended up with not enough of the cuts of meat we most liked, and too much off the kinds we didn't.
Any suggestions? I figure that those of you with larger families MUST have some tricks I am missing.
PLEASE HELP!!!!!
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Heather Rose (ds13, ds10)
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DianaC
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| Posted: Aug 11 2012 at 9:36am | IP Logged
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I highly recommend the book The Total Money Makeover. I read it about 18 months ago as I was looking for a good resource to give to my son who was close to graduating college.
Even though we've been pretty good about our finances (we have a sizeable savings and no debt besides our mortgage), I learned some tips from the book. Basically, it taught us to further examine how we handled money. I rearranged our budget plan and we were able to save significantly more than before and we have a much sooner pay-off date for our mortgage - just be re-ordering our budget!
To get out of your "log-jam" he recommends things like selling items around the house that you don't use. Sell your vehicles (if they have enough value) and purchase vehicles that cost less leaving you with some extra cash. Also, consider not using credit cards at all - there are plenty of studies that show that we spend a higher percentage when using cards than when paying cash.
Also, to ward off some of the feeling that you can't buy things, put a small amount of spending money in your budget for you and for your husband - even a very small amount gives you that feeling that you have some freedom with your money.
As far as groceries, I have saved a lot by gleaning the reduced shelves at our grocery store as well as checking to see if any meats/produce/dairy have been marked down because of imminent expiration dates.
Couponmom.com is a great source to quickly find the best sale prices and match with available coupons. I don't want to spend a lot of time with coupons, but getting to know this site has saved a lot of time and money.
Really watch for unit prices. I try to buy everything when it is at its lowest sale price and stock up big time.
Also, we've taken advantage of any programs that our utility companies offer for managing our can't-do-without bills. We've raised the ac temp in the summer and reduced our heat temp in the winter, as well as putting our hot water heaters on timers. We've saved a lot this way.
Check on things like your auto and homeowners insurance. Sometimes you can save a lot by adjusting your deductible. Also, the replacement value on our homeowner's insurance had increased quite a bit more than actual value, so we adjusted that and got another decrease in premium.
There are so many ways to cut bit by bit - I really recommend getting the book for a great encouragement and re-directing of your budgeting plans.
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Kathryn
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| Posted: Aug 11 2012 at 10:06am | IP Logged
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I don't know if this is really much help with your overall question and obviously not knowing your retirement nest egg, if you feel the call to adopt, I would borrow or withdraw from the 401k money in a heartbeat. That window and time of your life for raising children is so short- lived that I wouldn't want to enter my retirement years with a big nest egg and much regret for not having more children. Obviously that would take substantial prayer and consideration but thought I'd throw that out there for you in regards to bringing another child into your home. We don't live in an area with such high living expense so outside what you've already done, I don't really have much to recommend. For example, our family grocery bill for 6 is about what yours is for 4 and honestly I do buy a lot of processed foods. I'm not such a great cook and feel like from scratch takes so much of my time so a box of hamburger helper with a few extra veggies and a side dish goes a long way to keeping us out of the restaurants.
I do sell a lot on ebay (some on craigslist) which is a way to bring in extra money for most of the kids extras...ballet, baseball and school books! I started by garage sale-ing and finding things to resell and then moved into another niche and it's been pretty successful. Like Diana posted you could start by selling some items around the house thru ebay and/or craigslist.
Good luck!
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Kathryn in TX
(dd 16, ds 15, dd 8, dd 5)
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DianaC
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| Posted: Aug 11 2012 at 10:29am | IP Logged
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One more thought: depending on your current mortgage's interest rate, you may want to consider refinancing at a lower rate - the rates have dropped significantly. Check-out Penfed. Right now a 15 year fixed mortgage is at 2.625%. There are lower rates as well if you're willing to pay points. And, anyone can join Penfed by joining an auxiliary organization with a one time fee of around $25.
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Kathryn
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| Posted: Aug 11 2012 at 10:57am | IP Logged
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Another thought is to consider fostering. I know that's a whole other issue but just brainstorming with you in case you've visited that idea before.  Also, if you seriously wanted to downsize your mortgage, maybe you could have a Realtor give you a market analysis. Again, we're in an area where prices always stayed relatively stable but they are increasing and have been the entire year. We're actually moving and our market value is back where it was in about 2006 and the house we just bought appraised for $8K more than we paid!  So, you might be surprised as the economy is starting to turn somewhat that you could possibly get out from under that house (without paying) and into another one.
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Kathryn in TX
(dd 16, ds 15, dd 8, dd 5)
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Kathryn
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| Posted: Aug 11 2012 at 10:59am | IP Logged
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DianaC wrote:
| One more thought: depending on your current mortgage's interest rate, you may want to consider refinancing at a lower rate - the rates have dropped significantly. |
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Yes, this is true as well. We actually went with a 30 yr fixed for 3.75% and .79 point. I can always pay more when bonuses or extra $$ comes in but when times are tight I don't want to be obligated to that higher payment on a 15/20 yr note.
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Kathryn in TX
(dd 16, ds 15, dd 8, dd 5)
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JodieLyn
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| Posted: Aug 11 2012 at 11:29am | IP Logged
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If you're cooking your purchased fresh veggies, you might want to look at the difference in cost for frozen. Frozen can be "fresher" than fresh veggies since the processing plants are close to the growers and they're frozen at their peak.. while fresh veggies have to be stored and shipped and sit around the store etc.
Figure out the cost of meals that you like.. and you can save money just by adjusting to your cheaper meals interspersed with the more expensive ones without having to change your whole style of eating.
Consider cheaper alternative ingredients. Chicken or pork is less expensive these days than even the cheap cuts of beef. And vegetarian meals can be cheaper. Beef burritos here give way more often to bean burritos.. or chicken fajitas.
Look at things like juice and milk (I've read milk should be considered a food not a beverage.. don't drink it because you're thirsty) and other beverages.. are you drinking stuff that's not necessary for nutrition when you could be drinking water? or tea? If your water doesn't taste good.. get a filter system.
Watch the coupons and sales. You might think it's only a few cents here and there but when it starts to become a few cents on EVERYTHING you buy.. it starts adding up quick.
If pasta is on sale this week.. buy it for the next 3 months, don't just use it in meals this week. When chicken is on sale same thing.. as you get more items stocked up that you buy on sale, you'll find you're able to start making full meals with things that you bought on sale.. all the time.
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Jodie, wife to Dave
G-18, B-17, G-15, G-14, B-13, B-11, G-9, B-7, B-5, B-4
All men who have turned out worth anything have had the chief hand in their own education.
-Sir Walter Scott
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mathmama
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| Posted: Aug 11 2012 at 11:31am | IP Logged
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No advice, but I will say that it seems that the first 5 years in a house are tough. When we bought our current house we were making it by the skin of our teeth each month and the winters were brutal wondering if we would be able to pay everything and still pay off the credit card bill. Now, 8 years in things are much, much easier. Dh has gotten some raises, which have helped, but I really believe that moving is costly no matter what and it takes some to recover from. Currently our house is for sale and I can get depressed thinking about how moving to a new house will mean several years of tight finances again 
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Beth, wife to Tom and mommy to 4 beautiful girls:
Therese 11/04
Anna Mary 6/07
Veronica 10/09
Theodora 11/12
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pumpkinmom
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| Posted: Aug 13 2012 at 1:21pm | IP Logged
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Just a few suggestions (and some have already been mentioned).
Refinance the house (this saved us $200 a month!!)
Shop sales and stock up
Shop garage sales for clothes and other stuff the kids may need.
Get rid of cable/statellite Wwe did this two weeks ago, only saves us $45 a month, but we need to work in a car payment. We have Netflix which is $8 a month and we did have to buy a $70 antenna to pick up local channels, but it will pay off in two months.
Have a garage sale! We do these whenever we need money. We are having one in two weeks to raise money to buy fall/winter clothes. If you have a lot of stuff, downsizing will help bring in some extra money. I know it can be hard to get rid of stuff, but it feels good afterwards when the house is cleaned out.
Downsize the cars. Perhaps you can live with a less expensive (cheaper on gas) car. I can't tell you how many people I have seen do this lately. I have seen families driving mini vans and big SUVs downgrade to a mid size car. I have had to borrow my mom's van a couple of times to pick up large items or get a big number of kids to a certain place, but having a small car has paid off for us.
The most important thing is just to relax and pray for God's guidance.
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Cassie
Homeschooling my little patch of Ds-14 and Ds-10
Tending the Pumpkin Patch
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kristinannie
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| Posted: Aug 13 2012 at 2:26pm | IP Logged
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I have to say that I completely understand where you are coming from. We had a small house that we had almost paid off. Our mortgage was $700 a month. We were able to basically buy or do whatever we wanted to, when we wanted to. Then we moved and had two mortgages for almost two years (totaling more than $3000 a month). At first I really mourned the loss of our financial health, but then God really showed me that I needed to regulate myself more even if we still had the money. It was a LONG conversion for me and I fought it tooth and nail.
Here are some of the conclusions I have come to:
1. I was extremely selfish. I was constantly complaining about money to people who had significantly less than me.
2. I wasted a lot of money. I thought I was leaving on a bare bones budget, but I was so used to spending freely that I had a distorted view of a bare bones budget. Even though the cuts hurt, they weren't enough.
3. I would take a comfortable living situation and our new home over vacations and other expenditures. Vacations are nice, but temporary. My home was permanent and our lives improved significantly.
4. It is OK to treat yourself occasionally. When I tried to never buy anything I wanted, I would end up spending more money because I would buy smaller things that I didn't really want. I guess that is kind of like dieting. You give up all of the foods you love and then one day you just start binging.
5. God taught me to trust him alone in our finances. When large expenditures came unexpectedly, we always had the money to pay. God never abandons you. Although we were really hurting financially when our house finally sold (and had to borrow a lot of money from parents to pay the bank), I think we HAD to come that close to the poorhouse to redeem our sinful spending. God needed to take us to the edge and then send us relief. 
Here are some of the ways that we were able to save money:
1. Take a close look at utilities and figure out the cheapest options for phone, cable, internet, etc.
2. Combine trips to save gas. I will never go somewhere more than 10 minutes from my house without doing at least 2 things I have to do.
3. See if you can raise your deductibles for insurance so your payments will go down. In our case, the money we save in 2 years will more than pay for the difference in deductible.
4. Get a large freezer for your basement or garage. Whenever meat goes on clearance or on a good sale, you can buy a lot and have it on hand. My husband bought 6 pork roasts today because their sell by date is tomorrow. We are using one and freezing the rest. You can also buy in bulk from Costco and put it in this freezer.
5. Plan your menu based on sales. See which fruits and veggies are on sale and use those in your meal planning. Shop at more than one grocery store to take advantage of more sales.
6. Before you make a purchase, take a few minutes to think about whether you want it or need it. If you aren't sure, wait a few days and see if you still need it. I almost never go back to buy it.
7. Buy clothes during the clearance of a season for the next year. I buy one size up this way and never pay full price for clothes.
8. Ask for things you need for birthdays and Christmas. I ask for books we need for school and that saves on my school budget.
Mostly, I just really think you need to bring this prayerfully before God. I am not implying that you have the same issues that I did so I am not judging you. I am just telling you what I learned from a similar experience. Changes like this are very painful, but honestly, I have become such a better person through this experience. God truly uses all situations for good. I will pray for you.
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John Paul 8.5
Meredith Rose 7
Dominic Michael 4.5
Katherine Elizabeth 8 months
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Kathryn
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| Posted: Aug 13 2012 at 2:35pm | IP Logged
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I agree about clothes and groceries. Those seem to be my 2 biggest "adjustable" expenses and WHOA, were they big when I added them up. With 4 kids now I rarely buy new anymore...it's usu. thrift store, hand-me downs, garage sales or off-season at deep, deep discounts. Granted, shoes are even a big expense and I do get those new but again, pretty inexpensive styles.
Others have great ideas about groceries that are prob. even better than what I do.
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Kathryn in TX
(dd 16, ds 15, dd 8, dd 5)
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mamaslearning
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Heather, I can so empathize with your situation!  We are facing similar cuts due to the poor economy (hubby took a 40% pay cut two years ago, we added a fourth child, and cost-of-living expenses keep rising). It's very frustrating when your pay goes down and your costs go up. We too felt we were expert money handlers, had savings built up, retirement funds, pay off the credit card each month, etc. We only have necessary expenses (no cable, no cell phones, nothing extra to cut of the budget except Internet connection). Luckily, we still have a very small house payment but a car accident created a car payment (which we haven't had in over 10 years), plus illness, surgeries, and a host of over 'life' things have used up our buffer.
It's very difficult to be forced into a mode of life you never expected, not that anybody every expects to be living paycheck-to-paycheck. I still lament the loss of vacations, outside lessons, new clothes, and other extras that make life fun, but I'm learning contentment. It is EXTREMELY difficult! I still get angry and lament, "Why me! Want did we do wrong?" but honestly, we didn't do anything wrong. We made the best decisions we could along the way.
I'm trying to internalize Kristin's outlook and use this as an exercise in trust. Our situation isn't changing, but maybe my attitude can (not that I'm saying you need to change yours, just offering my personal story).
So, no advice, just some and empathy.
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Lara
DD 11, DS 8, DS 6, DS 4
St. Francis de Sales Homeschool
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TracyFD
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I have to admit that we are in a similar situation.
We moved from a starter home on a 15 year mortgage to a 2200 sq ft home in 2003. After taking refinancing advice from a Catholic financial planner in 2006 we now have an upside down mortgage, so it doesn't make sense to move (short-sale) and downsize. We are one year away from paying off the van and my grad school loan, so it doesn't make sense to sell the van. My husband commutes in a '96 Accord. I have tried coupon websites but the coupon printer stuff always messes up our computer.
I have priced out groceries and found that while Costco is usually less per unit than Aldi, we tend to spend more a month if we buy mostly from Costco, and we tend to think we can afford to buy organic items at Costco. I am considering trying the eMeals service with the Aldi plan. Does anyone have experience with this program to share?
When I take a close look at our budget it looks like the only way to live within our means and to build up a 6 mo safety net is to put the kids in public school and cancel music lessons and ballet (I would love to find out how to get an arts patron!).
I sometimes feel like we did things backwards by having children before we had substantial savings and no debt; being open to life right away without establishing a firm financial foundation keeps us depending on God's mercy. Somehow he keeps us afloat, but I agree that it's heartbreaking for a husband who earns a great living to feel that he still can't provide enough, however we define "enough". I guess I just want my kids to have both a richly loving home/spiritual life AND an activity they enjoy that will enrich their life now and in their adult years.
I will definitely check out the Dave Ramsey book from the library (3rd in line). It seems that all the financial planners we have met with only want to sell insurance products instead of taking a red pen to our budget.
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Tracy
Mom to 3 girly girls,
1 absent-minded professor, and one adorable toddling terrorist.
Pinewood Castle
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4Real Forums : Our Lady's Loom, Larder, and Laundry
Topic: Financial Quandary
