Monday, March 4, 2013

Living Debt Free on Under $50K a Year

Whoa. That title sounds ominous, doesn't it? Absolutely. Sounds impossible, doesn't it? Absolutely. But we're doing it and have for a while now. What's the secret? Well, let me first explain what we've done, and I'll tell you how YOU can do it, too. With a little sacrifice, a little sweat, and a little grunting. If you're interested in saving money, there are ways to do it. It may be difficult, but with a little time and research, you can do it.

We homeschool.
I have a degree in education, and when I decided to stay home the first year of my second child's life, I ended up deciding to stay home permanently and chose to homeschool. That said, we don't have private school money leaving our pockets, but we DO pay for textbooks and other supplies needed to accomplish our school year. For example, we bought a nice microscope with LCD screen and camera. It cost nearly $200, but it was a necessary purchase, because there were no options for  us to borrow a microscope from our library or local university. On average, it costs us about $600 a year to homeschool. That's including textbooks, supplies for the year, etc. We have a university nearby where we occasionally check out manipulatives or other items from the education section. We also utilize our local library, use some online freebies (including free typing programs). Below, you'll see a list of my favorite online websites that we use regularly during our homeschool year.

We drive old vehicles.
My husband's truck is fourteen years old. My SUV is thirteen years old. We bought them used several years ago, paid them off after a few years, and now we have no vehicle payments. Sure, we have random repairs that have to be made, and some costly (my vehicle currently needs a wheel bearing replaced--I think we've had the other three already replaced). But it still is cheaper for us than having a monthly $250-$300 payment. I don't need a pretty vehicle with all the bells and whistles--if it gets us around and can get me through snow and ice, I'm good.

We buy cheap.
We always buy things frugally. We buy school supplies, toiletries, etc. in bulk and store things in cabinets, closets, under our beds, in the building, etc. We look for sales, use coupons when we can, go to yard sales and visit stores like Goodwill. We can't always find something on sale, but we try. Expensive stores are not on my radar unless they have massive discounts.

Discount Books
I make great use of swapping sites like PaperbackSwap. I'm able to trade books with individuals who have something I need. And since new textbooks are fairly expensive, I get a lot of the boys' textbooks used on Amazon.

There are a lot of books I'd like to have right now, but I wait to see if I can get a great discount before I buy. Gone are the days of pre-orders!

I also check out the freebies section at Amazon, I get emails from my favorite authors so I don't miss out on great deals, and I check Facebook for great deals on books as well. A lot of times, my favorite authors will let their fans know about great deals and freebies. And naturally, I check out books at the library fairly frequently.

I also am able to get a lot of books for free by reviewing them. You can read my reviews to find out how to get involved in that, too.

College debt.
We have no college debt. We both went to a work-study college and never took out loans. That's incredible, I know. If you can attend a work-study college, I highly recommend it. If you can't, many universities have work-study options to help you better afford tuition costs. If you have to take out college loans, and I know most people do, make sure your loans don't go into default--if you must, have them deferred. Pay them regularly, and make sacrifices in order to make that happen. If you go into default, you may have to kiss your immediate financial future goodbye, because you will have a hard time building up your credit, may have a hard time getting an apartment, etc. And then of course, there's the collections agencies that will drive you nuts, and the possibility of having your tax returns kept by the government, because they WILL get their money from you somehow.

Buy with cash.
The joy of buying with cash means no monthly payments. And we have found that many times if we buy with cash (especially at a gas station here in town that we frequent), we get a discount. Look for these stores, and don't be afraid to ask if they will knock off a little of your bill if you pay them the full amount right now. You can also ask your doctor's or hospital's billing if they can knock a little off your bill if you pay in full. We have saved some money on medical bills this way.

We also buy our groceries with cash. We pull out what we need from the bank. Any leftover grocery money is saved for family activities or for something we really want. Sticking with using cash only at the grocery store means that you don't buy what you don't need. It's harder to go over your budget this way.

Credit Cards - emergency or online use only!
The use of major credit cards (Visa, MasterCard, etc.) shows credit agencies that you can juggle your finances. I've heard some folks recommend that an individual have three credit cards--one in a safety deposit box for safety reasons, one in your home (in a firebox, preferably), and one or two in your wallet. The idea is to use at least one credit card on a fairly regular basis to keep your credit score up. When I need to make a significant purchase, which happens a couple of times a year (usually online purchases for curriculum and Christmas gifts), I make sure I can pay it off right away because I don't like to carry a balance and pay unnecessary interest (if I can help it). Retail store credit cards are a waste for me, so we only have one major credit card. (More about retail store credit cards in the next paragraph.) We use the credit card for emergency purchases or for online use.

The problem with retail credit cards is that while they may save you 10-15% on your purchase, the interest rates are usually insane. So if you absolutely have to have one, make sure it's a store you frequent a lot and only use it when you know you're going to pay off the balance right away or at least be able to pay off a large portion of it. Also, be wary of applying for multiple retail cards: for every retail store credit card you apply for, your credit score goes down a little because you're making a credit inquiry every time you apply.

Basic electronics
Cell phones
My husband and I have "dumbphones". There's nothing smart about them. Ha! We pay about $80 a month for our cell phone service, and our 13 year old has a ten dollar Tracfone for which I tri-monthly purchase about 200 minutes (and with the double minute benefit, we get +240 minutes for a total of 440 minutes) for $40. So, roughly his phone costs us $10 a month for a total of $90 a month for all three cell phones.

We have cable internet and cable. It's expensive, or at least it is to me. We pay $130 a month for cable and internet, which is insane, and this is another area where we are going to tackle. Our plan is to eliminate cable, get local channels only through a flat antenna, and subscribe to Hulu and/or Netflix. We will still have to pay for internet of course, but we should be able to cut that $130 bill in half.

Basic technology
I don't purchase expensive computers. I don't see the need--they become obsolete right after you buy them. lol When I need a new desktop, I save my money, and buy a new machine only (no monitor). My current PC was  purchased in February 2007 and has needed to be replaced for a year now, but I'm working right now on a $360 laptop (which, unlike the model linked, has only 1GB RAM).

I have no ipads, ipods, or other fancy gadgets. I do have a black and white Kindle that I bought two years ago that gets a lot of use. My boys bought Kindle Fires after Christmas of 2011 after having saved their birthday and Christmas money.

Have cash saved.
As you read above, I'm a big supporter of paying with cash. I'm also a big supporter of saving. It's hard to do that if you have several big repairs (replacing carpet, appliances, furniture, car repairs, etc.) at once, but you can do it. Putting back $20 a month adds up. We also put almost all of our spare change into savings. We make sure we have some money in savings for emergencies. Tornadoes and floods don't happen around here too often, but if one did occur, we'd have some money to put ourselves in a hotel and buy the clothes and toiletries we'd need.

We try to keep a good bit of money in savings so that we can pay with cash. We were able to pay for our son's braces by writing a one-lump sum check. It quickly depleted our savings for which we were hoping to use to buy new living room furniture, so now we're trying to build that back up. But that's what we do. We may have furniture that is greatly in need of replacing, but we don't live in debt. We live within our means and practice patience. Sure, having to wait results in grumbling on my part (lol!), but knowing that we aren't carrying debt helps me sleep better at night.

Eat at home.
Cook at home
This is a big issue for some people. The more you eat out, the more you tend to get used to doing that.  I'm a Wendy's nut. I like Wendy's chicken nuggets, but they're not exactly good for me. When I cook, I know what I'm buying, and I know exactly what's going into my food. My cooking is always cheaper than buying something at a restaurant or from a grocery store's ready-made food section. If you don't know how to cook, utilize youtube. There's a wealth of cooking lessons, tips for cooking, etc. And of course, the internet is a never-ending source for recipes. Granted, not all of them are great (I've found out the hard way a time or two--lol), but it's a good place to start if you're looking for something.

If you are very busy and on the go, consider freezer cooking. That's a once (or twice) a month cooking spree where you cook several meals and pop them into the freezer. You can make on-the-go breakfast biscuits, single-serve soups, or even whole meals. Google "freezer cooking", and you'll find a lot of great recipes and instructions for how to do this. You'll love yourself for it!!

Grow your own food
If you can have a little garden (or have room for a big garden), I highly recommend it. We're living in a country where pesticides are used on a regular basis, and obviously there's the concern over GMOs (genetically modified organisms) in our food.

Gardening is time-consuming but such a blessing. When all is said and done, and you're eating great tasting food that you've had the joy of watching grow, you'll be so glad that you took the time to do it. And if you can can your food, that's even better. Learning to can is not difficult, but it does require some time to make sure you can properly. We've never bought a pressure canner (last year we borrowed one), but this year we're thinking of investing in one. Having your own home-canned foods is cheaper and healthier for you.

Live in a reasonable home.
When we first moved here, we had to move fast. We had two months to get here, and with our very very small budget, we knew it would take us forever to find a home within our budget (less than $70k at that time--can't find too many homes around here in that range!!) that would allow us all to fit inside. We struck out quickly and realized that paying $600 a month on a very small two-bedroom house wasn't going to work either. Our best option was to quickly purchase a single-wide 16x80 trailer (much more spacious than the homes we'd viewed) and plop it down in a nice trailer park. That was exactly what we did. Our home cost us $33k at the time, we paid $100 a month for our lot it was set on. The result now is that we have no mortgage, only lot rent. Sure, living in a trailer isn't glamorous. We've heard comments about "trailer trash" on occasion, but we're not worried about someone else's opinion on our living arrangements.

If you're having a hard time with your finances, consider down-grading. I don't mean move into a trailer--just down-grade if you can. Obviously, if you've got several children and your bedrooms are filled, that may not be an option. But if you can do it, consider it. It may save you thousands of dollars a year.

My husband makes under fifty thousand a year, and we're still able to afford to support our local homeless shelter bi-monthly and two other missions monthly. This is part of our budget that we plan for. If you have a charity in mind, don't discount it. Plan for it. Sit down with your bills, figure out how much you need to spend on groceries, and find out what's left over. Take a percentage of what's left (hopefully, you're not in the red), and if it's enough to monthly give that amount, then go for it! Most charities prefer monthly giving than one yearly amount because they need a monthly amount that they can count on. It's much easier for charities (especially for those struggling to make ends meet) to plan monthly costs with a monthly donation than it is to take a year's donation and divide it into monthly costs.

A Difficult Task at Times
Living on one income is certainly not easy, but it is definitely something that can be done. It means living on a budget, planning, and being patient. If you're used to "living high off the hog", choosing to drop one income to stay at home can be a sucker punch to the gut. However, you reap the benefits when you see that your kids are happy and thriving. You reap the benefits when you're not coming home at 6pm to hurry and cook, clean up, and help the kids with homework without passing out from exhaustion. Having time to do what needs to be done has been a great source of stress-relief for me. It's a sacrifice financially, but it's been one of the greatest decisions I've ever made. And my husband loves coming home to dinner, an eager greeting from his wife, and hearing his youngest son's feet pounding the floor as he runs to greet him.

The cost of staying at home is a salary. But if that salary is costing you MORE (grief, frustration, unhappy family, or very little family time) than staying at home, consider an alternative if you can. Not every family can afford for one member to be at home, but if it's possible, consider giving it a try. It's not necessarily an impossible feat!

- Getting out of Debt - Dave Ramsey's tools and books also check out your local library for his books
- Clark Howard - Advice on Saving, Bargains, and Economics!
- Homeschool links:
  • Paperbackswap - an excellent way to get rid of your gently used books in return for new gently used books!
  • Typing Tutor - a great freebie for those new to typing!
  • KISS Grammar - awesome grammar lessons and activities
  • Intellicast - for kids (and adults!) who love weather and want to see global weather maps live!
  • - addition, subtraction, and multiplication games
- About Credit Inquiries
- About Retail store cards
- Savingslist - a Great list of things you can save on!


  1. All very good tips! I'm living on next to nothing since the separation from Dawson, and I've employed most of your tips here. I drive a 20 year old vehicle, I have no credit card debt (although I do have student loans - how else can I afford $160k for med school?), I cook at home, I don't have cable (actually, I don't even have a TV), I live with roommates to split cost of living at a reasonable home a little outside of town to save on rent, and I am always looking for deals. =)

  2. Valerie, I don't envy you the med school costs!! But you've gotta do what you love, right? I like living frugal, but I will boldly admit that I would never turn away Publishers Clearing House if they knocked on my door! LOL!

  3. Keeping a low profile comes along with debt-free living, unless you're filthy rich. But economic footing certainly doesn't dictate who are to live free of debts and the opposite. It's all about knowing how to keep balance. And with what I'm seeing, you're household has it. Keep it up! Toronto Bankruptcy Advice


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