Hey! I am Sarah at Liza in the Lou. Stasia and I went to college at UGA together and have stayed in touch through blogging. We both have adorable little girls-- and I would be remiss if I didn't include a picture of my Elizabeth:
As the mom of a now almost 5 month old, I am LOVING being at home with her. The decision to leave my job was a very hard person decision but not difficult from a financial perspective. My husband is a resident and is by no means making the big bucks (his salary is online in case you're curious). Why is this you ask?
In the almost 6 years we've been married, we have never lived off of more than one income. For the first four years of marriage, he was a student and I was our sole income provider. This past year was the first year in our marriage that we both worked. We made the decision to continue living like we were living on one salary.
Consider this: It was just one generation ago that couples and families lived comfortably on one income. And while the cost of living has increased, so too have wages.
When I think back to how we've made one-income living work for us it is NOT because I am a budget-spreadsheet woman who line by line itemizes each expense. Instead we've used the principals below to stay on track:
1. We keep our housing expenses low. In our 3rd year of marriage when many of our friends started buying 4-5 bedroom houses, we downsized from our rented ranch-style brick home into a 900 square foot, 3RD floor condo we lovingly referred to as the "tree house". Not only was the rent cheaper, but the decision to live on the 3rd floor saved us approximately $3000 over a two year period ($120 a month in energy utilities X 2 years = $2880 ). I think my husband and I would agree that not only was that a smart financial decision, it was a really fun time in our marriage!
2. Every expense has always been up for discussion. For example, in year #2 of marriage, we needed to free up room in our budget in order to save more. We looked at our fixed expenses and decided that the $39.00 a month that we spent on internet needed to be eliminated. For an entire year we exclusively used internet at work, the library or if we needed to work on a project late at night, we went to the Taco Bell down the street for free Wi-Fi (you can laugh at our frugalness, but we saved almost $500 in one year doing that).
3. We really save up for big purchases. For example, both of our cars have over 170K miles on them (2002 Honda Civic and a 1999 Toyota 4-Runner). Sure, I would love a newer car, but I also love that I am not making a car payment every month. Instead, are socking away money into a short term bond fund with the intent of using the money to pay cash for a car when one of our rides finally dies.
4. We pay ourselves first. This commonly used phrase refers to the practice of automatically making a savings contribution or investment with your income before it can reach your wallet. You “pay yourself first” when you contribute a percentage of your income to your retirement plan or savings account each pay period. The transfer to your savings or investment account is done automatically, before you receive the rest of your income for paying your monthly living expenses. When you pay yourself first, you ensure the specified amount of money you want to save really does make it into your savings account or investment, since it happens before you have the opportunity to use the money for something else. We also use this same concept for tithing to our church.
5. We try to buy everything used. One of my favorite blogs, the Simple Economist, does a really great job of explaining the Irrational Gap in Price Between New and Used. The point of his post is that products have a dramatic and irrational drop in price as soon as they are purchased. For the savvy individuals, this provides a window of opportunity between the time when an objects’ price has been devalued but the useful life is still strong. My husband and I literally buy ALL of our clothes at Goodwill. Every piece of furniture in our house is either 2nd hand or was purchased off Craigslist. We even buy unusual things at places like Goodwill... unopened boxes of diapers, unopened jumbo boxes of Hefty trash bags, Christmas lights, etc all at significantly lower prices than from a Big Box store.
6. We get creative. For example, I recently took my daughter to a class at Gymboree Music and Play. She had such a great time interacting with the other babies! At the end of the class, I inquired how much it would cost us to join. I was shocked to learn that 4 classes a month would cost us $65 ( annual cost of $780). At that point I had three options, 1) pony up the money and take a class 2) save the money and not take a class 3) start my own class! Guess which option we are going with? I found a really talented high school senior who is going to college to major in theatre and arts. This summer she is going to lead a group of my friends and their babies in a music and play class that is very similar to the classes at Gymboree. Each mom is going to pay $3.00 to cover the high school students "salary". It's a win for her, and a big win for us!
7. Surround yourself with other frugal-minded friends. One of the most helpful things we've done is surround ourselves with thrifty friends. When your friends are conscience about how they spend their money, you will likely feel less pressure to spend as well. A fun Friday night for us involves grilling hamburgers, playing Settlers of Catan and great conversation (for a grand total of $10).
If you have any questions about how we've reduced our overhead expenses or as I like to call it, our "glamorous frugal lifestyle" (because I never feel like I am having to miss out on stuff because I am too poor)-- feel free to contact me!
As the mom of a now almost 5 month old, I am LOVING being at home with her. The decision to leave my job was a very hard person decision but not difficult from a financial perspective. My husband is a resident and is by no means making the big bucks (his salary is online in case you're curious). Why is this you ask?
In the almost 6 years we've been married, we have never lived off of more than one income. For the first four years of marriage, he was a student and I was our sole income provider. This past year was the first year in our marriage that we both worked. We made the decision to continue living like we were living on one salary.
Consider this: It was just one generation ago that couples and families lived comfortably on one income. And while the cost of living has increased, so too have wages.
When I think back to how we've made one-income living work for us it is NOT because I am a budget-spreadsheet woman who line by line itemizes each expense. Instead we've used the principals below to stay on track:
1. We keep our housing expenses low. In our 3rd year of marriage when many of our friends started buying 4-5 bedroom houses, we downsized from our rented ranch-style brick home into a 900 square foot, 3RD floor condo we lovingly referred to as the "tree house". Not only was the rent cheaper, but the decision to live on the 3rd floor saved us approximately $3000 over a two year period ($120 a month in energy utilities X 2 years = $2880 ). I think my husband and I would agree that not only was that a smart financial decision, it was a really fun time in our marriage!
2. Every expense has always been up for discussion. For example, in year #2 of marriage, we needed to free up room in our budget in order to save more. We looked at our fixed expenses and decided that the $39.00 a month that we spent on internet needed to be eliminated. For an entire year we exclusively used internet at work, the library or if we needed to work on a project late at night, we went to the Taco Bell down the street for free Wi-Fi (you can laugh at our frugalness, but we saved almost $500 in one year doing that).
3. We really save up for big purchases. For example, both of our cars have over 170K miles on them (2002 Honda Civic and a 1999 Toyota 4-Runner). Sure, I would love a newer car, but I also love that I am not making a car payment every month. Instead, are socking away money into a short term bond fund with the intent of using the money to pay cash for a car when one of our rides finally dies.
4. We pay ourselves first. This commonly used phrase refers to the practice of automatically making a savings contribution or investment with your income before it can reach your wallet. You “pay yourself first” when you contribute a percentage of your income to your retirement plan or savings account each pay period. The transfer to your savings or investment account is done automatically, before you receive the rest of your income for paying your monthly living expenses. When you pay yourself first, you ensure the specified amount of money you want to save really does make it into your savings account or investment, since it happens before you have the opportunity to use the money for something else. We also use this same concept for tithing to our church.
5. We try to buy everything used. One of my favorite blogs, the Simple Economist, does a really great job of explaining the Irrational Gap in Price Between New and Used. The point of his post is that products have a dramatic and irrational drop in price as soon as they are purchased. For the savvy individuals, this provides a window of opportunity between the time when an objects’ price has been devalued but the useful life is still strong. My husband and I literally buy ALL of our clothes at Goodwill. Every piece of furniture in our house is either 2nd hand or was purchased off Craigslist. We even buy unusual things at places like Goodwill... unopened boxes of diapers, unopened jumbo boxes of Hefty trash bags, Christmas lights, etc all at significantly lower prices than from a Big Box store.
6. We get creative. For example, I recently took my daughter to a class at Gymboree Music and Play. She had such a great time interacting with the other babies! At the end of the class, I inquired how much it would cost us to join. I was shocked to learn that 4 classes a month would cost us $65 ( annual cost of $780). At that point I had three options, 1) pony up the money and take a class 2) save the money and not take a class 3) start my own class! Guess which option we are going with? I found a really talented high school senior who is going to college to major in theatre and arts. This summer she is going to lead a group of my friends and their babies in a music and play class that is very similar to the classes at Gymboree. Each mom is going to pay $3.00 to cover the high school students "salary". It's a win for her, and a big win for us!
7. Surround yourself with other frugal-minded friends. One of the most helpful things we've done is surround ourselves with thrifty friends. When your friends are conscience about how they spend their money, you will likely feel less pressure to spend as well. A fun Friday night for us involves grilling hamburgers, playing Settlers of Catan and great conversation (for a grand total of $10).
If you have any questions about how we've reduced our overhead expenses or as I like to call it, our "glamorous frugal lifestyle" (because I never feel like I am having to miss out on stuff because I am too poor)-- feel free to contact me!
