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This is the second part in a series detailing our financial turnaround. Over the next few weeks, I will be detailing how we survived broke, the moment of realization when we knew things had to change, and how we stepped back from the brink.

$13,000 take-home is only $1,100 a month. Not a whole lot for four people. We did a lot of things to stretch this income to the max.

We lived in a cheap place. We rented a 1.5 bedroom apartment for $500 a month. This was a very good deal on rent in the city we were living in at the time, as housing was very expensive. Studio apartments went for more than this. The .5 bedroom was actually an oversized landing that was meant to be an office of sorts. We made that our bedroom and the boys shared the one regular-sized room.

We were near money-saving services. We right next to my work, a park, a library, several grocery stores, mountains and hiking trails, and the highway. We never had to travel far to anywhere, and many of the things around us helped us save money.

We kept a strict budget. What really made this budget work was that it evolved. I rewrote it every month. I kept track of every cent we spent each month, and adjusted the budget accordingly the next month. If the food budget was only $16 one week, then we couldn’t spend $16.01. We didn’t have it.

We rarely ate out. Nearly everything we ate was made from scratch. We ate lots of veggies, because they were cheap. We didn’t purchase cereal or other convenience foods. (Yes, we considered cereal a convenience food!) I baked at least once a week, and cooked every night.

We line dried out clothing. We had to pay 50 cents a load to wash, and 1.00 to dry. I never used the dryer. When a month was particularly tight, I even handwashed the clothes to save the 50 cents. I had lines stretched across our bedrooms, and would hang the clothes inside.

We scheduled time for fun. We visited relatives that lived in town regularly. We went to the park nearly every day. Every few weeks, I would cook something special and we’d go on a picnic in the mountains. We played cards and board games, made lots of crafts, took advantage of free events, and were constantly on the lookout for free, fun things to do as a family.

We earned extra money when we could. We were always on the lookout for other sources of income. For awhile, we embroidered jerseys. Until the sewing machine broke and we couldn’t afford another one. I wrote and sold articles here and there. Every year, I made a several homemade Halloween costumes for a fee. We collected cans at the park and recycled them for pennies. Whenever we saw a way to make a few ethical dollars, we jumped on it.

We didn’t have heat. We were lucky in that we were sandwiched between a couple other apartments so we benefited from their radiant heat, and that we lived somewhere that didn’t get too cold in winter. The temperature inside never dropped below 60 F. Even where we live now, with cold winters and hot summers, we keep the heat at 65 F in winter and 80 F in summer.

We never turned down free items. My husband’s grandmother often gave us food stuff when we visited. Even if it was items I knew no one in my family liked, I took them and found ways to use them. A grocery store near us gave out cards for a ‘cookie club.’ Children with these cards got one free cookie each visit. There was nothing more endearing than a four-year-old boy clutching his card excitedly, while behaving, during a grocery shopping trip. He is nearly ten now, and he still occasionally waxes poetic about the joys of the cookie club long ago.

I recently found a budget from one of those months when flipping through a notebook. This budget didn’t change much until two years ago. It follows:

Rent-$500

Electricity- $70

Groceries- $100

Gas- $20

Insurance- $125

Phone- $25

Household supplies-$10

Laundry- $4

Pet supplies- $20

Savings- $50

Misc.- $100

We did a lot of things right, as you can see. But we also did a lot wrong. Next time I am going to illustrate some of the biggest mistakes we made, and what we should have done instead.

This is the first part in a series detailing our financial turnaround. Over the next few weeks, I will be detailing how we survived broke, the moment of realization when we knew things had to change, and how we stepped back from the brink.
Five years ago my financial life was chaos. I had a 4 year old son, an infant, my husband was a full-time student and I was working full time at a payday loan place making only $8 an hour. We were broke. It was so bad after the birth of my second son, that I forged a doctor’s release to go back to work just shy of four weeks after his birth, because I had no paid leave.
The funny thing is, we racked up zero new debts during this period, except for a small student loan for my husband. It was hard. Those are by far the hardest years of my life. There were weeks when I didn’t know what we were going to eat. They are also some of our happiest years. My husband and I learned we were a team, and that we didn’t need money or even stability to be happy together. My eldest son remembers lots of long days at the park, a ‘one-day vacation’ we took, and time spent in the kitchen cooking with me. My youngest remembers very little, but that time period enabled us all to bond with the new baby without the distractions of constant consumerism.
While we didn’t incur new debts, one of the things holding us back was old debts. $20,000 worth of old debts between the two of us. These were so old there was no longer any minimum monthly payments, oh no no. It was pay us now notices overflowing the mailbox each day. There were credit card accounts from my college days, closed out now and demanding payment. Medical bills, car collections on a vehicle that was totaled without insurance, and old student loan debts. There were sundry bills large and small, all in collections, all waiting in the mailbox each day.
We ignored them, we had no choice at this point. We didn’t make enough to scratch by on the day to day living, let alone enough to pay for past mistakes. This was just how our lives were so we stuck our heads in the sand and lived well below the poverty line for a long time.
I know what it’s like to be poor. I know the feeling when bellies are grumbling and there is no food. I know the fear of homelessness lurking around every corner. I know how unstable life is when a small emergency can send the entire house of cards tumbling down. Thinking back on some of those days right now, in my sunny office in my own house, with money in the bank right now, is still causing my stomach to lurch and my heart to beat a bit faster.
But we survived those days. They made us stronger, closer, and smarter. And looking back, there was a lot of laughter, hugs and happiness. The things that really mattered. Over the course of the next couple of weeks, I am going to share our story. How we survived on only $16,000 a year. What the defining moment was, when we realized we couldn’t live in fear of debt and poverty any longer. How we rebuilt our lives and found the modest success we have today. Maybe you have also been there, maybe you are there now. Hopefully, some of what we did and learned can help you start your own financial turnaround.

I’ve spent the last month thinking and meditating on this blog. Why do I have it? What do I wish to accomplish? How can I work it into my already busy days? And that is just the first few questions that arose!

On June 1st, I’m going to relaunch Turnip Money. Things I am currently working on:

A new site design: There is a lot I want to add to Turnip Money, that the current design doesn’t support. I hope to make it simpler and more useful to you, the reader.

A sustainable posting schedule: I never again want to leave everyone hanging when my life becomes too busy to keep up with TM, so I am implementing a regular posting schedule, as well as building up a backlog of post. This means that even when lie prevents me from posting regularly, you’ll still have some great new content to look forward to.

Sharpen the focus of the site: I honestly believe that we can all achieve our financial goals, regardless of our income or lack thereof. I plan to really sharpen the focus onto fun yet useful personal finance skills as well as daily things you can do to save or make money.

Free tools: More goodies for you, the reader! I have some tools and ebooks I’ve been working on that hopefully will help provide the framework for others to regain control of their life.

Back-end maintenance: Sigh. This is vital. I am sure it hasn’t gone unnoticed that TM was attacked by the comment spammers. I’m still cleaning up this mess. I know where I went wrong, and soon it should be a thing of the past. I am working on implementing filters that will post the least amount of hassle to the real readers and commenters on the blog.

There’s more, much more! Come back in June to find out all the new happenings!