Financial Turnaround-Living on Nothing (part 2)

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.