One thing that I haven't shared about very much is the fact that the Full Man Grown has been laid off of work for a long time. Like over a year and a half. He is a carpenter and with the current economy, no one is building much of anything. Businesses are waiting to see how things pan out and banks aren't loaning much money. What does that say for the carpenters out there? Trouble.
Full Man Grown had been working for a company for several years and making great money. We don't have any credit cards and live within our means, but we were living near the top end of our means. Even though we didn't have brand-new vehicles or the latest electronic devices, we did spend a lot of money eating out or going to events like concerts, plays, etc. Then his company started laying off people. At first it was just a few, then more and more. They went from over 300 carpenters (it was a huge company) to 45 in less than six months. Let me tell you, every Friday that he came home and hadn't been told not to come back, we breathed a huge sigh of relief. Then his day came. He was laid off one Friday and only two weeks later the company closed their doors. Ouch.
We were scared of what was going to happen to our family. Since I stay home and do daycare part-time, my income was hardly enough to support our family. Full Man Grown's unemployment was decent, but not what we were used to and not guaranteed for a long period of time. He was able to find various things to supplement, but it was hard. Somehow, we made it. At times, it was really hard and we were playing the "If I pay this now, this other one can wait up to a week before they charge us a late fee" game more often than I liked. But somehow, we always had enough. Things would look really dire, and we'd get a reimbursement check from our insurance company or someone else for an overpayment. I knew without a doubt that God was watching over and providing for us.
Thankfully, FMG is back to work again with a new company. But you know what? We haven't gone back to our old habits. I still act as though we're on the brink of our finances and buy only what we need, with just a small number of wants sprinkled in. We pay our bills and put everything else into savings or apply them as an extra payment on other bills. Never again will we put ourselves into the position we were in with his lay-off. Here are some of the things we do:
1) We don't have a credit card. Unfortunately, we are still paying off an old credit card from when we were first married, FMG was working a low-pay job, I was finishing college and we had a newborn baby. We had to rely on it more than we wanted but after I finished school and FMG became a journeyman carpenter, we closed the account. It's almost paid off now, and we can't wait for that money to be freed up!
2) We spoke with our accountant to figure out what we should claim on FMG's taxes with his job. If you file 0 dependents, the maximum amount of taxes will be taken out of your check each week. The more you claim, the smaller your deducted taxes and more you'll take home with each check. For our family and situation, she suggested a certain number to claim that
should get us more in each paycheck but result in a small (think $1000 or so) refund each spring. We decided that we wanted to get a bit larger refund but still not have it be outrageous, so we claimed just less than what she recommended.
3) We follow some of Dave Ramsey's basic rules and suggestions for cutting down on our debt and obligations. The main one we use is paying the minimum payments on each bill, but applying as much extra as possible to the lowest total bill. In our case, it was my student loan, which we paid off recently--before FMG was back to work full time. Now we're applying what we were paying on that account each month to finish off that pesky credit card from several years ago. When we're done with that, we will be debt free except for our mortgage, which we'll work on paying off in the same fashion.
4) We have a savings account that we automatically contribute to with each paycheck. FMG gets paid on Wednesdays, so I have it set up to transfer money each Thursday to our savings. Since it's automatic and right after each paycheck, I don't really notice the difference or that it's missing. But if I need it, I can transfer back to the checking in a pinch.
5) We run all major--think over $50--purchases past each other before we make them, unless it's something like groceries and gas. If it's a part for the vehicle, a new pair of shoes for each kid, or a replacement vacuum cleaner, it's ran past the other so we are both aware of where our money is going and when. Plus, if you have to hash it out, sometimes you realize it's something you don't necessarily need, thus keeping spontaneous purchases to a minimum.
6) Anything above and beyond our normal weekly income is either put into savings, used for fun activities, or ear-marked and saved for a bigger purchase. Last week I watched two of my daycare kids an extra day than normal. That money went to eating out on Friday night because I just didn't feel like cooking. FMG sometimes will get a small side-job here or there, and that money will go to savings. One thing we're saving up for? A new vent hood for my stove since the 30 year old one we have now is on it's last leg. (I cannot wait, as it's the only appliance we haven't replaced in the kitchen but it's coming up very soon!)
7) We do not have car loans. Now, in reading that, you may think that we drive old clunkers. That's somewhat true, but not completely. FMG commutes 1.5 hours to work each day and drives an old Honda Accord that gets 30+ mpg. We paid cash for it after saving up the money. We also own a Dodge Durango that is 12 years old. We bought it when we were first married and it was a wonderful vehicle to us, giving us plenty of room for our growing family. The loan has been long paid off but we continue to drive it when we need to. It's no longer in the best shape and isn't our family vehicle anymore, but it still works for various needs or as an extra vehicle that will fit everyone in a pinch. Our other vehicle is a newer Dodge truck with 4 doors and lots of bells and whistles. This is our family vehicle and we paid for most of it with cash and the rest with a loan from a good family friend who owns his own business. FMG has worked off the loan (which was about $5000) in just under a year.
8) I talked to our utilities and asked about discounts or ways to save on our bill. We have satellite tv and receive lots of mailings from another company that advertised for lower prices. I called our current company and told them I was thinking of switching and asked what they could do to keep me. Their response? They took $20 off each bill for the next 12 months with no contract obligation and no other changes to our service. When the year is up in a few months, I'll revisit my options. We bundled our phone services and internet to save over $30 a month.
Now I know we aren't perfect and still have a long way to go when it comes to managing our finances. But right now, things are going well and we're working towards our goals in a consistent, steady manner. Hopefully some of this has inspired one of you to work on your finances and realize that while it does take some sacrifice and discipline, it's not impossible to get on top of your money while still having fun and living life, as well.
