# Living on a penny?



## Cherry (Sep 23, 2009)

Not literally, but damn close. We got into a financial crunch about a year ago, and we are still trying to climb out. I do not want the cycle to continue because it is choking us. So no more loans, no more living on credit cards, only cash that we have. It may mean we are going to be living on 600 a month for 4 months. We both have fuel efficient cars... Probably 60 at the most in gas a week. Is this even possible to do???? We are finally getting on board with coupons... Is it time to start NOT paying some credit card debt? Where can we cut corners? We are current on everything to date except mortgage, which is part of the reason we will be very tight for the next 4 months.... We're spreading our late payment over 4 months. Any I know this isn't a financial forum with experts per say, but maybe someone who's faced this recently or in the past. My H and I both work decent paying jobs... And under normal circumstances it wouldn't be like this 
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## FourtyPlus (Dec 18, 2011)

We have been doing this for four years, 2008 being the worst year, financially. We eliminated all credit cards and other debt through bankruptcy and haven't signed up for any new credit cards since, nor do we ever plan on doing this again. We only spend what we have. Sometime last year we were able to open a savings account, starting with 50 bucks and adding all our collected change every 4 weeks or so. Eventually, we were able to add $100 from a paycheck, then some more, then an entire paycheck. We are at $5000 in savings now. It would be more but we splurged and bought a higher end washer/dryer that was needed.
We hardly eat out. We cook a lot and we try to make use of leftovers. Example: pot roast yesterday, shredded BBQ pork sandwiches today. When I do a roast chicken in the oven, I cook down the bones, add a can of veggies, a bag of noodles and it's Soup'n'Sandwich for dinner the next day. I don't do coupons a lot because there's never any of them for meat or fresh produce. I don't like tv dinners and frozen foods because they are just not as healthy as homemade from fresh ingredients. I buy produce that's in season because it's cheaper that way.
I buy all my clothing at thrift stores but I only go for the high end stuff. I like name brands and good quality but because my style is rather classic, it's easy for me to have and build onto a basic wardrobe I can wear for years. I pay no more than $1 for a pair of Levi's Jeans, $5 for Ann Taylor suits.
We don't have cable, we Netflix only. I watch a lot of stuff for free on Hulu.
Hubby drives an average fuel economy Ford Focus and I drive an old Geo Metro, getting 50 mpg. We bought the Geo because my job requires me to drive at least 5 hours on a daily basis. Hubby is mechanically talented and skilled, so we were able to fix up and maintain the Geo having to pay for parts only. I'd rather drive a BMW but I smile every time I top of the tank and see that I don't pay more than $40 a week in gas but still get a ton of milage. Payments on the Ford, GEO was paid for in cash. Once the Ford is paid off, we will not ever own a car that requires monthly payments.
I have learned alot from the recession or whatever you want to call it. I remembered a lot of talk from my grandparents, how they provided for their family with next to nothing. I figured if they could do it then we can do it too.


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## Cherry (Sep 23, 2009)

That's just it, I am trying to avoid bankruptcy, but we have the extra cash right now to file. I'm thinking constantly about whether we should. I wouldn't have a problem with that... My credit is so ****ed right now with the mortgage problem, it won't hurt me. My H on the other hand has spent 4 years repairing his credit. And that's a good thing. He only has 2 credit cards that are manageable. Everything else is in my name including one car that is joint. Can I file and it not effect my husband? I've never thought to Google that... Hmmm.
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## tennisstar (Dec 19, 2011)

I believe you can file separately.

Years ago, when I was single and a teacher, I had to file bankruptcy. Part of the problem was I just didn't earn enough as a teacher (teachers were paid very poorly here about 10 years ago), and the other part was I was dating a man who couldn't keep a job and being young and stupid, I paid for everything for us (dates, eating out, gas, etc.). It got to a point where I was going to spend many years digging myself out and my credit was still going to be shot. So after getting some legal advice, I filed. That was almost 8 years ago.

Today, I have 2 house mortgages (I live in 1 and rent the other one). I have 2 car loans. I have several credit cards, which I try to pay off each month. I have a good life. I believe I made the right decision, even though part of me feels guilty for not paying what I owed. 

Here are a few suggestions on saving money:

1) Cut cable.
2) Clean out clutter and have a garage sale/advertise on Craiglist or eBay.
3) Don't buy clothes or shoes unless they are absolutely needed.
4) Cut your cell phone package.
5) Don't have a home phone - only use cell phones.
6) Look for ways to cut your electricity and gas bills.
7) Don't go to stores unless you have to. When you go, only purchase what you need and don't "window shop." For years, I didn't even go to stores unless I needed something. That decreased my temptation to spend.
8) Cut magazines and membership fees, such as gym membership fees, etc.
9) Change your W-4 so you are getting the most from your paycheck.


There are so many more. You can do a google search and find tons of suggestions. 

Also, you might look into ways to get a part-time job and make some extra money. I had to do that years ago, too. It really helped.


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## CantePe (Oct 5, 2011)

Have you ever heard of the Dave Ramsey approach to debt reduction?

I have seen numerous people have massive success with this approach, he talks about the snow ball effect of paying off debt and working on a percentage of the income going into one debt at a time while the others are paid at their minimum payments a month.

Even a debt consolidation might help or a consumer proposal perhaps? (the latter is not a bankruptcy but rather something you do before turning to bankruptcy or in your case of being an american Chapter something or other?)

Here:

Dave Ramsey Homepage - daveramsey.com


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## Pandakiss (Oct 29, 2010)

for about 2 solid years we were living on a take home of right around 800 a month...not extra, but the total amount.

we waited to get cable, and if you haggle with the cable company, you can get a good deal...at least for a year. we were paying 51 or 61 after taxes for digital with hbo, stars, showtime, encore, and hd was free...

in our area, we were paying 30 dollars a month for internet, it was pay as you go, no hook-up fee, no fees for anything..if we didnt pay for it in jan, then that was ok. no bill for it.

we got a cheaper phone plan where it was still unlimited minutes, text, pics, and browser--i can pay for a slimmed down version also, and the phone company dosent care.

coupons are the best..just make a list before you go to the store, shop at walmart for things like cereal, juice, pop, shampoo, comditioner, hair product...its the same as cvs, but a whole lot cheaper.

we eat out maybe once a month...and its pizza, or chinesse food, cheesburgers from this great restraunt...we set a budget. rent first, then lights, then cable.

i your area does recycling get in on it..i wont get much for paper, but pop, soup cans..a little more. if you go to starbucks, bring your own cup..10 cents off---not a lot unless its the coffee of the day.

dont buy nail polish unless its in the clearence bin, buy from the racks in the back of the store...if its a zipper haggle with them..then take it to the dry cleaners..easy cheap fix.

only buy books from the cheap isle at barnes and noble. compare shop for tvs, ipods, dvd players. best buy and sears will price match..and you can pay the against one another.

check on line to see what model is the "good" one. i got a blu ray dvd player from walmart for 60 something..and it just so happens to be a better model.

buy video games from game stop...they will have used games sometimes for a pretty good discount...they dont price match..but its cheaper than toys r us, or sears.

only buy movies you REALLY want, and just wait about a year after they come out..SUPER cheap. we used to stay by a entimines or awreys, bread shop...they sell bread and other goodies a lot cheaper than the grocery stores.

just look for deals, and go from store to store, take pictures of prices and try and to see which store is having a fire sale, and what time of the year it is.

never over look the floor models...you can get 10% or maybe a little more..i just got a brother printer for 35 bucks...it was last one and a floor model.

check on line prices...but not all stores honor those, best buy dosent, but staples will..just have a pic of the price and item.


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## Lydia (Sep 4, 2011)

I would speak with a financial expert before doing anything drastic like filing bankruptcy.

Also I think I'd let the credit cards go, or just pay the bare minimums until you get your mortgage caught up. If I am thinking correctly, a default mortgage looks a lot worse than late credit card payments on your credit report and you also risk foreclosure on your home.

We have had to live on pennies before with one child and my husband working part time minimum wage. We had no cable, one cell phone between the two of us, and I shopped at grocery outlets/farmers markets for food. I had to let some of my debt get behind, but eventually things got better and I was able to catch up and pay down.


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## Cherry (Sep 23, 2009)

Thanks, we already do a lot of what is suggested... I am going to see what can be done about the credit card debt... Maybe a consolidation loan? I don't know seems like a double edged sword in that I'm replacing a large debt with another one, albeit smaller. We certainly don't want to fall into foreclosure, an apartment around here is as much if not more than our mortgage. The good thing about this is my kids are too young to notice our financial struggle, if we can get this ironed out in a year or so, we'll be okay.
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## OhGeesh (Jan 5, 2010)

Not going to write you a book it's just discipline in the end.

You can eat on $1/day per person it's been done many times. I did $2/day just to see and it was cool.

I'm weird and do stuff like that from time to time. All I can say is lots of hard work and sacrifice. My wife and I went from driving a beat up 1980 old station wagon living in a 800 sq/ft apt with 3 kids to living in a 3100sq/ft house, 3 cars, fully funded 401k, etc etc.

What a difference 12 years makes!! PM me for more info if you want.


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## Zzyzx (Aug 24, 2011)

Many resources on the internet for frugal living. Check them out. You will get more ideas than you know what to do with.

A couple of ways to go at credit card debt: can start with the smallest debts, get those paid. They will pay off quickly, that will help your credit report. other approach is to pay off highest interest rate first regardless of size. if you can get your interest expense down, you will have more funds to pay remaining bills.


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## SimplyAmorous (Nov 25, 2009)

Here is some of my advice I gave on another thread in here months ago:

We are admittably cheap- or the nicer term is "frugal". I used to own a book called the "Tightwad Gazette" Amazon.com: The Complete Tightwad Gazette (9780375752254): Amy Dacyczyn: Books Yeah, much of those things were a way of life for us, especially when he had his 1st job. I used cloth diapers on my 1st 3 kids & I hung them on the clothes line too! (in the country, no neighbors). We have always had a nice stash for emergencies. Never had a fight about $$. We refuse to pay interest on anything. 

How we live...

1. I don't buy my kids expensive cell phones or designer clothes
2. I have a tracfone (averages $7 a month if you buy cards on Ebay, only use mine for emegencies- my older phone has FREE incoming text so I keep it -no bells & whistles at all. 
3. I Use Google Voice for free long distance calling.
4. My kids use their ipods for Free texting 
5. I clip coupons & do Buy ONe Get ONE free deals
6. I only buy on sale
7. I use ebay for their games & many items 
8. Buy my books used online
9. I search anything & everything for competitive pricing from contacts to tires online, call stores
10. I go to Flea markers
11. I buy clothes at Consignment shops
12. I do rebates, 
13. We have a rule -only water when eating out
14. We try to do our own home projects
15. Paint & repair our own cars
16. we take the family to the $1 theater on the day is only 75 cents a movie, we skip the popcorn, (of coarse with friends I will let them pay $6 a movie- we just don't do that as a family-too costly). 
17. I cook mostly from scratch as boxed & prepared items cost too much
18. We have X amount come directly out of his paycheck every week in savings- helps you save if not slipping through your hands 
19. I use Big Crumbs.com to earn $$ on some stores online-it adds up !
20. We only buy older cars -have never gotten a car loan in our lives
21. I use CHASE credit cards , always pay in full, they give you perks to earn 2- 5% on every dollar spent , I generally make $300 a year free - just by using my CC on everything from food to gas to bills. (they do not like customers like me) The Best Cash Back Credit Cards, January 2012
22. If I see a killer credit card offer, like a free DISNEY Visa giving away $200 in free disney dallors after your 1st purchase -I jump on that - I did just this & when we went in Nov, we got $200 off our tickets -1 day at one of their parks for our family was over $600 ! 
23. I cut all my boy's hair with the buzzer , and my husbands. 
24. We put our extra money in CD's, better return than savings, although not much these days. 


I used to enjoy watching Suze Orman internationally acclaimed personal finance expert : The Suze Orman Show : Will & Trust Kit : FICO Kit : Insurance Kit : Women & Money 

Another great guy to listen to, I used to catch him on the radio: Real Debt Help - Get out of debt with Dave Ramsey's Total Money Makeover Plan - daveramsey.com

We are NOT rich by others standars of INCOME at all, I am a SAHM, My husband has a blue collar job making approx $50,000 a year... we have kids, we have a nice savings and we have been completely debt free (own house/garage/land & 3 vehicles) for a good 6 yrs now. 

It takes discipline and it is a lifestyle ....but it can be done.


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## couple (Nov 6, 2010)

Hondas and Toyotas - rarely need repairs, cheap to service, usually pretty fuel efficient, retain their value much better than most other brands. I would buy a lower mileage one about 4-5 years old and keep it about 5-7+ years (depends on how much mileage you do).

Everyone says cars are money pits and it's very true. However, most people fall into the traps.


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## FirstYearDown (Sep 15, 2011)

When you go out, only carry the cash that you need and not a penny more. Keeps you from buying what you don't have to have.

I buy all my clothes on sale or on Ebay. The store I shop at is cheap, yet fashionable.


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## tmh (Jan 17, 2012)

Start thinking more realistically. If you have that little per month, why do you have cable or internet? Why would you ever go out to eat. There is absolutely nothing wrong with using coupons. Spend more nights at home watching movies, playing cards, talking. My H and I had the worst years of our marriage because of financial woes when we started thinking smarter, but we became closer as people. It sucks not being able to go out to eat, go to the bar with friends, etc..., but we started getting over the stigmas of being the 'couple that doesn't do much' and it got better.

We cut out all credit card usage (as we were basically living on them), got a consolidation loan (which we're still paying on but not using credit cards after 3 years), used coupons, told our friends and kids no - a lot! - put on sweaters and turned down the heat in the winter, left the AC off in the summer, used the internet sparingly at work or library (free), cried a lot, laughed a lot, volunteered our time to replace TV, worked with the companies that we owed money to, and got on board with the idea that it's going to take a few years to get out of what we got into and keep on ticking. 

It's been a couple years now, and we're still paying on some of those things, but we recently (7 months now) moved into a smaller home and are able to pay off some of these problem debts. We have 1 more to go and we're back on the train. 

Mostly, stay positive, and know that if you do get into trouble, it doesn't take long for your credit to bounce back. It will take a lot longer after a bancrupty.


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## Cherry (Sep 23, 2009)

tmh said:


> Start thinking more realistically. If you have that little per month, why do you have cable or internet? Why would you ever go out to eat. There is absolutely nothing wrong with using coupons. Spend more nights at home watching movies, playing cards, talking. My H and I had the worst years of our marriage because of financial woes when we started thinking smarter, but we became closer as people. It sucks not being able to go out to eat, go to the bar with friends, etc..., but we started getting over the stigmas of being the 'couple that doesn't do much' and it got better.


Quite honestly, we do not have internet, we have a 60/month satellite bill, that's our home entertainment, that's it. We don't go out, the last time we went out to eat was because we got a gift card for Christmas, before that it had been many moons since our last date. We are literally living future paycheck to future paycheck. My H went from bringing home on average 800 a week to 600 a week in the last few weeks. Imagine an 800/month drop in income in one month? And the month before Christmas, I was hit with a garnishment to the tune of over $1000 for an unpaid medical bill (they deducted nearly $500 a paycheck for two paychecks).... There went my mortgage payment!!!! And then over Christmas, I had an unpaid shutdown for a week and a half, that was fun. It was about half of my regular pay, as I did have some paid time off left from 2011 to use.

In any event, I am only able to pay the minimum on credit cards as I'm not able to pay anymore than that, we buy almost everything generic, we go to several different stores to find the best deals on our necessities with coupons now. Our childcare alone is 1080/month. 

It was a series of unexpected large costs hitting us over the course of a few months. And because my credit is shot now, no debt consolidation company will help me. Our interest rates on our vehicles reflect our poor credit standing as well. 

The thought of walking away from debt sucks, but what else can we do??? And it's getting worse... Demand letter from mortgage company most recently. Ugh... This does not make an already rocky marriage any better, that is for sure.


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## SimplyAmorous (Nov 25, 2009)

Cherry said:


> And the month before Christmas, I was hit with a garnishment to the tune of over $1000 for an unpaid medical bill (they deducted nearly $500 a paycheck for two paychecks).... There went my mortgage payment


I feel for you in this, no matter how disciplined a husband & wife saves, if you have lacking Medical insurance & an emergency, it can eat up your entire savings overnight. I feared these things, anything else we could figure into a budget but this -it was impossible.

I seen it as too much of a risk .... This is why my husband didn't take a handful of jobs that paid better when he was looking. He had really excellent benefits with his lower paying job, precisely why he stayed there for 18 long yrs. Got a much better paying job now -also with a great family plan, so thankful for that.


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## Cherry (Sep 23, 2009)

SimplyAmorous said:


> I feel for you in this, no matter how disciplined a husband & wife saves, if you have lacking Medical insurance & an emergency, it can eat up your entire savings overnight. I feared these things, anything else we could figure into a budget but this -it was impossible.
> 
> I seen it as too much of a risk .... This is why my husband didn't take a handful of jobs that paid better when he was looking. He had really excellent benefits with his lower paying job, precisely why he stayed there for 18 long yrs.


That was with insurance, deductible is $3000  But as it stands now, if one of my babies got hurt and we had to go to the ER, there is absolutely no way to even pay the 250 co pay.


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## Cherry (Sep 23, 2009)

Okay - So as it stands now, anyone have any experience with Chapter 13 Bankruptcy? If what I'm reading about it is correct the allowed living expenses are 1388 for a family of 4 for a month. Our house and cars are also within the IRS allowance, so we'd get to keep those and continue paying the note by reaffirming the loans. Whatever is left over (disposable income) goes to pay your creditors within 3 to 5 years. By my calculations we'll have all of our unsecured debt paid within that 3 to 5 years... So that's a big plus and it alleviates the feeling that I'm "walking" away from debt... As a matter of fact, the consumer credit cards I have will be paid quicker under a bankruptcy plan. From what I can gather the pitfalls of a bankruptcy are:

Credit ruined for 10 years (mine already is with the late mortgage payments, not to mention I'm headed for foreclosure if I don't do this)

Unable to obtain credit cards (well duh, that's part of what got me in this mess to begin with)

Living on a budget the IRS tells us we have (well our way wasn't working... So we'll take that chance, besides it's looking like their budget will be double what ours was able to be)

Am I missing anything that can be a huge pitfall to this? Because those three problems are actually okay given our current situation.


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## FourtyPlus (Dec 18, 2011)

We discharged ALL our debt in our bankruptcy and I started receiving credit card offers a week after the bankruptcy was final. Not that I ever want a credit card again!

Your credit must not be "ruined" for 10 years but you have to work to build it up again.


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## Cherry (Sep 23, 2009)

Thanks! I did file on Feb 1. And already I am feeling the relief personally and in our home  We get to keep everything and one of the biggest bonuses I've seen is that our interest rate on our car loans were wiped out completely.... So over the next 5 years, we are paying bluebook on the cars!!! 

But yeah, I'm done with credit cards, the mess I got into was just awful and I don't want to go through that ever again


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## romantic_guy (Nov 8, 2011)

When I lost my job in 1990 we moved to another state and I took any job I could find (I ended up going back to college...but that is another story). We went through Consumer Credit Counseling, a non-profit agency. They contacted the creditors and arranged payments that we could afford. Some even forgave the interest. My feeling is to avoid bankruptcy. Our credit remained good and it was only a few years before it became excellent.


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## couple (Nov 6, 2010)

2 things:

1. Configure your life for low costs relative to your salary (fixed cost control). This means lower cost house than you can afford, inexpensive cars that are reliable and cheap to maintain and efficient, etc. Minimise fixed monthly bills for cable, phones, etc. Never finance anything except for house and cars (and avoid car payments if possible). If you get this wrong and have too high fixed costs, discipline and scrimping with coupons, etc will make very little difference.

2. Discipline with every day spending (variable cost control). Most people will agree with discipline but the problem is that there is always a reason to break it - kid's birthday, anniversary, xmas, etc. Just about every month something will come along that's an excuse to break your discipline. This is also about minimizing expensive habits like coffeeshops, bars, smoking, driving all over the place when unnecessary, etc.

Fortunately we have never had a real a financial mess but have managed to live very cheaply even when earning very well. But you still need to live your life so as a family, it's helpful to agree on priorities where you will live over the basic needs (and make appropriate trade-offs in other areas). For example, is travel or private schools a priority? Golf every weekend?


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