YNAB BLOG

The Most Expensive Part of this Budget Isn’t the Easiest to See

magnifying glassWith two young children at home, Debbie was feeling stressed and depressed about her long work weeks. So she made the happiness-increasing choice to cut back to part-time work and has loved the extra time with the kids.

Unfortunately, she and Ed are feeling the effects of the lost income. Although they’re budgeting diligently, high student loan payments and expensive car repairs have left them a short on cash. Debbie reached out to ask the community how she and Ed can get ahead in spite of the reduced income.

Debbie works part time earning $1,960 per month take-home. She’s paid bi-weekly, which means two months with an extra paycheck. Ed brings home $3,647 per month after withholding for 401k contributions (5%), taxes, and health insurance premiums.

Ed’s an up-and-comer at his job, and they hope to see a 35% increase in his income in the next five years.

To the budget:

Pre-YNAB Debt Avg. Outflows Notes
Ed Chase $124.05 Leftover from our credit card days; we have paid off over $10,000 in CC debt in the last few years; this card is 0% APR for the next 12 months. Remaining balance is $1,072.
Debbie BOA $0.00
Student Loans Both have graduate degrees. Total outstanding balance of $100,710 at around 6%.
Ed AES $118.00
Debbie AES $257.88
Ed SM $175.00
Debbie SM $212.76
Monthly Bills
Mortgage $1,289.35 Includes home owners insurance and property taxes. Property taxes are $435 per month.
Utilities $538.35 Includes gas heat, electricity, water, sewage, internet, cable, and cell phone; internet and cable = $100/mo. and cell phone = $156/mo. (2 smartphones)
Childcare $354.80 Debbie works ten months of the year.
College Funds $12.50 They were contributing monthly to a 529 plan, have since stopped those payments to prioritize other saving
Everyday Expenses
Groceries $841.39 We joined a CSA this summer (meat and produce); although eating healthy and local is important to us, we found this was just too expensive for us, adding about $180/mo. For June-Oct.
Fuel & Parking $221.53 Two cars- they both commute. Debbie is in transit about two hours per day, Ed about 1 hr, 15 minutes per day.
Spending Money $33.64
Restaurants $61.54
Health $97.45 Rx, Co-pays, etc. Health Insurance is through Ed’s employer. Premium is taken out of his paycheck.
Clothing $145.69
Household Goods $110.25 Paper goods, cleaning products, diapers. Etc.
Lunches $36.06 My husband and I budget one lunch out per week
Entertainment $54.61 Netflix and family outings
Personal Care $43.66 Haircuts and occasional drycleaning
Miscellaneous $56.80
Kids $54.93 Kids outings, school lunch money for my daughter to buy lunch about once/2 weeks
Rainy Day Funds
Emergency Fund $0.00
Car Repairs & Maintenance $424.68 We have two 10 year-old cars- a Toyota Matrix and a Toyota Corolla (paid off :) ). Average outflows are high due to a recent costly repair to one of the cars. They typically budget $50/mo to the category.
Home Maintenance $43.41 I told them this category makes me nervous. They’re in a 74 year-old home with a 15 year-old roof.
Car Insurance $66.00 We save money by paying our car insurance premium once annually – $790
Birthdays $24.23 My daughters’ birthday parties and gifts, and my husband and my shared annual birthday dinner out (our birthdays are 3 days apart)
Christmas $50.00 Just started this fund in July after reading a YNAB post by Jesse about it!
Trips $3.40 Driving trips across the state to visit my family (gas, tolls)
June-August $0.00 To cover Debbie’s two months off of work in the summer
Kids Activities $110.75 Swim lessons, basketball, acting class.
Vacation $118.51
Giving
Gifts $87.14
Donations $14.50
Savings Goals
Car Replacement $0.00 Category balance is $0.
Home Remodel $0.00 Category balance is $0.
Buffer $0.00 Buffer balance is $1,100 and they have a $1,000 emergency fund.
Kids Savings Accounts $0.00 Because this money goes through our account when the kids receive monetary gifts for birthdays, etc.
Budget Total $5,782.84

First things first, I’ll congratulate Ed and Debbie for keeping things pretty well managed, even with a $763 per month student loan anchor around their neck.

Next, let’s do the normal quick scan looking for low-hanging fruit* in the budget:

I would take the $1,100 buffer and pay off the last credit card immediately. You still have your $1,000 emergency fund in place, and we need that $124 elsewhere in the budget today.

Cable TV and expensive smart phone plans. I have a deep loathing for both, so I can’t comment impartially on these categories. All I can ask is that you do the math on a) the cost of removing yourself from these contracts, and b) the amount of interest and time you’d save on the student loan debt if you added an extra $100 or so to your payments.

Groceries. You mentioned how participation in the local CSA added about $190 to your bill over the four months used in these average outflows. I’d put that $190 to work elsewhere in your budget.

Clothing. Maybe we caught you in an unusually costly four-month period for clothing purchases. If not, I’d say there’s an easy $50 to $75 to be saved here.

*By low-hanging fruit, I mean “easy to say, maybe not as easy to do.” Ed and Debbie have to figure out where and how they want to cut back, if at all. These are the categories where I’d start looking. 

Potential savings: maybe $400 to $450 per month.

Vulnerabilities in the Budget

The cars. I love that they drive two 10 year-old paid-for Toyotas. Problem is they’re high mileage, and they take a beating in the daily slow-speed commute. There’s risk of more expensive repairs, and my real concern is one (or both) of the cars will just flat out die and they’ll have to finance the replacement.

The house. 74 years old with a 15 year-old roof. It just makes me nervous to see no balance in ‘Home Maintenance’ and very little money flowing into the category. I don’t want the credit cards to be back in play when the home needs this or that and there’s no rainy day money available.

If it were me, I’d take the $400 or so per month in low-hanging fruit and build up a one-month buffer/emergency fund. That would allow them to live on last month’s income and have a little more peace of mind while they attack the debt.

But, even with the one-month buffer in place, I’d still feel like the cars, the commutes, and the house put Ed and Debbie at high risk of new debt. Which is why I gave them some pretty extreme advice.

My Crazy Plan for Reducing Risk and Getting Ahead Faster

Here’s my wild-eyed, hair on fire plan for how Ed and Debbie can remove a lot of their risk, lower their expenses, and speed up their debt elimination:

Sell the house and move to a rental within biking distance of Ed’s job. Debbie finds work within biking distance of the new home (because they feel like Ed’s job has more long-term upside). 

Now, hear me out. Yes, it’s a drastic move. But check it out:

  • The risk of the old house and the old roof go away.
  • The reliance on the old, risky cars goes way down, along with fuel and maintenance costs.
  • Debbie gets back most of the 400+ hours per year she’s spending in transit to her current part-time job. 400 hours per year!
  • Ed gets back most of the 350+ hours (!) per year he’s spending in transit.

Okay, I acknowledge that I’m a little over the top with my anti-commuting attitude, but you have to do the math. Debbie’s effective take-home hourly wage goes from $24.50 to just over $16 when you add in the cost of the drive. That doesn’t even account for the physical/mental/emotional costs of two hours of daily stop-and-go traffic.

I’m not even saying they have to bike commute (although they’d love it). Choosing to live within biking distance is simply the decision to avoid a long commute in the car. Ed works in the suburbs, Debbie tells me, so it’s not like they’re having to move into a dangerous place to make this all work.

Alright, I’m getting long-winded (as usual). Ed, Debbie: think it over. I believe the direct dollar savings of the move would be thousands per year in avoided maintenance on the home and cars. The indirect benefits of not having to commute and spending a lot more time together will blow your mind.

51 Responses to “The Most Expensive Part of this Budget Isn’t the Easiest to See”

  1. Sean Bossinger

    While it’s frittering away at the edges, one way that my wife and I have cut the smartphone costs without getting rid of the smartphones themselves, is to switch to a plan like StraightTalk. $45 per month, with unlimited talk, text, and data (up to 2.5GB of data, which is usually plenty), works wonders.

    Also, getting rid of the TV portion of the cable bill, and keeping just the internet portion might help.

  2. MYDWY

    I would ordinarily say the sell/rent plan is out-there mad, but to kill the commute, it just might be worth it.

    That said, though, I see a few weaknesses in that plan. It’s based on, among other things, an assumption that a 75-year-old home is too much of a risk to bear. To the contrary–such homes are not all in the same shape. That era made some fabulous, well-built homes. If they’ve been updated, they can be better than homes made in the 70s and 80s.

    Also, another faulty assumption is that the 15-year-old roof is a risk. A 15-year old roof is not necessarily old. If it was torn off and the first layer of shingles is 15-years old, then the next repair job will only need to be a reshingling; not a huge job or expense.

    Final concern on selling and renting–there is no equity to be had or appreciation in renting. Rental rates are still going up–and will continue to go up. Playing the long game and temporary savings by renting vs. buying are often, if not always, wiped out. Stay in the house long enough, and this family will be paying a fraction of what they would spend in rent 15-20 years from now.

    Ultimately, the commute and the student loans are concerning enough to merit consideration of a sell/rent plan–if for nothing more than peace of mind and increased family and productivity time. That kind of time and expense sunk into working is like paying to work with time and money. Not a great investment, IMO.

    Best of luck to these two–they appear to be pretty careful budgeters. Kill that student debt ASAP and start sinking the money into retirement and investments.

    • LeiraHoward

      I agree. We live in an over 100 year old house, and while some things need to be taken care of, the structure of the house is made VERY strongly. It is made of old-growth hardwood, and they used larger and thicker beams than are used today. And as the above poster mentioned, a roof isn’t necessarily a huge cost, though they should start saving for it if their home has shingles that will need to be replaced.

      The commute times are more the issue here. I wouldn’t necessarily look into a sell-and-rent situation, but if it is possible to sell and buy another home closer (and possibly smaller to save more funds), that would be something they should look into, unless they feel they will be changing jobs within a few years. If that is the case, renting makes more sense.

  3. B-Ster

    “Ed works in the suburbs, Debbie tells me, so it’s not like they’re having to move into a dangerous place to make this all work.”

    DO IT!!!! I’ve been really wanting to move closer to work. My one big hang up over this is that we both work in town in a less safe area. Schools and neighborhoods wouldn’t be an issue if I didn’t have 3 school aged children. I know moving isn’t an easy thing to do, ever, and selling your house is not fun either. But the benefits will be amazing!

  4. T

    If I wanted to read Mr. Money Mustache I would. Too bad ynab bloggers can’t be different.

    • Rachel Ruhlen

      Maybe there’s a reason they give the same advice. If you want something different go listen to Dave Ramsey. And see where that gets you.

    • Dirz

      Fortunately mark is much more approachable than MMM- good advice without the arrogance.

      • gpamerrittKenneth

        I agree. MMM gives face punchings Mark does not. I need the face punchings to keep me reasonably on track with my goals. It’s just so easy to backslide on dieting with that one Cinnabon, or on budgeting with that shiny new smart phone, tablet or pair of shoes. It’s like Weight Watchers, that’s why I read YNAB and MMM!

    • MendedSlinky

      They both give advice they believe in. If you don’t like it don’t read it.

      • Debbie

        For us, the extreme suggestions, even if we decide not to fully adopt them, certainly prompt us to take a closer look at some of our assumptions about what is “necessary” spending and inspire us to get more creative about ways we can cut expenses. For example, I don’t think we’ll sell our house (we like our neighborhood too much), but Mark’s feedback pushed me to consider using public transportation (free through work and near our house) and Ed to explore the possibility of a split commute (driving part way and biking part way).

      • Andreas

        Sounds like an acceptable compromise (if you can live with some light face-punching). Plus, public transport makes it possible to make use (some of) the time in transit. Use it to read, listen to audiobooks, learn stuff which make you smarter, happier, earn more. Also, Ed might want to ask around at work for car-pooling opportunities (cutting commuting cost in half).

  5. Andy

    Thanks! These kind of reviews are really useful, as we can compare how others are managing categories (got a few new ideas for my budget..).

    Just one question: I’m in a similar situation with a small amount still due on an old loan (2.100€). I pay 160€/mo. and the interests (since are the last remaining payments) now it’s really low, about 5/6€ on each payment. Do you suggest to fund this first? Actually I’m concentrating on building a buffer (around 1100€ as today) and I’m wondering if it’s better to look at the loan first for the next 2-3 months and close it. It’s my only debt category at the moment.

    thanks
    Andy

    • Purfectoptions47

      My experience is that finally being debt-free (and committing to staying that way) is an amazing feeling and it made a subtle, but powerful shift in how I see my ‘self-worth’ on a deep level. Its also brought in more unexpected abundance and opportunities to really start saving toward my future dreams! I wouldn’t pay off all debt at the cost of putting myself in extreme deprivation, but if you’re close to being financially solvent, I say: Go for it!

      • Andy

        Thanks, even if I was a little offtopic!
        I read about “close right now the CC debt” and I thought it was relevant.

        I’m really close, so I think I will go that way, being debt free will be as you say a very powerful shift.

        Thanks!

  6. tmb2

    If breaking the cell phone contract isn’t viable yet (often $200 per line), what are their plans? $156 per month sounds like a major carrier with a high data plan and phone insurance. This can be easily reduced by $20-$30 without disrupting the contract. Is that property tax amount correct? That sounds like something they should be paying each year, not each month.

    My two main concerns are the $900 they’re spending on food which probably should be half that and looking long term that their student loans almost constitute another mortgage. Dealing with that and having nothing saved for a car or home maintenance (no balance was shown) means they may get a one-two punch in the near future.

    • Khana Santamaria

      That’s only a little bit less than what I’m paying monthly for property tax. Caught us off guard – we expected it to be hundreds of dollars a year, not thousands. Sometimes makes me feel like I’m still renting, just renting from the government, plus oodles extra to the bank just ’cause.

    • Megan K

      I agree that food is an area to look at for possible spending reduction. However, I want to add a not that the costs of living vary widely across our country. In my area, property taxes are half that they are spending. So while there’s seem quite high to me, it seems no where near close to enough to cover a year of taxes. If $500 covers a year of property tax in your area, you must be living in a low cost-of-living area.

      I know cost-of-living isn’t directly proportional…. However, for the sake of discussion… My property tax is about half theirs. So, applying this to the grocery budget, and doubling my grocery budget, they should be able to feed a family of 4 in their area for $600-700 per month.

      • Debbie

        I think this is spot-on. Our property taxes are slightly above those of surrounding areas here, but it’s partly due to the fact that we’re in an excellent school district. And, since we’re forgoing the CSA we joined this summer (too expensive), we expect our grocery costs to come down to around $600/mo.

  7. Nick

    I’m very new to the YNAB Community but I hear a lot of suggestions in the forums and on the blog and on the podcasts about moving to cut the commute, which I think is a great idea if possible. On the other hand, it doesn’t work for everybody. For example, my wife and I live in a nice town that is rather expensive, but we have a small condo with a very easy mortgage payment ($518 per month). The area has a phenomenal school system and low property taxes. She is less than 2 miles from her job, but my commute is 28 miles each way, which translates to about 35 – 65 minutes depending on traffic. Now, a great suggestion would be “Move closer to my job since once the baby comes, my wife will stop working altogehter or go to one or two days a week at most” However, my job happens to be in an industrial park in the middle of a fairly high crime area, with extremely high property taxes, and very poor school systems. Not the kind of place we want to start a family. This area has a good 10 mile radius and the school system/property tax lines extend further. So, while it would be a dream come true, the “Just move close to your job” argument isn’t always going to work for everybody.

    • MYDWY

      I tend to agree that this argument is bantied about as a great idea, but it’s truly only viable for a very small percent of people. I’d be interested to see the math breakdown of rent vs. home ownership and see who comes out ahead at retirement age.

      • Alex

        The one thing the calculator is not taking into account is the savings that they could make renting living closer to work and trying to knock the debt out as quickly as possible.

        If renting for a few of years means that they can do this they could come out way better financially.

      • MYDWY

        Agreed, but the calculator is only useful for a renting/buying comparison. This still holds if they could /buy/ a place closer to work.

  8. Heather

    I always wonder how people keep down their food expenses. The kind of food we buy..mostly fresh veggies & fruit, meat (that we prepare at home) doesn’t have coupons.
    We shop the grocery store sales, buy generic where we can (i.e. pasta) , stay away from chips & processed foods, soda…still our grocery bill adds up. I guess I don’t think their food expense is so bad…especially if they keep their eating-out expenses down.

    • Wojo

      The only strategy that’s been successful for us is an almost exclusive reliance on Sam’s Club and our freezer. Plus, we separated any parties/family get-togethers into a separate party category that we roll over month to month because it kept killing our grocery budget.

      • Wojo

        To give you an idea of where we stand today, family of 4 (2 small kids), $375 per month on groceries and $75 per month for party food. And currently a full pantry and freezer, which will hopefully stay nice and cold.

    • Manda

      I don’t know where you live but have you tried a food coop like bountiful baskets? Much cheaper than grocery stores or even a CSA. I pay $15 a week for a full share of fruits and veggies (week by week so I can skip if that week needs). It saves us a TON on groceries. :)

  9. Nick

    Almost Always, but there are circumstances where it doesn’t work out that way. One example is someone who is deeply in debt may benefit from renting over buying simply for the fact that they need’t worry about home maintenance costs. For example, a family deeply in debt may be getting alittle bit of tax benefit and building some equity in buying, but if they are living paycheck to paycheck, and an $8,000 HVAC system breaks down and needs replaced… There goes $8,000 of any benefit you may have had that you might not be able to pay out of pocket right away!

    In my case, I bought my condo for $92,500 right before the housing market crashed. Today, after paying ofr it for the last 5 years, it’s estiamted value has only risen back up to about $85,000, and even at that price, the units in my complex haven’t been selling very well. We still owe about that much, so if we tried to sell today, we would pay to get out of it, plus realtor fees, plus the upgrades we have put into it, plus the closing costs, etc we already put into it. If we are lucky, we may get back up to a point where we can at least break even, but it’s doubful. Our mortgage is small, but our HOA dues have almost zero ROI for the last 5 years.

  10. Sara R

    I agree with extreme. I would also add to stop contributing to 401K until you get your debt paid off. Pay it off as fast as you can. Also donations and vacations should go until you pay off debt. Consider cutting back on Christmas gifts as well. We tend to get too comfortable unless we are attacking debt with that kind of intensity. You don’t have money to give until you pay off your lenders. You are a “slave to the lender” until you pay it off. Sure, your friends and relatives might think you’ve gone crazy, but ‘in-debt” is “normal” so who wants to be normal? (I credit Dave Ramsey for this attitude, somewhat paraphrasing)

    • MYDWY

      Stopping all savings / investing while cutting down debt is not always the best course of action. 401(k) contributions that are matched by your employer have an immediate 100% ROI. You’d be nuts not to take that.

      Make the minimum contribution to get your employer’s full match and then go ahead and pay down debt. But leaving free money on the table is /never/ a good idea.

  11. Saskia

    The extreme solution of moving to reduce car/fuel costs makes sense because of the equally extreme amount of student loan debt. But I also see a HUGE potential savings in the groceries line item. For me, working part time means I can plan weekly menus to keep costs down. Our family of four, including a teen and an 11 year old, spends approx. $500/month on groceries. Before I planned menus it was $700-900. It’s hard to overemphasize how critical menu planning is. (Check out the Budget Bytes blog for a great resource for low-cost meals that are still mostly based on meat.)

  12. tmb2

    The property taxes on my previous home were $1500 a year in an upper middle class neighborhood which is where my perspective came from. Back then I wasn’t paying attention to my grocery bill, but right now my family of 3 eats very well on $430 a month which may be a little low since its an Army commissary. If we got everything at the local Safeway it would probably be closer to $500.

  13. Ali

    We just recently moved across the state when I got a new job. I was working two jobs driving at least 600 miles a WEEK, not seeing my daughter or husband two days a week (yay traffic!)and was spending almost as much on gas/tolls as we did on our mortgage. We couldn’t sell the house before moving, but we have renters so major bills are covered. We now rent a small townhouse and I have a two mile commute. We may not have a big yard and we may still have debt (rent is exactly the same as the mortgage but our utilities are lower so we are able to work on getting rid of it), but the amount of time we get to spend together as a family is so worth it. I know it’s extreme, but if you can safely move closer to your husbands work, it might be something to seriously consider.

  14. Carol Perryman

    Since Debbie has just gone to half-time, you might consider renegotiating her student loan payment. We did – one pays only about $30 per month (based on working a part-time job), while the other is $300.

    • Debbie

      Doesn’t this extend the term of the loan and, ultimately, increase the amount of interest paid?

  15. Marjorie

    We moved from Arizona to Wisconsin last year. Food prices went up by about 1/3, rent is twice what our mortgage had been, and property taxes on a comparable house was $200/yr in AZ vs $4000/yr in WI. The area definitely needs to be taken into consideration. I agree usually about not contributing to retirement until debt is paid off, and being gazelle intense about it (Dave Ramsey fan), but at $100k in student debt, I think retirement needs to be funded, at least to what the company will match.

    One thing I haven’t seen anyone address — between “Gifts” “Christmas” and “Birthdays” they are spending $162/mo. That’s $1950 thousand per year. Almost $2k a year on presents and parties, with 100k in debt! Cut back on that. Buy nice seafood and steak from the store, and cook a fabulous shared birthday dinner at home for a fraction of the price. Scale back on kids birthdays, and make memories instead of presents. Who are you giving $87/mo in gifts to? I suppose that could be sponsoring a child or some such, seeing how it’s in the “giving” category, but really re-think that with the amount of debt you have.

    Also, if you’re paying daycare, the kids are really young. You don’t need to spend $1200/yr on sports and acting classes for them. That can wait until they’re older. See if your city or county has youth classes and use those instead. The YMCA often has swim lessons for a very reasonable price.

  16. Minda

    In the long term you can reduce the household goods category buy replacing disposable produces with reusable ones. I’m going through this process right now. I doing so on a replacement basis so the monthly number stays in check. It feels really good to know that every item I replace is an item that I won’t have to buy again for years. I’m getting a lot of good ideas from zero waste and personal finance blogs. The trick is to do these things one or two at a time so it doesn’t feel overwhelming. This month was feminine produces and wrapping paper.

  17. Debbie

    Debbie here. Thanks, everyone, so much for your input and helpful suggestions! Ed and I really appreciate it. Going through this exercise and hearing from all of you has confirmed for us that we really need to make an effort at paying down our student loan debt faster. We know it’s a huge number and that’s partly why we’ve “ignored” it. We used debt snowball calculators to motivate us to attack credit card debt in the past- so helpful for us. This is hard to do with large student loans that are on graduated repayment plans. It would be motivating to see: if we put $X more toward the minimum for X months, it would be paid off in X months. We haven’t been able to figure out how to do this.

    For us, the issue with moving is that we really love our town. It’s a special community with excellent schools (hence the high property taxes), a walking school district, and many conveniences within walking distance or a short drive. The area Ed works in is ok, but lacks many of these things that are important to us.

    We are actively trying to reduce grocery spending. We had joined a CSA over the summer, which added $180 to our monthly bill – way too expensive for us. We meal plan for the week, use coupons and just joined Costco, so we expect our grocery costs to come down to around $600/mo. now that the CSA is ending.

    For gifts, we typically budget $50/mo. to cover family member birthdays, as well as kids’ friends birthdays. Christmas funds go toward our 2 kids, plus 12 other family members – ideas for less expensive gift giving are welcome!

    Mark’s focus on our costly commutes did get us thinking about a work perk I haven’t taken advantage of: free public transportation. And, we live within walking distance to the commuter train. So, I’m thinking this is a no-brainer…

    • Debbie

      I should also mention that I only work 3 days/week and Ed works from home 1 day/week. So, this does reduce our time spent in commute.

    • Caitlin

      One thing that my husband’s side of the family now does for gift giving (at the suggestion of what I do with my 13 cousins each Christmas) is that we all draw one name for gift giving at Christmas time. That way, instead of each family buying gifts for every other family member, you buy one gift for each person (i.e. my husband, myself and our son each have one person to buy for). Now, instead of buying gifts for 7 people, we only buy for 3! We keep the grandparents out of the drawing, however. We also set a limit as to how much money everyone can spend on a gift (usually $20-25). My mom and her five sisters also do this. They only buy for one sister each Christmas.

      Doing this with my husband’s family really gets the kids involved and excited about picking out a gift for the name they chose and helps with everyone’s budget! It’s a win-win since the real fun about Christmas is getting together with family :)

    • Andreas

      We are trying to replace some bought gifts with stuff we made ourselves, like homemade jam, cookies and fruitcake, fruit tea (pick hollander, quince, hawthorn, blackberry, rose hip, apples, and dry them), and beadwork.

    • Manda

      It’s all about prioritizing what is the most important to you! :) It sounds like you’re really trying- so go you!

      I agree on the name drawing idea from Caitlin- our family has been doing it for a few years now and it seems to help with finances overall while still allowing for everyone to share in the season.

      One thing I would like to add (maybe ask?) is how crafty are you? Have you considered making gifts for the family members, especially if you can involve your children in the process. I’ve found that making the gifts tends to mean more to the receiver because of the amount of thought and time you put into them, but the cost can be very minimal depending on the project.

      This doesn’t always have to be “arts and crafts” type things that end up with a trinket the receiver doesn’t know what to do with. It could be food or experience related. For example, one year I purchased vanilla beans from amazon/ebay (1/4 lb for like $7 including shipping) then purchased two-three bottles of cheap alcohol like vodka, rum, etc. You slice up the length of the vanilla bean and put them into the alcohol bottle and shake them up once a day for the first few weeks and once every few days after that, storing in a cool dark place (we used our pantry floor). It takes several months doing this, but the result is the best homemade vanilla you’ve ever tasted! You can use this and just top off with more alcohol as needed, or go to an online vendor for glass bottles or your local hobby shop (I went to hobby lobby and ikea) to get smaller glass bottles to then decorate (glue printed labels ribbon etc) and add the vanilla with a few smaller cuts of the beans inside and give as gifts… The total cost for 4-5 sets of the different kinds of vanilla was around $30 or so? Leftover beans that had been soaking in the alcohol all that time got put into sugar containers and “vanilla sugar” was also made. This was time intensive over the long term but took very little effort and turned into an awesome set of gifts for little $$.

      I also try to give experiences or base materials for projects to children for gifts rather than store bought toys whenever possible… art supplies, supplies for ‘chemistry’ projects, clay, little things to make jewelry out of, etc. or a coupon or gift card to go and DO something with the children… Try to also make it an experience based present whenever possible as those will build memories that last long after a forgotten “new/popular” toy.

      I’m in no way an expert, but I hope these things help!

      • Debbie

        Great suggestions – thank you! I’m no Martha Stewart, but I am pretty creative and now that I have a little more time, since I’m working part-time, I may be able to pull something like this off! Thanks so much for the ideas.

  18. Dan McCurry

    This may also seem extreme, but we walk 2.5 miles every other day to the local Smith’s grocery store. We carry 15 – 20 pounds of groceries 2.5 miles home. (Two gallons of milk is about 16 pounds.) It takes time but we count it as both grocery shopping time and workout time on those days. Amazing how much less you spend on groceries when you have to walk 2.5 miles home with them. Biking works well sometimes though the forecast of snow and cold today plus the preponderance of bike thieves makes walking more practical.

    • Sarah

      I used to always drive to the grocery in the states, but when I moved to Edinburgh driving wasn’t an option so I started walking to the grocery store with an empty backpack to load up the supplies. I would go a few times a week so I never had to carry an insane weight & get back problems. Great workout & my boyfriend and I usually go together & make sure to take a pretty walking route so it’s a kind of nice, cheap date as well.

  19. David B

    Food budgets vary pretty crazily depending on where you live, but yours looks pretty awesomely low compared to mine.

    Re: cutting grocery bills.

    My wife and I took a different approach than the traditional use coupons/bargain shop/buy in bulk method. Instead of changing our shopping habits, we changed our throwing away habits. Over the months we dedicated ourselves to throwing away zero food. We actually cut our grocery bill by around 20% (625 -> 500) and didn’t change our shopping habits one bit (that is coming next for us). One side benefit is that we are no longer teaching our own kids that throwing away their chicken or mac and cheese is ok.

    Anyways, I’m sure you’re already are good at this. I’m just saying it really helped us out a lot.

    • Debbie

      Very interesting! We certainly have a lot of room for improvement in this area; I think we’ll try it!

  20. mnmp

    I live in a high expense area. My property taxes are actually $11,500 per year (almost $1000 per month) and lately I’ve been working on lowering my grocery spending from $1200 per month at it’s highest to last month’s $800 per month. (groceries for us do include toiletries and cleaning items plus stuff like wrapping paper etc) It’s a combination of throwing out less and checking the circulars. Just by shopping and meal planning based on circulars alone I’ve saved $300 in groceries.
    As for something that may be able to cut back on until you pay off student loan debt… If your kids are VERY young (you talk about buying diapers) maybe hold off on spending on their extracurriculars (basketball, acting class). By very young I mean under 7 or 8. I’m biased for swimming because I believe knowing how to swim can one day save their life. But children under 7 or 8 won’t miss basketball or acting class, and it could potentially give you a lot of money to throw toward your debt. I have 2 busy kids, and I do feel as if I made a mistake by overscheduling them. I felt like I was doing the right thing, and it was encouraged by financial gifts from my FIL to pay for ballet class, parkour, basketball. But I realize now in hindsight, they didn’t get much out of any of them until the age of 7. Except for swimming. they both learned how to safely swim which gives us all peace of mind.

  21. Kurt

    While the drastic moves may or may not be appropriate for their specific situation (I think Debbie and Ed are the only ones who can tell us the priority they place in living so far from work), these drastic suggestions do point out the large cost in living so far from work. There is also a lot I don’t know about their situation. What is their home equity? Can they even sell their home, or are they “upside-down” on their mortgage? If they have reasonable home equity, this could possibly cover the “rainy day roof” should it become necessary. But the transportation costs are very high, understandably. I would continue to budget the $450/month for car repair, and if you don’t need it, use the money to upgrade or lease a newer economical car that might have minimal maintenance. This might be cheaper in the long run, especially if the other option is credit card debt. The big commuting cost in my mind is the 3+ hours/day spent commuting that could be spent planning savings, being productive, or being with kids and family. Public transportation, if available, might be a solution–some people can be productive on a train or bus if they don’t have to drive. I see car insurance mentioned, but no budget amount–just because it is paid once/year doesn’t mean it shouldn’t be in the budget.

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