How We Would Live On One Income

The following is a guest post by Crystal at Budgeting in the Fun Stuff. Her blog covers living expenses, saving for your future, and the fun stuff along the way (something us tightwads forget about sometime).

If I do hit my blogging goals and leave my current job to blog full time, I would be way more comfortable if we could simply pretend that my income did not exist. I wouldn't want my slow months to affect our quality of life.

I was thinking about this about the same time MikeS forwarded me this article. Here is their list of suggestions for families considering moving into the one income status:

1. Get on the Same Page With Your Partner
A joint goal is not a joint goal unless it is agreed upon. Obviously if Mr. BFS and I are ever going to make a single income work, we would both have to be involved. Even though we both know who makes more and when, neither one of us would be succeeding if not for the other. We both seem to get that and "ownership" of our money has never been an issue. Thankfully. :-)

2. Carefully Map Out Your Budget
As the article states, you can only figure out what you are willing to give up when you know exactly what you have been spending on. I have kept up with our own spending for more than 4 or 5 years now, so it is simple for us to take a look at our budget and know where our money is going. Prioritizing our spending still takes a bunch of effort when we get to the nitty-gritty details, but just having every single expense in writing really helps.

3. Trim Big-Ticket Items First
I agree that cutting back on big expenses will help a lot more than cutting out occasional indulgences. Don't get me wrong though, daily habits are not "occasional indulgences." I do think that the latte factor is alive and well. Sure, renting out a spare bedroom will give you a lot more money than not having a $5 Starbucks run every morning, but that Starbucks run is also costing nearly $150 a month. Renting out a spare bedroom AND cutting out the daily Starbucks helps a lot more than just doing one or the other.

4. Say "So Long" to the Joneses
I am so glad that Mr. BFS and I rarely get hit by the competitive spending bug. Every once in a while, we will splurge on something we see at our parents' homes since we like it so much (like our 47" LCD TV), but you will never see me buying a $60,000 SUV unless I've won the lottery or something along those lines. Even then, I think you'd more likely never see me again since I'd be vacationing, not buying expensive vehicles, lol. If we did decide to live completely off of my husband's income, you might not see me in a restaurant more than once every month or two...

5. Don't Cut Back Too Much
I could not agree more. As the title of my blog would seem to suggest, I do think that everyone should budget some fun into their lives. A super strict budget without any wiggle room will lead to burnout. As mentioned above, daily habits make need to be cut out, but I wouldn't suggest never going to Starbucks again.

*Side note, I'm only picking on coffee because it came to mind...please substitute whatever your habit is, lol. Mine would be the fact I had to stop buying a snack every day from the vending machine...*

6. Recast Your Savings Strategy
The article suggests living on one income and using the other for savings. That is exactly what Mr. BFS and I do already. If you look at our budget, you will see that the actual expenses account for a little less that 90% of my husband's salary. We use the other 10% of his salary and 100% of my own to cover all of our savings goals and fun money. If my salary takes a hit, we have to readjust our fun money and maybe some of our savings goals, but our day-to-day life wouldn't have to take a big hit. I actually already wrote about what we would cut if one of us lost our job - it still seems to fit our situation today.

7. Give it a Trial Run
I like the idea of practicing living on just one income. During that practice time, the second income could be used to hit debt or socked away as a big emergency fund for when it's no longer just practicing. The article suggests practicing for one year, so I now need to go discuss that with Mr. BFS. I wonder how pretending that I make nothing would end up changing our entertainment budget or our savings goals? If we do try this out, I'll turn it into a series here at BFS so you can all follow along, lol.

If you live on a single income, how do you pull it off? If you don't, would you ever consider it?

Editor's Note: Crystal is a great writer who presents a very balanced viewpoint. She was very kind to assist me by contributing this guest post during a difficult personal time; I whole-heartedly recommend you visit and subscribe to her blog and hope she makes her full-time goal soon.

Using Holiday Gift Cards to Discount Your Year

by Andi B.

I'm a huge fan of gift cards. I'm an even bigger fan of holiday gift card sales. Many restaurants, retailers, and service providers are selling gift certificates/cards at a discount. If you can stock up on these sales now, it offers you a year-long discount on purchases you would already make.

What's the downside? First of all, you may not be willing or able to buy a year's worth of restaurant visits or yoga classes right now. Secondly, many providers use a provision in the laws of some states that allows them to put expiration dates on gc's that have been discounted. (This isn't generally allowed on normal gcs.)

What if it's not offered? Rule #1 is "don't ask, don't get." If you have a service provider that you see on a regular basis, ask if they would be willing to give you a discount on gift certificates if you bought a certain dollar amount. Many independent people will take you up on the deal.

And remember: Be sure to ask if there are any restrictions on use. You don't want to buy a dozen massage gc's only to find out you're only allowed to use one every six months.

Food inflation - Is it on the way?

by Andi B.

I was listening to mp3s of a morning radio show when this struck my ear: Rob, Arnie, and Dawn - Rising Food Prices.

So would you pay $11 for an ear of corn? How would you handle food price inflation? Do you think growing your own food, or entering food cooperatives will help? What about farmer's markets? Do you think food price inflation will hit small local proprietors in the same way it might large chains?

A Rainbow Without Reason

by Andi B.

On Tuesday I was driving into downtown to pick my husband up from work and encountered something beautiful and rare. I saw a rainbow without reason. All the clouds outside were white and puffy, the sky was blue, and the sun was shining. There was no rain, no gray skys, so I was pretty surprised to see a pale rainbow, almost wrapping around the edge of one of the clouds happy cotton ball clouds. This crazy, stupid, wonderful rainbow started to take on metaphoric proportion as I thought about it more.

I can't remember how many times I didn't trust something wonderful or beautiful in my life that didn't emerge from struggle and pain. I almost didn't marry my husband because our relationship was too good, too easy; it wasn't stressful or something that I had to dig deep for. Maybe we're trained to believe that magical things are not to be trusted. When some people are struggling, it's a statement of justification when things go well for others that they worked hard and had a difficult time to get there. But why can't we just be happy no matter what for the good things?

In all honesty, the recession has had a unique effect on our household. When all of our friends were living the good life during the boom, we struggled. When the economy became difficult, we didn't really have anything to lose; we just kept plugging away. Our situation even improved with stable jobs, and a move to a new and better location. I used to think that things were getting better because we deserved it for our struggles, but now I don't feel that way. I like to think that we're all living our lives, and sometimes, there's a rainbow without reason.

Prairie Eco-Thrifter Interview and Yakezie Roundup

This Monday we're interviewing Miss T from Prairie Eco-Thrifter. Miss T is a "prairie-raised woman" who blogs passionately about saving money and environmentally friendly choices. After reading our interview, why don't you head on over to Prairie Eco-Thrifter to check out her story and our favorite post of the week, The Benefits of Being a Gardner.

1. What blog/website do you read most often?

This is tough to answer. I subscribe to 50+ blogs and try to get through each post each week. If I have to pick a few favourites, they would be Frugal Dad, Simple Bites, The Simple Dollar, Get Rich Slowly and Canadian Finance Blog.

2. What made you start writing? Particularly in personal finance?

Honestly, I still ask myself this question. I think it all started once I got married. My husband is a financial guru and has always been very good with his money. He has read almost all of the top personal finance books. Since we got married, I began to share that same passion with him. I took an interest in learning different strategies. I also started to track how I spent my money better. One thing led to another and now I can't stop reading or learning things on the subject. Then, being the collaborative extrovert that I am, I decided to start a blog and see if I could help others and be of some value. Any tip I learn or try I share with my readers in a post. So far, it has been a positive experience.

3. What is your favorite post that you've written and why?

I think one of my favourite posts has been Keeping Yourself Grounded. I like it because it shares what I have learned during my own personal growth process. It outlines what really matters in life and what we should all concentrate our energy on. Essentially, it's a list of principles to live by that can apply to any facet in one's life- finance, family, relationships, etc. I felt really good writing this post because I thought it might really help some people stay strong and feel encouraged during a difficult time.

4. What are the connections you see between green living and debt reduction?

I think they go hand in hand. I have really developed an interest lately in green living and it is amazing how much money you save. We now make all of our own cleaning products as well as body care products. I feel healthier, cleaner, and more attached to mother earth. Plus our household expenses have gone down as a result.

5. How do you feel about frugality in today's society?

Frugality in today's society is a challenge, a mighty challenge. We are constantly bombarded with images and visions of the perfect life that cost tens of thousands of dollars to achieve. Today's society is all about impression and in my opinion often superficial. Few people seem to have any depth these days or care about things that really matter like being genuine, loyal, and honest. I applaud anyone and everyone who has embarked on the frugal trail. It takes courage to stand up and be different. I hope that in due time, society will make a switch and we can go back to the time when life was simple and only the real important things actually mattered.

6. Do you have a favorite cheap eat to share?

...We eat a lot of produce in our house. We grow our own in the summer as well as participate in a CSA. This allows us to build a stockpile for the winter which saves us money on groceries. We also eat a lot of legumes, pulses, and lentils. They are cheap to buy and very nutritious. We also cook at home a lot. If we want bread, we bake it. We eat dinner at home every night and we even have friends over for potlucks. Eating well and cheap does not need to be a lot of work or complicated, you just need to get organized in the beginning.

7. Do you have a favorite money saving tip or practice that you use?

I guess my favourite money tip would be to do as much as you can at home. Workout at home and save money on the gym. Cook at home and save money on dining out. Entertain at home and save money on going out.

8. Looking back on your financial life, if you had to do it all over again, is there any one thing you'd like to do over? Or one thing you believe was a pivotal moment?

I wish I could have been better with my finances when I was younger.My husband and I are still quite young and we are on a great track but I could have added so much more if I had made better decisions in the past. I guess the one good thing is, I can now try to help others and stop them from making the same mistakes I did. I use my blog as one way to do this.

9. And just for fun, if you could be any superhero based on their alter ego, what would you be? (Because we all know Peter Parker and Clark Kent spent more time as themselves than walking around as superheroes.)

I think I would have to say, Spiderman. I guess he just always seemed so genuine and was more concerned about helping people that building his ego. I thought he was a great role model.

For other good reading around the network, check out:

How to Prepare for the Coming Inflation at BarbaraFriedbergPersonalFinance

Snowboarding on a Budget at Canadian Finance Blog

Body Parts You Can Sell at Consumerism Commentary

Use Price Alerts to Get the Best Deal at Couple Money

Accountability Sign-up For Your 2011 Goals at Financially Poor

Homemade Holiday Gifts That Won't Gather Dust at Frugal Confessions

Cheap Remodeling Ideas at Frugal Zeitgeist

How I Spent Only $30 on Holiday Gifts at Inexpensively

6 Tips for Finding a Mechanic Who Won't Break the Bank at Money Funk

4 Common Money Mistakes to Avoid at myjourneytomillions

Samurai Jack's Guide to Personal Finance at Saving Money Today

Is Tipping Getting Out of Control? at Squirrelers

How I Save Money on My Electricity Bill at Sweating the Big Stuff

Are you loaning the IRS money?

by Andi B.

Since I recently reacquired employee status, I had to fill out my W-4 to determine how much would be pulled from my paycheck. It's a simple exercise, but something most people set and forget. I make sure that I give the IRS only what they require. A lot of people I know take the opposite approach and try to have as much withheld as possible so they get a big refund to "put into savings each year."

Why I Disagree

Even though savings interest rates are small, I still manage to get 1%. Even if it's only an extra $20, I would rather take my husband out for a beer. But I do understand that savings is hard and it's easier to save money you never touch.

How You Can Make It Work

The key that most people need is not having access to that money. If you have direct deposit, set it up so that a certain amount or percentage goes immediately to a savings account like ING that requires a minimum two day transfer. In most cases, if it takes time to access, you'll think multiple times before spending it.

The Fear Factor

I think fear is also a great motivator for extra withholding. Of course, no one wants to aggravate the IRS, and no one wants to end up owing money. The concept of being penalized come April can be frightening enough to make sure there's an extra cushion.

Finding the Right Number

So how do you figure out how much should be withheld? You should ask the IRS themselves. You can find a withholding calculator on the IRS website that will allow you to determine how much you should be paying.

The Time is Now

Since it's December, it's a great time to assess your withholding. It will allow you to correct any mistakes so that you don't find yourself either owing money or letting the IRS play with your funds for a year.

Tightwad Meal: Asian Chicken Salad

Tonight was one of those nights where when my husband asked me what's for dinner, I responded, "Chicken."

"Chicken and what?"

"God knows. I defrosted the chicken and that's as far as I've gotten."

So I combed through the cabinets and found:

1 package of Ramen

1 head of Cabbage

1 head of Lettuce

2 carrots

Assorted spices and condiments

I had everything I needed for Asian Chicken Salad.

1. I whipped up a brief marinade of soy sauce, ginger powder, and brown sugar, and baked the chicken at 350 degrees until done.
2. While the chicken was cooking I chopped up the necessary amounts of lettuce and cabbage and grated one carrot into a salad bowl.
3. I broke the ramen into small pieces, but set it aside. (You don't want them getting dressing soggy.) A word to the wise, don't get to vigoruous when you're pounding the ramen bag. My bag exploded and sent little ramen pieces all over my kitchen.
4. Use any asian style dressing you prefer. I made my own from soy sauce, rice vinegar, brown sugar, and powdered ginger.
5. Finally, I chopped up the chicken breast, tossed it in the salad, followed by the ramen pieces and the dressing. Toss and serve.

The total meal cost around five dollars, and was very tasty considering I had no idea what we were eating when we walked in the door.