Hey, frugal friends! Welcome to our new series, Fruclastically Frugal. In this series we’ll interview people who are living well on a smaller income. Our hope is that this series inspires you to manage your money in a way that allows for a fulfilling life and financial peace, no matter what your income!
Today, we’re interviewing Laura Harris from Piggy Bank Dreams. Laura and her husband, Dontae, are raising their two children in a Fruclasitcally Frugal way. Enjoy!
1. When did you decide that you wanted to learn to manage your money better?
My husband and I got engaged in 2011. That same week, we heard about a class starting at our church called “Financial Peace University”. The information we learned in FPU really inspired us to manage our money better. Because the material was so inspiring, I ultimately went on to become the FPU coordinator and financial coach at my church.
2. As specifically as you are willing to share, what is the range of income that you are currently living with/have lived with?
We are a family of four living on around $35,000 this year. When we were both working full-time in 2012, we brought in $48,000. Two awesome kids later, I became a stay-at-home mom. This spring, Dontae took a new sales position at work that is commission-based. It’s the nature of the job to start with a very low salary, but the earning potential in the long run is great.
3. Do you have a mortgage or do you pay rent? How much are your monthly expenses to cover housing?
We are currently renting a modular home. Total monthly expenses for housing are between $470 – $580. We are fortunate in that our rental is owned by my parents. So the rent is considerably cheaper. We knew our main goal was to create an opportunity for me to stay at home with the kids. Having their grandparents nearby is really great too.
4. What is your view on debt and what is your current debt load?
We both went the “build your credit” route at a young age. I took out car loans, student loans and swiped credit cards. I never felt like I was “getting ahead”. Dontae accumulated student loan and credit card debt. After graduating from college, he interned for a year, largely living off credit cards. Eventually he defaulted on the credit card debt and it went to collection.
When we got married, we had $22,000 in debt, an outstanding judgment and no savings. After beginning the Financial Peace baby steps, we did everything we could to blast away debt. We lived on Dontae’s income and put mine toward debt. We drove old cars. We sold our smart phones. Two months before our daughter was born, we became 100% debt-free. We even saved up enough to pay for the hospital bill in cash.
Our baby came into a debt-free home. Sure we were broke. But it was a colossal milestone for us.
5. How much of your income do you currently put toward savings/retirement/kids’ college?
We really thought we’d have to put our dream of buying a house on hold during this lower income “season” of our lives. But then I discovered the 52-week Money Challenge. So every Friday, we put money into our house fund. On week #1 we deposited $1. On week #2 it was $2. And so on. By the end, we’ll save $1,378. Sure we will try to save more, but do you know how empowering it is to think you can’t afford your dream and then find a way?
We also have an emergency savings that we deposit as much as possible into. Our goal is 3-6 months of living expenses. Some months, we can’t contribute anything. It just varies. The bigger goal is to not SPEND it.
Currently, we contribute to a 401k and Roth IRA. Our goal eventually will be to invest 15% of our monthly income, but right now I’d say it’s less than 10%. Trying to focus on the emergency fund.
We were blessed by some terrific friends who started a college fund for our daughter on her first birthday. But, we aren’t actively contributing to college funds until our emergency fund and down payment are set.
6. What percentage of your money is spent on non-essentials such as eating out/going to the movies?
Here’s another one that varies, but I’d say we keep it to under $100 per month. With Dontae working 50-60 hours per week, and me being at home full-time, we don’t have a lot of opportunity to go out. We’ve been without a second vehicle for the last five months, so that has nearly eliminated needless shopping. I borrow a vehicle from my wonderful mother when I need to buy groceries, go to appointments or just get stir crazy!
We sound super disciplined, but it’s more like we are forced to stay put. Trust me, when I was young and single, I lived on Taco Bell and $3.50 chai tea lattes every day.
7. What are your top tips for managing money on a smaller income?
Create non-negotiables. Agree on them together. For instance: Tithe first. No matter what. Save. No matter what. Walk into a grocery store with a fixed dollar amount you won’t go over. No matter what. Get $1,000 into an emergency fund very quickly. Target your debt and eliminate it. When times are tough, your non-negotiables are worth defending.
8. What is your advice to those who say they can’t live on less?
Your most powerful financial tool is contentment. When you challenge “living on less” with a future opportunity (i.e. traveling more, paying off your house early, raising generous, respectful children, retiring a millionaire), it makes it easier to say “No.” You can more easily combat jealousy, defeat and “keeping up with the Joneses” (who are probably knee-deep in debt anyway).
9. What are your keys to successful budgeting?
This is the part where I jump off the stage and take a seat on the floor amidst the crowd. Preferably toward the back.
I totally still struggle with living on a budget. In fact, I don’t know anyone who doesn’t. Every month is so different, and life has so many variables. We have learned a ton, often the hard way. So here is our #1 most successful budgeting tip:
Do a budget.
Every month. Write it down. Type it up. Live off it. Mess up. Give each other grace. Repeat.
We have been doing that exact formula for the last four years. I guarantee the months when we skipped a budget are when we robbed from savings. You don’t have to have a degree in finance to live on a budget. You just have to keep trying.
Don’t wait until your friends think it’s cool to budget. Lead by example.
10. What’s the main money goal you’re working on right now?
We are saving for our first house. Trying to be patient. Growing with excitement.
To learn more about Laura and Dontae’s journey toward financial freedom, you can find Laura blogging at her blog, Piggy Bank Dreams.
To share your own Fruclastically Frugal story, contact us at fruclassity at yahoo dot com .