Surviving the "Economic Crisis"

I know that things are tough all over the country. There are people who are out of work, short on work, and barely making ends meet. It can be disheartening. Trust me, I know how it feels to live on a month-to-month basis, wondering if you will lose it all if the breadwinner is sick a day or two.

This series that I am about to write is our financial story. This all really happened, some of it much to my embarrassment, really. But, I want you to see how we were able to make it through, and hopefully give some ideas that might help someone else.

Last July, I was still not very wise in the finance department. I was still playing games with our checkbook, and taking extreme chances that checks that I wrote wouldn't clear before the paycheck was there. Not very smart! See, what happened, was that I was already 1 week late with my house payment. I wrote the check and sent it off, believing that it would take 3-4 days to get there, and another day to get processed, and another day or two to clear. I was fine to buy groceries and gas...

Well, as you can probably guess, the post office hand delivered the house payment that same day and they personally took it to the bank that afternoon (or it seemed like). So, now fast forward two days, when the groceries check and the gas check cleared. I didn't have the money to cover it all, so when the house payment cleared, I was short. Now, add it bank charges, late payments, and NSF fees from the mortgage company, and you get TOAST! I simply didn't have the extra $100.

So, I did what others have done. I thought to myself that I could make double payments the next month or two and get all caught up. Yeah, you're right, I was dreaming. Maybe that would've worked if I had learned my lesson, but I didn't. I was still not handling the finances that well.

Then, we come up to another payment due on the house. Our mortgage company was not to thrilled when we told them we could only pay one month. They were ready to call the loan due. Simply put, if we didn't make the past due payments within 2 weeks (which would equal 46 days late) they would begin forclosure. We had to jump through several hoops to get them to agree to put us on a program, or we would lose the house.

The program stated that we would have to pay 1/6 of our house payment extra, plus late fees, and program fees PLUS our house payment each month. It came to about $300 extra each month. And we would have to do it for 6 months. If we were even 5 minutes late getting the payment to Western Union (no checks or online banking for this one), we would lose it all. And, for our budget to get streched $300 a month extra? I still shiver when I think about the tears, stress, and the sleepless nights. Didn't they know I have three growing children?

After talking it over with the spouse, we decided that we had two options. One, we could let the house go and find a place to rent. That seemed very far fetched since we would have to file bankruptcy (which seemed extreme) and we had lived in the house less than a year. Or two, we could figure a way out of our mess. We would have to make some radical changes to our money spending habits, and NOW.

The first thing we did was thank the Lord that we could even get the mortgage company to work with us. They didn't have to do anything, since the loan was less than a year old. So, we were grateful, really. Then, we had to stop blaming others for the situation we were in. No one had spent the money for us, we did it to ourselves. Then, we had to decide what was necessary and what was "splurge" expenses.

That was very, very hard to do.

The first and most obvious thing to go was the cell phones. They were $75 a month, and since we had a contract, it would later cost us almost $300 to get out of it. We tried selling our contract with one of those places, but it didn't work for us. We paid the contract and late fees off 7 months later, by the way.

The next thing to go was unnecessary trips. Gas at the time was just over $2 a gallon. I could only put in $20 a week, or 10 gallons. At the rate of 13 mpg, that meant that I could only travel 130 miles a week. Doesn't sound all that bad, until you realize that the closest grocery store is about 12 miles away. Go ahead and add up 4 trips a week for forgotten items, I'll wait.... :) I had to combine trips like crazy. If my son had TaeKwonDo class, I went to the store then. (we kept that class for him, since it was the only outlet he had for his energy at the time)

That lowered our budget about $175 (gas and cell phone). We still needed $125 a month, or we would go under. So, I began to chip away at our food budget. We went on a "survival" diet, or beans and rice at least once a week, very little eating out, and nothing way too fancy. We gave up pop, name brand cereal, and other things that we had been buying. I didn't buy too much in the way of fresh fruit, either. I just couldn't afford it. (The kids still won't eat raisins anymore...) I had to do whatever it took.


I shopped at Aldi once a week, only getting the very bare necessities. I had to spend a lot of time figuring out what to make for meals that week, and make a very detailed list. If I forgot an item, I had to do without. I read the book "Miserly Moms" by Jonni McCoy, and got many ideas from her as well. I learned to make things from scratch that I had previously bought before, and how to "make it do".

But, no, it wasn't easy.


We had (have) a 104 year old house that needed to be fixed and repaired. All that had to come to a screeching halt. We would have to live with the old windows. We couldn't afford the plastic kits at the time, and winter was coming on. So, we hung blankets in the windows to help keep the drafts out. We dressed warmer, and in layers, and turned the furnace down to 66. I put extra blankets on the kids at night as well.

Fortunately, this was the year that they still fit into their winter clothing. At least they could go outside and play. The hardest part of all this was not letting the kids in on just how bad things really were. We told them that we needed to cut back some things and really watch our spending for a while. We were making changes in our budget, that was all.

And it went okay for a month or two. Then, the holidays came...

Check back tomorrow to see how we made it through Thanksgiving on our strapped budget.