My name is Ruth and I’m a stay-at-home mom for our four kids. When our first child was born, I vowed to stay home as long as we could afford it. It’s been 16 years and three more kids since then, and I’m still here.
I was always very frugal, living within my means, avoiding debt and dabbling a little with mutual funds. Most of this I learned from my frugal, prosperous parents who have never flaunted what they have. I was fortunate in that my parents paid for my undergraduate education, so I was never strapped with student loan debt. When I moved back home from college, I started my first job with only 41 cents in my checking account — but I had no debt.
My husband, who works as an electronics technician, was the youngest of seven children in a very poor family. As I understand it, his mother probably could have fed an army with little more than dirt. When we met, his only debt was on his car, which he paid off around the time we got married.
We’re currently debt-free.
Our Household Expenses
Seven years ago, we paid off the mortgage for our very-average four-bedroom house on one acre, in one of the best school districts in the state. Property taxes and insurance run us about $240 per month.
Our electricity, gas, water and telephone are approximately $300 per month. We also pay $120 per month for Internet, cable and house-phone service.
I’ve really let our grocery expenses go lately; they currently run between $500 and $600 per month. (Oh, the days of being able to feed our family for under $250.)
On average, we spend about $100 per month on gasoline. We’re a one-vehicle family, sort of. We have a minivan that I drive most of the time. We paid for it in cash, of course. We are very fortunate in that my husband’s employer provides a vehicle for him to use for work purposes, including driving to and from home.
Our oldest child is learning how to drive and we’re considering buying another vehicle in the near future, when and if we find the right deal.
Our family health insurance through my husband’s employer is $65 per month. It used to be zero, but we have absolutely no room to complain. Most of our doctor visits have a $15 co-pay, and we pay 20% of bills up to the deductible. Our highest out-of-pocket health expense is for eye care, since four out of our family of six wear glasses. So far, our family has been blessed with good health.
We also contribute money each month towards our savings and retirement accounts, as well as our kids’ Educational 529 accounts.
Between our checking and savings accounts, our emergency fund adds up to about $55,000. This is probably more than it should be, but I like to feel comfortable with a nice cushion.
Overall, our household expenses run somewhere between $20,000 and $25,000 each year.
We are a family of mostly introverts, so we don’t get out that much for entertainment. About a year ago, when our Internet connection desperately needed upgrading, we finally caved in and got cable TV with one of those package deals, but I’m not impressed with it.
My kids play more video games than I want to admit.
We’re active in our church, which includes many camps for the kids and the whole family.
A few years ago, while my husband was a reservist stationed in Florida, we spent several weeks of the summer with him and did the rounds at all the big amusement parks. Yes, it was expensive, even with the generous discounts for military. Most of the time we take weekend road trips closer to home.
Managing the Finances
After our first child was born, I started reading about frugality and personal finance. Okay, I did a LOT of reading. I think I read every book in the personal finance section in the library, and then some. This helped me to hone a lot of skills related to both reducing expenses and investing wisely. Now I write about it at my own blog, Mother Frugal.
As far as managing our household finances, my husband has no interest in it so he lets me run the show. He determined an “allowance” that is automatically withdrawn from his paycheck to his account — the rest goes to my account from which I pay all of the bills. We still have the same checking accounts as before we met. For estate planning purposes, we’re both listed on these accounts, but we each manage our own.
Most of the time, our accounts are fairly equal after all has been paid. If they become really uneven, we’ll do a transfer, but that has rarely happened. It works for us.
We’ve never really had a formal budget, but I do keep track of nearly every penny we make and spend on a spreadsheet, so maybe there is an implied budget there. When you know where you’ve been and where you are, it’s pretty easy to know where you’re going.
If you’re a household CEO who is successfully making ends meet on roughly $40,000 per year or less, I’d love to hear from you. Contact me at Len@LenPenzo.com and be sure to put “$40,000” in the subject line. If I publish your story, you’ll get a $25 gift card!
Photo Credit: Roy Montgomery