This reader story comes from Paul. Some reader stories contain general advice; others are examples of how a GRS reader achieved financial success or failure. These stories feature folks with all levels of financial maturity and income. Want to submit your own reader story? Here’s how.

I’ve always had what I term a “fluid budget”; that is, I always make sure I have more money coming in than going out and I don’t track every penny (though I have a good idea where everything is going). I’ve never made more than $40,000 a year in my lifetime (I’m 34), but I have always worked from the time I was twelve years old. I can also honestly say I’ve never spent more than I’ve earned, thanks to a father who viewed debt as a kind of slavery. Looking back, I’m grateful for this somewhat extreme worldview, as it forced me to be resourceful.

Saving is a priority for me because I was raised to believe that money gives you options and not having money means not having options. This could be the option to choose a different job if needed, take a vacation, buy in bulk when it is cost-effective, and allow my wife and I not to have to fight about every expense or stress about purchases. I don’t know about you, but I like having options.

I was grateful that, when my wife and I got married four years ago, she was willing to adopt a more financially mindful lifestyle. (She was a bit of a spender.) I, in turn, have learned to loosen the reins over time to allow for some more relaxed spending. I think we’ve found a healthy balance and thankfully we don’t fight about money too much (which is worth its weight in gold). We don’t feel deprived or that we are extreme cheapskates, though some things might seem extreme (a matter of perspective if you ask me).

Here are some examples of how we try to cut expenses and live within our means:

  • We use rags instead of paper towels in the kitchen.
  • We use a bidet attachment (pretty standard in Europe and Asia, though we are American and it’s basically unheard of here), which saves money on toilet paper and is more hygienic. (We still have toilet paper for guests.)
  • I bought a $20 clipper set and started cutting my own hair and my children’s hair recently. It’s easier than I thought, saves me the hassle of going to the barbershop, and doesn’t look bad either!
  • We hang our laundry out to dry and make our own laundry soap. Takes five minutes for each.
  • Even though we live in a townhouse, we have a small garden that produces fresh produce for the summer (tomatoes, eggplant, peppers, cucumbers, zucchini, strawberries, lettuce, and herbs). Gardening is a relaxing hobby for me, not work.
  • We get books and DVDs from the library. We don’t have cable (though we do have a Netflix subscription that is $8 a month)
  • We don’t eat a lot of meat. Instead, we make lots of dried beans/legumes and lentils, rice, pasta, grains, frozen veggies. I bake bread. I feel that we eat well and balanced.
  • I try to shop for clothes infrequently and, when I do, it’s often at Goodwill. Generous friends have given us lots of hand-me-downs for the kids.
  • I get snacks at the Dollar Store.
  • I try to bike to work a few days a week to save on gas and wear and tear on the car, and get some exercise and free endorphins. It is 35 miles round trip, but I have an electric assist which keeps me from arriving all sweaty or too tired.
  • We bought our cars used on Craigslist and paid cash. They are ten years old but are reliable (Toyota and Subaru) with low miles when we bought them, and are good on gas.
  • We don’t tithe 10 percent of our earnings, per se, but we do contribute financially to our church and to those in need.

A lot of these money-saving tactics have been added gradually over time, not all at once. Sites like GetRichSlowly have been great for learning the tricks of the trade from people with similar financial goals.

As for expenses, here is a breakdown of what is going out each month for our family of four:

  • Mortgage/taxes/insurance: $1,130
  • Daycare: $1,560
  • Water/Sewer: $36
  • Cell/DSL/home phone: $180
  • Car insurance (2 cars): $128
  • Car maintenance/registration (average): $30
  • Gas: $200
  • Charitable Giving: $200
  • Groceries: $400
  • Utilities: $110 (average)
  • Diapers: $90
  • Health Insurance (through our jobs): $290
  • Dog food/vet: $35
  • Misc: $400

Based on our income, I have calculated our savings rate to be about 40 percent after expenses.

A couple notes:

  • We pay off our credit cards in full every month.
  • We do not have student loans. My parents paid for college (though I graduated in 3 1/2 years from a state school and also received scholarships). I worked my way through grad school, taking one course a semester and paying as I went. My wife earned her BSN at a state school which her parents paid for.
  • We have been prepaying our mortgage for the past few years pretty aggressively. We are set to pay it off by the end of the year on my wife’s 40th birthday. We live in a modest townhouse in an urban area. Our interest rate at present is 5 percent.
  • Living in a 1,100 square foot house means our utilities are relatively low, we have no lawn maintenance, and housing repairs at this point are minimal and manageable. We have no homeowners association fees.
  • We have no other debts.
  • Our jobs are relatively secure.
  • I contribute $300 per month to my employee pension plan and also max out my Roth IRA. My wife contributes about $500 a month to her retirement plan through work.
  • We have a healthy emergency fund and are looking toward learning more about investing once the house is paid off.
  • Daycare expenses will phase out in a couple years. Schooling for our children is the big issue at this point, or at least it will be in a couple years. The public schools in our area are not an option, and private schools are somewhat pricey. We are leaning toward homeschooling, which is why we are saving so aggressively and planning to pay off the house this year, so that my wife might be able to cut back to part-time work. I would love to hear from anyone who has gone this route, and if it has been a worthwhile endeavor.

Shifts in perspective have been helpful for recognizing the richness of our life (even though we are not, by any means, rich in the normal sense of the word) — that is, focusing on what we have, not what we don’t have. We have hot water on demand whenever we want it, our roof doesn’t leak, and both of our children have their own bedrooms. We have never gone hungry. We have personal vehicles to take us wherever we want to go, whenever we want. We are in good health and have family nearby. We are both gainfully employed. We enjoy things like walks in the park and ice cream cones and time together as a family. We are able to give to those in need.

The other thing that has been helpful whenever the temptation toward spending our hard-earned money presents itself is to remind ourselves that doing so is borrowing from our future selves. It takes time and practice to develop good financial habits; but the thought that doing so is benefiting our future selves keeps us going, one dollar at a time.

Reminder: This is a story from one of your fellow readers. Please be nice. It can be scary to put your story out in public for the first time. Remember that this guest author isn’t a paid or professional writer and is just learning about money like you are. Unduly nasty comments on readers stories will be removed.

This article is about Reader Stories

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This article is by editor Linda Vergon.

This week, Phoenix, Arizona, had extreme flooding and, before that, Napa, California, experienced a 6.0-magnitude earthquake. Landslides, earthquakes, extreme heat, floods, hurricanes, severe weather, space weather, thunderstorms and lightning, tornadoes, tsunamis, volcanoes, and wildfires are just some of the natural disasters that can plague us in a given year. Yet “nearly 70 percent of Americans have not participated in a preparedness drill or exercise outside of fire drills at their place of work, school or home in the last two years,” according to Gwen Camp, director of FEMA’s Individual and Community Preparedness Division.

September is National Preparedness Month, and the theme this year is “Be Disaster Aware: Take Action to Prepare.” Throughout the month, FEMA will be helping individuals and communities understand the risks and gather the tools they need to be more resilient in the face of natural disasters and other emergencies. They are sharing information and resources to community leaders, schools, houses of worship, and businesses that want to organize preparedness training events twice a year in April and September – and you can get involved too. Each week they will help people take some sort of action to prepare themselves for an emergency because, as we all know, many of these events come as a complete surprise.

Most all of this activity will culminate on September 30 in America’s PrepareAthon, when a lot of communities across the nation will hold some kind of event designed to provide information or even train people on what to do when disaster strikes. Some events may occur in later weeks. It all depends on a community’s overall calendar of events, but FEMA’s website, Ready.gov, shows when and where these events will be occurring: America’s PrepareAthon Event Map.

If you can’t participate in an event, FEMA’s site is a great resource to help you plan for all kinds of emergencies from pandemics to winter storms too. Their Natural Disasters web page is an excellent resource to understand about each of the disasters listed above, as well as how to make a plan, build an emergency kit, and help your kids deal with disasters too. For those that are interested, Red Cross has a number of natural disaster applications for your smartphone too. Teach your kids and elderly family members how to use them!

FEMA wants you to learn about your local hazards and take action by practicing plans and participating in a PrepareAthon event. And I think this is an important part of emergency preparedness that is often overlooked. Participating in such an event is a good way to get involved with your community programs, houses of worship, schools, and workplaces. When you make yourself known to people in the emergency preparedness community, they will recognize you as someone that has training and is reliable to offer assistance to others in need. So often when disasters strike, people are offended when a law enforcement officer, firefighter, or other individual doesn’t accept their help. But honestly, if they do not know you, they can’t in good conscience enlist your support in any way. And without proper training, you can be a potential hazard to them in their effort. Make yourself known to the emergency preparedness workers in your community, so at a minimum they are aware of your ability to help and your intentions.

Do you know which disasters could happen in your community and what to do to be safe and mitigate damage? Will you participate in your community’s disaster planning efforts?

This article is by staff writer Kristin Wong.

(This is Part III in a series about challenging traditional measures of financial success. Part I was The “Ivory Tower”: Reconsidering the college investment. Part II was Challenging traditional measures of financial success: Homeownership.)

It was the first semester of my first year of college. My friend and I were driving around our small town, looking for something to eat. But we didn’t have much money, so our options were limited. Chili’s sounded good, but neither of us could really afford it.

“It’s weird to think one day we won’t have to worry about this,” my friend said. “In a few years, we’ll graduate, and we’ll have jobs that pay us like, $30,000 a year and we can go to Chili’s whenever we want.”

This was 2001, so it wasn’t just a crazy dream.

I imagined working 9 to 5, in an office, where I had a desk and salary with benefits, and at the end of the day, I went home and did whatever the hell I wanted with my life. At 19, that seemed almost too good to be true. I was really attached to the idea that, someday, I would earn tens of thousands of dollars a year and be able to more or less spend money the way I wanted.

My point is that was the idea back then: Go to college and get a steady, 9-to-5 job.

Years later, I’m starting to question this paradigm — and I’m not alone. We already talked about the way college is changing, but the workforce has been changing a lot too.

Questioning the stats

We read that jobs are being created and unemployment rates are decreasing. For example, the Labor Department recently released data showing that 209,000 jobs have been created in the past six months. But while the unemployment rate has increased slightly from 6.1 percent to 6.2 percent, overall, it’s been on a steady decline.

The GDP has been significantly and steadily growing since the recession, but unemployment remains a lingering problem. You’ve probably heard the argument before – Huffington Post contributor Mark Gongloff explains it well:

“Technically speaking, unemployment is the percentage of people in the ‘labor force’ who don’t have a job. To be counted in the labor force, you have to be looking for a job. One reason unemployment has fallen so quickly in recent years, from a peak of 10 percent back in 2009, is that a lot of people stopped looking for work. They took themselves out of the labor force. Once they stopped looking for work, they stopped being counted as ‘unemployed.’ Voila, the unemployment rate goes down.”

Gongloff argues that the small increase in unemployment is actually a good thing — it might indicate that more people are returning to the workforce but they’re just not immediately finding work. But the good news is, they are returning. Even if you argue that his assertion is questionable, it is still possible.

It will take time to truly see how employment has changed. But for now, it seems we’re a country in transition.

The rise of self-employment

When I was laid off last year, I considered going back to a full-time, 9-to-5job. But after being a freelancer for so long, and especially after losing one big client, I liked the idea of having multiple baskets in which to put my eggs. That was my biggest concern — if I accepted a full-time job, could I still freelance? I wanted to make sure I had a backup plan.

This way of thinking, explains Forbes’ Kate Taylor, might be the norm for people my age. She writes:

“Millennials entered the job market in the wake of the recession … Millennials are conditioned to expect economic disruption, and have thus become risk adverse … job turn over and exploration of more flexible labor sources reveal Millennials’ fear of putting all their (career) eggs in one basket.”

Not only that, but I couldn’t even find a 9-to-5 job. Most jobs I interviewed for were part-time freelance gigs. And, sure, that probably comes with my industry — writing gigs are easier to get than writing jobs. But on the whole, freelance/self-employment seems to be increasingly popular lately.

A few years after the recession, the rate of self-employed workers significantly increased. According to Economic Modeling Specialists International, the number of self-employed workers increased from 1.3 million since 2001 to 10.6 million in 2012.

Yes, those numbers have since dropped. But experts say it might be less that people are returning to the traditional 9-to-5 job and more that they’re working part-time jobs and then supplementing income on the side. So they’re not exactly self-employed, but they’re not working full-time either. Maybe it’s not as easy as it seems to gauge the way people are changing how they work.

The “grey economy”

And then there’s the “grey economy,” the idea that unemployment rates are dropping because many people simply work under the table and off the books. Nik Theodore, an urban planning professor at the University of Illinois, recently told the Los Angeles Times:

“This segment of the labor market is a barometer for the economy as a whole. As employment insecurity spreads across the economy, more and more workers are being forced to turn to the street, to odd jobs, to becoming on-call workers. The question is whether this is a cyclical change, a blip or a signal of something much more fundamental.”

Technology is another important factor to consider. We’ve been talking about this for years, technology replacing jobs. But it may become a more pressing concern in the near future. At a recent speech at the American Enterprise Institute in Washington, Bill Gates said:

“Twenty years from now, labor demand for lots of skill sets will be substantially lower. I don’t think people have that in their mental model.”

Between the economy, the post-recession mind-set and the role of technology, the traditional 9-to-5 model of earning a living is being challenged. In short, we’re adapting. But where will we go from here?

When I started writing this series of posts on challenging traditional models of financial well-being, it started off as one post. I just wanted to write about how we’re in transition — how college and homeownership and the workforce are changing.

But there was a lot of information and points of discussion in each of those areas — and so much of it is debatable. Unemployment is a complex issue; and while I feel like self-employment is the way of the future, not everyone agrees with this. Some think unemployment is on the mend and people will return to the paradigm.

What do you think: Will we return to the traditional model of earning income from one steady source or will we adapt to the point that full-time jobs are no longer the norm?

This article is by staff writer Holly Johnson.

Last week I was out walking with a friend when she admitted she was scared she would never have kids.

“We’ll never be able to afford them,” she said as we made our way around the block and up the next street. She and her husband are about our age (and not getting any younger), and I could tell she was worried.

“Oh, I’m sure you’ll figure it out,” I said as I tried desperately to change the subject. That was terrible advice and I knew it, but it was the same advice someone had given me several years before. (And probably for the same reasons.)

When it came to having a baby, I’m glad I followed bad advice

Having a baby

It has been over six years now, but I still remember it like it was yesterday. I was working at my old job in the mortuary and surrounded by a bunch of senior ladies who made up our widow’s outing group. We were chatting up a storm when the conversation turned to kids and if I ever planned to have them.

“I honestly don’t know,” I said.

We didn’t have maternity insurance through work at the time, and I knew it was prohibitively expensive. I also knew that we weren’t saving much at all, which was a shame since our income looked good on paper. As I explained my concerns to the women, they simply smiled and nodded. I wanted kids, I told them, but I was afraid of what it would mean to our bottom line.

Strangely, it was as if they already knew what I was going to say before I said it.

“Please just have children,” said one of the ladies, laughing as she spoke. “You’ll thank us later.”

The entire table then broke into a fit of laughter as I sat and listened to a group of women who seemed to know something I didn’t.

“Don’t wait for the perfect time,” said another friend. “It doesn’t exist.”

Throwing caution to the wind

And that’s exactly what we had been doing. We were waiting for the perfect time to come without realizing that we might end up waiting forever. So after some soul-searching, we decided to go ahead and try for our first child. And after applying for several types of maternity coverage, I finally found a plan that would accept me. Finally.

Then I waited nine months until my coverage became “active” so that my pregnancy would indeed be covered by insurance. (This was in 2008 — before the passage of the PPACA and when pregnancy was seen as a pre-existing condition.)

The wait was awful, but I was lucky. Within a few weeks of trying for a baby, I found myself pregnant and spending the majority of each day with my head hanging low, trying not to throw up as I hobbled through my responsibilities at work and at home.

I was sick – very sick — but I was soooooooo happy.

Unfortunately, I was also clueless. The truth was, I only had a vague idea of what having a baby would cost us. And sadly, I was in for a rude awakening. For starters, the maternity rider on our insurance climbed to over $500 per month at the one-year mark of my coverage. And that was just for the maternity rider. It didn’t even include our regular health insurance coverage.

Second, my insurance deductible was over $4,000, an amount of money that we barely had saved at the time. And third, I hadn’t even considered the cost of daycare, formula, or what kind of pay cut I would take during maternity leave.

With all the balls up in the air

Fortunately, the ladies were right — things actually did work themselves out.

Due to some minor miracle, we got raises around the time our first child was born. Christmas bonuses from work paid our insurance deductible for the hospital stay, and we managed to absorb the cost of daycare and everything else without too much trouble.

On the other hand, we weren’t doing as well as we probably should have been. We still had student loans, car loans, and credit card debt after all, and we also lived in a fairly large home that cost a pretty penny to maintain.

In a lot of ways, we were barely keeping all the balls up in the air — robbing Peter to pay Paul, raiding our meager savings to pay for basic necessities, and sacrificing tomorrow in order to afford today.

But then, all of a sudden, everything changed.

Two mouths to feed

Before I knew what hit me, I was pregnant with my second child. The clock was ticking. We made it work the first time, but now things would be different.

We once again had that $4,000 health insurance deductible to pay, and I would once again need to go on maternity leave at half-pay. But now I would have two kids in daycare, two mouths to feed, and two children to care for financially and emotionally. Something had to give.

So we embarked on a journey to get our financial house in order. We started by creating a zero-sum budget to track and monitor our expenses and we whittled our monthly bills down to only the bare necessities.

All those small things made such a huge difference to our bottom line that debt repayment became nearly painless. And over the next few years, we paid off $60,000 worth of unsecured debt, paid down our mortgage to a reasonable level, and stashed away a cash emergency fund for the first time ever.

What I gained from following bad advice

It’s pretty amazing when you think about it: The biggest financial gains we have made during our marriage came at one of the most expensive times. In a sense, our kids actually made us snap into reality and take our financial lives seriously. They gave us a purpose; they gave our marriage meaning. And I now realize that they were the motivation we needed to straighten things out.

Did my friends give me bad advice? You bet they did.

But now I realize that it was the only advice that made sense.

Just as I suspected, they knew something I didn’t. They knew that having kids has a way of changing everything. They knew that seeing my children’s innocent faces would force me to take life seriously in a way I hadn’t before. And they knew that there truly is no perfect time to have children; but that if you want something bad enough, you’ll find a way to make it work.

And most of all, they knew that it would all be worth it — every dollar spent, every tear shed, and every sleepless night.

And they were right.

Have you ever made an important decision based on bad advice that turned out for the best? Do you think there is a perfect time to have children?

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