Household Budget with Not Enough Money

Parent Q&A

  • We are a young family in Berkeley with an infant.  Our careers are not terribly lucrative and seem to be inadequate for the price tag of the East Bay. We are looking for some kind of therapist or life coach who can help with our finances, relocating to another place, and just someone to help organize our ideas and goals with. Any suggestions?


    Hi there--I'm not a life coach and don't have any recommendations for you on that front, but I wanted to let you know that I feel exactly the same way. I've been living in the Bay Area for 15 years and the finances have been such an ever-present struggle. I often get down on myself for not accomplishing more creatively or in service of the community, but then again I can remind myself that I've done some wonderful things and met some amazing people while keeping myself housed here. And I'm so happy to have reached a place (financially & in my relationships) where I could open up to becoming a parent and now be struggling to keep my baby housed here. The goal-post is always moving, and sometimes my perspective shifts from a position of self-assurance to one of despair.

    All that to say: I feel you. You're not alone. And, if you ever want to get together to talk it out, feel free to message me. I don't have any advice, but I do have a sympathetic ear.

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We don't seem to be able to live on what we earn

June 2007

I recently quit my job to become SAHM of 3 (twin babies and toddler). This took our gross salary from over $200k a year to about $125k a year. We knew we would have to make some living adjustments, but we still don't seem to be able to live on what we earn without going into savings each month. I'm looking for advice on some ways to cut costs. Here is what we have done thus far.

No cable. No cell phones. No gardener. No spending on seemingly small things like (on Starbucks or Peets.) Wah! In fact, no cash or ATM use at all except at grocery store. No purchases on credit card No buying books. Only using library. No renting videos. Library again! Shopping at Costco on bulk staples like meat, diapers, etc. No going out to eat. Lunch included. Only getting clothes for kids second hand. No new clothes for us. Basic energy conversation stuff like running full washer/dishwaser/dryer and turning lights and heat off.

Our only debt is our house payment. We live in a small two bedroom house that we just refinanced to save some money. We both have used cars (5 and 9 years old) without any payments. So we basically have bills (phone, water, health/car/home insurance, etc), food, and diapers (and lots of them.) Our only luxury is a housekeeper every other week so we can keep our sanity. You'd think we should be able to live on on my husband's salary, but it isn't the case.

What else can I do to save money each month???? Need to spend less...

Hi, One way that I save money is by meal planning. I sit down at the beginning of the week, plan all the meals, then go to monterrey market and buy everything. It's very surprising how much cheaper it is that way- instead of getting busy and being 'forced' to go out to eat, which is what would usually happen. Daily shopping at Andronicos is so expensive, too. Mont Mkt is so much cheaper for produce- but going more than once a week would drive you crazy! You also have the opportunuty to plan meals that use some of the same ingredients. And, you have the 'what's for dinner' question answered for the rest of the week! Food is such a cash-hog... i hope this helps. Gourmet on the Cheap

Frankly, your problem sounds odd to me. My husband and I have a combined income of around $70,000 and manage credit card bills, home payment, Starbucks, dinners out and cable television. It sounds like you have a serious money leak that you can't see. I recommend hiring a financial advisor to analyze your spending and saving habits. Poorer but living better

I'm a little baffled. We aren't as strict with money on the things you listed (cell phones, eating out), and we survive just fine on half your income. I would suggest keeping a very detailed log of where you are spending your money. That'll help you see where it's going so you know where to cut back. Good luck! anon

In a word, move. Seriously, I'm not trying to sound mean. Just realistic. If you can't live without all that and it still costs you $125K plus to live here, you are in the wrong place. I was actually stunned by your post. My husband makes half that, we live in a two br house, have no credit card bills, but still have all the amenities like cell phone, cable etc. and eat out when we choose (though we all bag lunch it) and we save $100/month in a 529 account. We have lessons, braces and all. One of my kids goes to private school (though we do get a nice scholarship). Nothing fancy or extravigant, but we definately don't go without. If we lived off of $125K a year, I'd consider us rich. Sorry, but I don't know what else you can do. Maybe call a Financial Planner and figure out where all that money is going to? Living off of $65k a year.

If your house, and its expenses, are your only debt, it seems that's the thing you have to downsize. We are a family of four (two kids in diapers) and we live relatively comfortably on about $48K. We rent, and that presumably helps a lot with the expenses, but otherwise, we live a much more luxurious lifestyle than you, from what it sounds like -- cable, netflix, the occasional dinner out (maybe four times a month). We don't put any money into savings (though we have a small amount for emergencies), and we don't really go on vacation or buy anything big -- at all. We hardly buy clothes, and we have one car. Feel free to email me if you think I can be of any help with your dilemma. sfil

It's always much trickier to downsize than it is to upsize (I can ALWAYS find new creative ways to spend money!) Two thoughts - One is to hire a financial counselor (not a CPA or financial advisor/planner) but someone who will sit down with you and look objectively at your budget to help you stay living within your means. A fabulous resource is Susan Bross (415)479-1290 The other is to get a PT job you can do at home, at your leisure, while the kids are napping or asleep to bring in a bit more income. An example of such a job is a virtual office assitant or I know someone who is the ghost-writer for a blog site. You can probably Google for more info, look on Craig's List or even post a job-wanted ad on CL. Good Luck Susan

Hi, Congrats on your decision! You have a great list of things...I can add a few (maybe you're doing them already?). First, preschool. What about delaying preschool from age 2 to 3? Also consider a coop program--cheaper if you can give your time. I'm not sure if you and your husband get out much (there are free things to do out there) but joining a babysitting coop can help--no pricey sitters. We live in Lamorinda but I know the Berkeley area has them too. Lastly, what about coupons? Scour the Sat/Sun paper and sign-up for Huggies coupons at their website. Make sure you budget a little for fun! Lisa

Our situation is roughly similar to yours, but we have one less child. Perhaps that extra child makes a big difference, bcs I don't generally feel that we are struggling on one salary of $120k. On the contrary, i feel like we are really lucky compared to many others because we sometimes have a little extra money to put away for retirement. And yet it sounds like you are already economizing in many ways. Maybe taking a look at the food category would be useful-- for our family, I generally shop at Monterey market (so cheap and fresh, with really nice people working there),Safeway, and Trader Joe's. I have tried Andronico's and Whole foods, but find the prices ridiculously high and the service often surly. And then of course there's the Berkeley Bowl, but I personally find that overwhelming and end up buying stuff we don't really need. We have also joined a CSA (full belly farm), although not so much for reasons of economy. I make a menu every week and shop accordingly, which keeps me from making multiple trips and too much impulse buying. i also make lunch for my husband every day, which saves both money and time (his, not mine!), and is probably healthier. I wonder if it would also help to keep a record for a month or two of actual expenses to see where the big outflows of money are. Good luck-- I am somewhat in awe that you could even compose an email, given that you have a toddler and infant twins... another sahm

I think you should have a professional look over your finances mainly because your math does not add up to me. Even w/ an approx 35% tax bracket, you should still have an income of around $80K. With my math it seems like you should be able to have things like cell phones, cable, a personal allowance for things like coffee, eating out etc. and still not need to dip into your savings. I don't know your specifics (but we're also a family of 5) let's just say monthly exp of $2500 mort, $800 health ins, $800 groceries, $50 cable, $75 cell phone, $50 phone, $600 health ins, $150 misc utilities, $600 personal spending, $200 household maint, and $300 car/home insurance equals $6125 x 12 = $73,500 You could stil throw in a gardener or housekeeper. Not factored in is property taxes but I think my other figures were either average or above average. Sometimes people purposefully declare the wrong withholding so they get a big check return at tax time which helps them cover this. Kids don't need clothes all the time but they could come out of the misc. personal spending budget meant for lunches/coffees or you could ask relatives for clothes on birthdays, holidays etc. Same with grown-ups. My in-laws typically give us gift cards during the holidays which helps tremendously. We use these sometimes all year for different places we frequent. Of course you'll want to make sure you keep your debt down and factor in for the occasional emergency but I think you could do it on your income. Going to the library for dvd's, cd's books etc is fine and will keep your house less cluttered. Hope this helps. I hope you find a nice balance because I think being so extreme and withholding those coffees/lunches when it is in your ability can become pretty miserable to most people. The new math

I would suggest that you create a family budget and track your expenditures in a program like Quicken to have a clear idea of where your money is being spent. There may be a lot of hidden expenses like fuel/commuting, gifts, vacations, holiday spending, travel, etc. You say your house is small but mortgage can vary by location, down payment, PMI, etc. answers to those questions are part of the equation as well. I'd only suggest getting a sitter (or joining a co-op) for the the sake of your marriage (I'm also a mom of 3 and know it can be a drain) and maybe cutting back the housekeeper to once a month (*if* you can live with a little dirt - with 3 kids, you have to just accept imperfection I think). Good luck! Jeannine

I could have written your post although we do have some of the items on your no list still & slightly higher salary. What was eye opening for me was to write down every single thing we spent money on for a few months - yes it was a huge pain but it was also very very enlightening (every thing!!). our biggest money pits were ''extras'' ranging from b-day gifts, other gifts, various house projects, and things I never thought would add up but did at the end of the month. I'm not saying do a ''budget'', just write it all down in a spreadsheet. Especially with grocery stuff. I find Trader Joes is a huge place for saving money. We now do most of our shopping there & fill in at other places. Really look at the grocery bill. I also wanted to say keep the house cleaner!! Looking forward to the responses. wondering where it all goes

Welcome to the ranks of SAHMs! I agree that you ought to be able to live on one salary of about $125K, especially given what you describe as measures taken to reduce expenses without dipping into savings. Four years ago I became a SAHM at the same time my husband went back to school full time (total salary went from $130K to zero). We rented, so we presumably paid much less for housing than you do. We lived on about $60K per year, paying primarily rent, utilities (phone, internet, garbage, water, gas, electric), groceries/diapers, and insurance (life, health, auto (one old car)). During each year. we also were able to give a few gifts, and gave about $2000 to church/other charities.

My advice: first, check to be sure that too much isn't being withheld for taxes (just don't go too low and end up paying a big penalty in April). Second, write down everything (and I mean everything) you spend for a few weeks to see where the money is going. It might be helpful to break out your categories into a fair amount of detail. For example: an incredible amount of our grocery bill was spent on beverages. If you drink alcohol, coffee, soda, or juice, it can really add up. When we didn't pay attention, we could easily spend over $100 per month on beverages. Third, you don't say what the commute/parking situation is like. Maybe there isn't anything you can do about it, but: a) are two cars necessary? b) is carpooling a possibility? or c) have you considered public transportation? Between gas prices, bridge tolls, and parking, public transportation becomes increasingly cost effective. In our case, it was much less expensive for my husband to ride BART than to drive to school and either pay for parking or risk have to drive around forever looking for a spot to park all day for free.

Finally, although I know you are trying to reduce your expenses, I've got to say that if you don't splurge in little ways every now and then, you may not be able to keep your sanity for long, especially if you are used to a different lifestyle. You two need to figure out how to make that work; just keep it reasonable. I was much better able to keep spending under control if I didn't feel like I had to deprive myself 100% of the time. In my case, ''fun money'' probably amounted to less than $10 per month on average, but it kept me sane. Anonymous

I'm in a very similar situation. It is very, very difficult to make ends meet. We have zero savings, and we have an equity line of credit that I dip into occasionally because it's better than a credit card. It sounds like you are thrifty already. I can think of just a few things to try, not knowing your situation completely. Adjust your husband's income tax withholding allowance to factor in the 2 more kids, so you'll get more take- home pay. We rec'd a large refund this year because we didn't get the allowance correct. Utilize flex spending with pre-tax dollars for medical and preschool expenses. Cut down on alcohol and ice cream. Change diapers only when necessary. Breast feed as much as you can because formula is expensive. Use coupons. Buy less organic food. Target and WalMart are cheaper than the grocery store for toiletries, cereal and things that you don't want to buy in CostCo bulk. Stock up when things go on sale. Entertain less, or ask people to bring things to help. Drive as little as possible. We are down to one car, and my husband uses casual carpool and public transportation. Research to find the cheapest insurances. It takes time, but it's worth it. Ask friends for kids hand-me-down clothes. Cut your kids' and husband's hair if you can. Get a hairstyle of your own that is low maintenance. Some things cost money up front but pay off later in energy savings - like a new refrigerator, insulating the attic, etc. Good luck. I look forward to hearing other's suggestions! anon

Have you considered a financial consultant? It seems like you make more than enough money to afford most of the things you have cut out of your budget, so I am wondering if the money is really going where you think it is. Could there be incidentals that you just don't realize you are spending money on? Have you written down everything you spend money on on a monthly basis? We are able to live really comfortably on just about what you make, and we have what I consider to be an outrageous house payment. It might be worth the cost in order to get an idea of exactly where your money is going each month. anon

Move to a less expensive part of the country, where $125 K will be just fine without cutting all those expenses! Your kids are young enough to move without disrupting their social lives. Remember that the cost of living is very high in CA, esp Bay area. There are many areas of the US which are far, far less expensive to live in. Think about it! anon

Hmm. Sounds like you're doing everything right. My family is in a similar situation. I save in all of the areas you do, although I don't have a housecleaner, cable TV is my sanity-saver! I found that it was the little things that seemed to cause us to go over-budget. Things like birthday presents, parking tickets, haircuts, etc. So now I try to plan ahead and be more creative with birthday presents to save money. I cut the kids' hair myself. I color my own hair. I try to walk or BART more than drive to avoid tickets. But there's only so much you can cut back on. Maybe it's OK to dip into savings if you come up with a long term plan to pay it back? Being able to stay home with your kids is worth it, I think. Another option might be to lose the 2nd car. Can your partner bike or take public transit to work? We reduced our phone bill by getting an internet phone ($25 month flat fee, all long distance included). I resell my kids' old clothes and toys if they are in good condition, in addition to buying them mostly used. We are vegetarians, cheaper and healthier than eating meat. It's kind of a pain, but I save money by grocery shopping at multiple stores. You didn't mention if you use a babysitter, but for nights out you could swap babysitting with another parent or join a co-op. I also save money with kid activities by buying an annual science museum membership. We get in free to Zeum, LHS, the Aquarium and lots of other local spots. Well, that's all I can think of! I'm looking forward to others' responses. -a fellow cheapskate

I'm sure impressed with all the things you've done to cut back- a lot of people would have considered many those things necessities. I'm into resource conservation from a philosophical as well as practical viewpoint, & I find being conservative very satisfying. Here are some things I do, maybe you'll find an idea or two: Water's expensive & I try to use only what's necessary. Many years ago I lived in an old farmhouse with no running water in the summer (the spring was full enough other seasons to gravity feed a house hand pump) so we walked uphill to the spring & carried it down in buckets- I got an early introduction to just how far you can make a little water go! -I wet my toothbrush along with the toothpaste, then the water's off til I rinse off the toothbrush & swish out my mouth (quickly). -When I hand wash dishes, I fill a small bowl with hot soapy water, turn the water right off, wash each cup, plate, etc., turn the water on to quickly rinse, but off if there are any rinsing delays (I have the kind of faucet with a little switch on it so I can turn it on & off without using the handles each time) I never just turn on the water & let it run while I organize the dishes or stop to chat. -I keep a plastic pitcher under the sink, catch the water that's running while I'm waiting for it to get hot for dishes, & use it to top up my dog's water bowl. -Last year I seriously pushed my garden on water, didn't water anything until its leaves showed a pre-limp dullness & watered most plants individually with deep hose soakings rather than turning on the overall irrigation system. I'm a horticulturist & was sure I knew what plants did & didn't need really regular water, but I was stunned at how many plants made it through the summer with either no water or only a few deep soaks. I let a few small things that weren't important to me kick the bucket & the larger plants didn't put on as much new growth as they would have with more water, but my water bill was down almost $50. a month from the previous year! Of course I'm doing the same this year. My one water indulgence is bathing- I love long showers and deep hot baths and my goal isn't to feel deprived of all pleasure. I'm really conservative with heat (but like a cooler & freshly aired house anyway) & don't turn on the heat unless it's really cold- I put on a cuddly fleece & warm socks instead. When it's on I'm most comfortable at 68F, but turn it up for company. I also do my best to turn off lights I'm not using, & my PG bill is way less than anyone I know. Anon

Transportation/gas? Is it feasible for your husband to get to work by public transit, bike, carpool, or walking? With the coast of gas (and tolls and parking, if applicable), that can be a chunk of money. Same for you - try to walk places when possible (I know, tough with three, but a double stroller + some kind of baby carrier can work). Are you paying babysitters? If so, consider joining a babysitting coop. Food - Eat less meat; join a CSA and/or shop at farmers market for vegetables; tea is often cheaper than coffee. What phone plan do you use? There may be a cheaper one, depending on your phone usage. Energy - if you can find the time, hang your laundry out to dry (toddler may like to help). Maximize available money: Check your husband's tax withholding. Your tax bracket has probably changed, so there may be too much withheld now. If you haven't already, check about having money withheld for a pre-tax Medical Care Spending Account, if available (but figure carefully, since you don't get extra back). There may also be a pre-tax transportation plan (if he switches to public transit). And don't let your relationship suffer - try to budget for some regular time with your husband - a cup of tea and a walk don't cost much. One-income mom

Why don't you move? Can your husband find a job elsewhere? The Bay Area is nice, but not worth living like you are suggesting. When moving from Europe, my husband and I were convinced that the Bay Area was the right place for us. It took just a short period of time for us to realize that the Bay Area that we left was not what we came back... We've moved to a sophisticated mountain town where the air is clean, commutes are ten minutes (30 if you want to work in the nearby big city down in the valley). Everyone who lives here is from CA or NY, so the conversation is interesting. There is some diversity (limited mostly to latino), but my group of close friends really wasn't that diverse in the Bay Area. Public schools are amazing and you can get 2500 to 3000 square feet for $600,000 to $800,000 (or you can pay a heck of a lot more, but the $600,000 neighborhood is actually one of the most desirable because of the young families). Just a thought. -found some place better

That is a toughie! Your mortgage/property tax must be high, yes? The only other things I can think of are -shop at trader joes--canned food and pasta and convenience-type-food (which I'm sure you could use) are much cheaper than at Safeway. -go to a non-touristic farmer's market towards the end of the morning when stuff is marked down to $1/lb for anything. -revisit your internet service and see if you can get a better deal there -if you are putting money into savings now, make sure that is not causing you to take out money you already have saved. anon

Try Consumer Credit Counselors (FREE!) to get you set up on a budget-they are very helpful and good luck. Money has been a challenge for my husband and I as well since kids, me working part time and the change in salary... think of the positives of being there for your kids our motto is poor but happy.... (keep repeating with smile...) oh yeah, what can you sell? broke too

Wow. Sounds like you need to put your finances on Quicken so you can track how you truly spend your money. If you already do this, I just can't tell you what to do except maybe sell your house & move somewhere cheaper. (and I'm not trying to sound nasty or facetious). Either you really don't see where your money goes or you have a massive mortgage/tax/insurance expense. I have twins and we live on $38,000 a year. We are debt-free except a student loan which is not a major expense. We DO have Netflix (our only form of luxury entertainment:), cell phones, no car payments but plenty of repairs('68 VW & '95 Escort Wagon). However we also have very little savings/IRA. We pay $1,100 per month in rent. We obviously could NEVER afford a mortgage in California. All in all, other than wishing I could feel a little financially safer in the future, wishing I could give my kids a Waldorf school education and wishing I could do what I wanted with my house, I am quite satisfied with our financial situation. I'd rather stay with my twins and pursue my creative pursuits which, of course, pay nothing. Enjoy that you can be with your children! Congratulations on your twins - exhausting but excitingly wonderful!! Not rich but content

Hmm, either your house payment is way high or I'm missing something. One thing to check is your husband's witholding. Now that you are on one income your tax situation may be much different and you might be able to get a few hundred more in takehome pay from his paycheck without screwing up your taxes. Check out the irs w4 calculator online. The only other thing I can think of is your food shopping habits might need adjustment. There is a wide spectrum from living off rice and beans all the way to prepackaged everything. Your food budget could be anywhere from $100 to $800 per month. If you haven't already done so, learn to cook stuff from scratch and reduce the percentage of expensive meats in your diet. You list most of the other things I can think of. You should be able to get your gas and electric bill under $150 total if you are in a 2 bedroom. Also while costco is great for diapers, it's really really easy to waste money there. Try to stock up on diapers at most once a month and avoid buying a bunch of other stuff there that you could live without. Frugal

Isn't this exactly what having savings is for? You are totally depriving yourselves when it is not necessary. live a little

Wow, it sounds like you're pretty bare-bones already. If you truly recently quit your job, as in during the current tax year, your husband may be withholding too much income tax. I know it from the opposite side - our tax burden went WAY up when my husband started working again after being home with the kids for three years. I mean, more than proportonally to our increased income. That's how the tax tables work. If you are reasonably mathy, you can figure out your projected tax burden using your anticipated gross income and mortgage, property tax and state tax deductions at Make sure you look into state income tax as well. I sincerely hope this helps you. anon

I've been thinking about your post for a few hours. Our situation isn't too far away from yours, but somehow we're doing it. Admittedly, we could be a LOT better in budgeting and tracking our finances, but the first step, I would think, is looking at where the money IS going, rather than concentrating on where it ISN'T. Then you can figure it out from there. But it is very hard to figure out how to cut the big, crucial expenses - mortgage/rent, insurance, utilities, transportation, etc. But kudos to you for doing what you are. In cutting back on our expenses, I was horrified to realize how the act of spending is soooo ingrained in our culture. We *don't* need new clothes every month, endless decorating items for our homes, daily expensive coffees, etc, etc. People can and do live on a lot less - even in the Bay Area... though I'm not sure how they do it either. Not Quite On the Edge...

I'll have to admit that my first thoughts on your post were in the realm of envy of your problem. I think my family is pretty average: two-income, both-parents- working-full-time family with combined income well under the six figure mark, living within our means, no debt except for mortgage, and we also manage to put aside a bit for retirement and kids college fund. We do a lot of the things that you mention (shopping at yard sales, most of the luxury reductions on your list) and in place of your house cleaner, we need full-time childcare.

But I digress. My suggestions are: 1) Read this book: Your Money or Your Life. It helps you to evaluate your priorities and your spending and the true cost of things. It's an easy read and puts things in perspective even if you don't do all of the exercises. It's not a new book so you should be able to find it in the library. 2) You must have either quite a mortgage, or quite a grocery bill, or there is something else (vacation? hair/nail salon? health club? gifts?) that was left off of your list. Something that could possibly be lowered. If you haven't done this already, you might try keeping a money diary or make a balance sheet (list income and expenditures) to find out where the gap is between your perceived and actual expense. 3) Your grocery bill could be much lower depending on where you shop and what you buy - it is much cheaper and healthier to cook simple meals from scratch and avoid buying prepared foods. I have found if you shop the perimeter of the grocery store (produce, dairy, meat, bread, etc) and avoid much of what is in the aisles (canned goods, cereals, crackers, snacks, mixes, frozen foods) it saves a LOT of money. If you have a very full pantry or freezer, try using it all up before refilling it. I know many people who could probably go for a month or two just buying fresh fruits/veggies/milk/eggs while using up what they have stockpiled. Costco does not necessarily save you money - evaluate each thing you buy there: a) is it really cheaper (then go for it, in moderation) and b) do you really need it (was it on your list or did you just think of it once you were already in the store?) 4) Check out a cloth diaper service - since you have three in diapers, it may save you quite a bit on diapers. 5) Are you paying too much for your car insurance? Once my car was more than about 5 years old, I only kept the part of the insurance that covered people/medical and liability (to pay for damage if I am at fault) and dropped the part of the insurance that would pay for repairs to my car. Review your policies carefully. anon

Yikes- isn't it a challenge? I just wanted you to know that we're riding in your same boat- it takes an astronomical amount of money, it seems, to live and to get by creatively in the Bay Area, even with a reasonable income like that!

We've done well with using all the strategies you mentioned, but to add a few: use coupons; look for free, fun activities like outdoor movies(since it's summer, there are always listings in the paper); go hiking and picnicking; use freecycle for recreational games and fun stuff you wouldn't be able to buy; read ''The Tightwad Gazette'' books from the library- there are lots of little strategies in there; we also share a car to cut back on maintenance/insurance/gas.

Know that you're not alone, anyway. It's a battle we fight everyday to stay on top of our spending. I'm looking forward to reading the responses you get. Good luck. Anonymous Fellow Scrimper

You sound like you are off to a good start. You will love being a stay at home mom. We also took a huge cut when I gave up my salary, but I am a teacher and we could have qualified for welfare. You are still in 6 figures! Whew! I was told to keep putting money into our retirement, but to cut it into half. I also sold some of my stocks to pay for health insurance. You can save money if you shop around for health insurance if you are all healthy. Our biggest payment was our mortgage and insurance. We decided to stop all home improvements until we both worked full time. If we needed day care , we used an in home day care provider who was more flexible with her hours. We only went on vacation to see relatives and for family reunions. We used Southwest if necessary. Costco is great, but sometimes the food goes to waste, so try to start eating out of your pantry. This sounds very Steinbeck, but you would be surprised how many meals you can come up with when you look in your pantry. Target can be your best friend when money is tight. Stay away from anything designer:sunglasses, purses, perfume, makeup, shoes, jeans. You can find great stuff at Target. Give yourself spa treatments and go to a Supercuts for a year, but don't let yourself go! Stop paying gym membership if you haven't already and start hiking instead. If you need anything Gymboree or Ralph Lauren, buy it on EBay, the styles are the same every year for kids, only the seasons change, so buy off season for the next year. Rather be at home than be rich.

It may be time to accept the obvious: If you are still needing to dip into savings each month after going through what appears to be a pretty spartan budget maybe you just can't afford to be a SAHM in the Bay Area. Your husband's salary would surely be sufficient almost anywhere else. It doesn't make you a failure. Housing costs are just too great here and it seems like you've already sacrificed a lot. I hope you are still putting money into retirement, because if you are not, you are underestimating the long-term cost of staying at home. numbercruncher

I found the book ''Your Money or Your Life'' really helpful for this issue. It's like trying to lose weight. You think you only ate 1500 calories, but didn't keep track of what you were really eating..... Are you writing down and keeping track of ABSOLUTELY every penny you spend? I mean you really have to write down every cent--.25 for a parking meter, .33 for a candy bar...for at least a month to see where your money is really going. I saved $300 the first month I did this. Usually it was stuff at the checkout line at the grocery. It just doesn't occur to you how all those quarters add up. Also you have to start saving for your daily needs and annual expenses (this used to get me in the red all the time) You have to estimate, say, that you spend $48 a year on shampoo then you have to make sure you have to save $4 every month to buy shampoo. This goes for everything in your house-- cleaning supplies, car maintenance, gifts, and make sure your monthly budget has 70 cents every month that will go for dish soap. We have a big family and have to save $45 every month to cover birthday gifts throughout the year. After a year, you will have no surprise expenses and will be easily living on liquid cash only. It seems like a long time, but after the first year, you are so happy! We saved $45K for a downpayment in 5 years this way. Also, give yourself an allowance, say $150 in cash on the first of each month to cover little things (no one needs to live without Peet's forever) then when it's gone, it's gone and you don't find you have to dip into savings when something you really need comes up. Try cooking ahead (See the book ''cook for a day, eat for a month'' and the ''single parent's resource guide'') so that you don't waste money on that bag of spinach you never got around to eating. That way, you only buy things you actually cook, and therefore eat. Food is our biggest expense. There may be some money or your life clubs in the area. It's very active online. cash only

Hi there, I started answering yesterday, but decided maybe I shouldn't. Well, here we go again. I'm a full-time plus working mom of 4 kids. Things have been hard for our family, and we've never made more than 70,000. Those were the good years . . . a long time ago. We have to survive on about $60,000. I work several jobs (60 hours a week - I'm highly educated - but in the wrong field: education), and my husband is disabled. Now we only have one child at home. The others are all college-educated: financial aid, working, their own loans. However, I can't even imagine what we could do with over a 100,000 a year! Amazing! To manage with your 'high income' (in my opinion), try Grocery Outlet for food - and good, cheap wine. Also, Trader Joe's and Monterey Market. Ross is good for clothes as are yard sales. Forget about a housekeeper. Exchange childcare for nights out - even weekends! Cafe Trieste has live music many nights a week. Go to Vik's for a cheap lunch, pack a picnic, join East Bay Parks = Lake Anza, etc. I guess I'm shocked that I'm so poor - I honestly didn't know! Soon to be out of health insurance - any great ideas for that??? A poor (I guess) but creative mom

You are doing wonderfully so far. Saving money comes in spurts with big ticket items (adjusting your insurance plans and deductibles, going down to one car, etc.) and then the rest of the time is based on controlling the flow of tiny chunks of change. A small leak can sink a ship. I recommend tracking all of your spending (every penny if you can) for 1 to 3 months. This way you will know how much you spend on what. The create a spending plan that works for you. Simple so you follow it! Track prices for things you buy a lot. For example, you might be able to cut your grocery budget by a large percentage if you know to buy a bulk amount of item X when it is on sale for $Y, because you know that is a low sale price. Honestly, the best reference that got me motivated and keeps me inspired in an entertained way is The Complete Tightwad Gazette by Amy Dacyczyn. If you like being online, there are tons of free frugal websites, many with forums. $125k really is doable in the Bay Area, but yes, with a family of 5, most would surprised at how tight a budget even that salary makes. in a similar boat

great start! go to the library and check out ''the tightwad gazette'' by amy dacyczyn. then, start keeping track of where the $ go. catagorize: food, utilities/mortgage, medical, entertainment, etc. add everything up and see where you can cut corners. can you shop around for cheaper insurance? higher deductible for lower monthly payment? got some possessions you can sell on ebay? (say, some of your old work wardrobe before it goes out of style, especially things you may not fit for a few years, or baby things as the twins outgrow them) are you buying ''convenience'' food at the grocery store out of habit? good luck! tightwad

Wow. I guess I'm a bit taken aback by your question because it sounds like you have already implemented a lot of sound cost-cutting measures, and yet even in the affluent Bay area it's still only a minority of households earning as much as you do, $125,000/yr, even with 3 kids. But I guess you probably know that many many families make do on much's just that it makes me wonder how we are able to have a car payment, cable, and a few other extras with a new second baby and household income roughly half of your size. Perhaps keeping track of all of your expenses, however minor, for a couple of months might help in determining where other chunks of money are going (unless you just have an unusually large house payment? are there other big purchases/student loans/expensive personal care services in there?). There's always the doing free activities approach (free days at Habitot and Bay area discovery museum, stroller walks, beach outings), but it sounds like your no-eating-out and secondhand clothing ideas would trim far more from your budget. Other things I do include consolidating trips to save on gas (which we buy at Costco), looking for quality used toys on BPN/secondhand stores, spending little on haircuts/personal care services, buying some items at TJs (eggs always 99 cents/dozen) and others at Berkeley bowl (produce), etc. But keeping track meticulously for awhile might provide some important clues you may be missing.... Making do on much less

Maybe keep track of all your expenses for 2-3 months, i.e. writing down every penny you spend as soon as you spend it. We did that for 2 months and were shocked at how much we spend on medical stuff (mostly co-pays for well-baby visits and prenatal care). We weren't able to cut down that expense, obviously, but at least now we have a better idea of where our money is going. Our other big expense is food, because we buy organic milk and produce. I was also surprised at how much we spend on the house and garden, e.g., water, gas, garbage service, minor repairs. Sometimes I think we could save more money if we were renting. I am actually not sure if you can live in this area and spend less than $100k a year. Good luck! Also struggling to make ends meet

First, I must compliment you on tightening your purse strings admirably. However, the fact is, it can be challenging for a family of five to live on a salary of 125K a year. My guess is that your take home pay per month is about 5-6K, of which about 3-4K goes to the mortgage, and the rest (about 2K) to household expenses. My suggestions: (1) Consider renting. You will spend half as much on rent, which will free up money for other things in life (which you have sacrificed). BTW, Have you changed your income tax witholding (to reflect your reduced income)? (2) Consider reducing retirement contributions. Your home pays you a dividend (by providing accommodation), and you build equity in it. So, consider reducing retirement contributions temporarily, so that you don't have to dip into savings. (3) Consider working part time. Each of these choices involve some personal tradeoffs which you are best positioned to make. Best wishes! Anon

Hi, I was interested to read about your problem. My family is in a similar situation to you and I consider frugality to be my hobby more for fun than out of necessity. I'm assuming that either your mortgage/taxes are just huge or that you have some large spending categories that you just aren't quite seeing. I second the motion to track all of your expenses down to the penny for a few weeks. I'd also like to recommend the Tightwad Gazette books by Amy Dacyzyn. You can check them out of the library (there are three of them) and they should give you tons of ideas both regular and alternative about how to save money. Good luck. It's hard for almost all of us to make end meet in the bay area. frugal sister

Wow. You certainly got a lot of sanctimonious responses to your post! I, too, wonder how people do it in the bay area. Our income is slightly higher than yours, and we still struggle. It's my opinion based on countless anecdotes from friends and others, that people who ''do it'' on less money have other resources they don't talk about. Small trust funds. Generous parents. An uncle that pays for preschool or private school. Down payments on houses gifted to them. Secure knowledge of inheritance down the road so retirement planning is not an issue. Parents who pay for vacations. Someone buys their wipes for them at Costco. Little extras here and there that just come down from the heavens. Who wouldn't feel bountiful living on a smaller amount of money in this situation? I'm not saying it's everyone, but I'm always amazed at how few people I know are truly, soley financially responsible for themselves. If you're feeling strapped, you are probably like us: paying for everything ourselves. Responsible for mortgage, retirement, college funds for the kids, preschool, the rare, rare vacation, etc... I don't have any advice for you, but I thought you might need to hear that you weren't alone after that barrage of posts. Living Slim

Wow! Another thread where people earning much more than the median income for the Bay Area complain that no-one can possibly be expected to live on such a small amount of money! Obviously someone is doing it. Our family of four gets by on less than $90,000, and contrary to what one poster wrote -- and what I've seen asserted in many postings over the years -- we do it without contributions from anyone besides my husband and me. Most of my friends are in the same situation. In addition to what the original poster wrote, our kids go to public schools and low-cost preschools, we take advantage of free programs at the libraries and parks, we don't buy a lot of processed food, and we try to sell all outgrown clothes and toys. In addition to providing tips for cutting costs, I hope this discussion will help BPNers in the upper income brackets remember that they actually are more fortunate than many other families in the community -- rather than leading them to assume that people with lower incomes have outside sources of revenue, which strikes me as, well, pretty insulting coming from a person who labels others ''sanctimonious'' for no reason that I can discern. Not Actually Poor

I really don't want to sound ''sanctimonious'' or preachy as people have indicated, (and I'm not trying to upset anyone - I was upset by this, so I had to share) but not being able to afford living here on $125,000??? Something's wrong. People not only support families on half as much, they support families on one third as much. Maybe you need to scale back your spending and differentiate between ''needs'' and ''wants'' - buy used cars, have a smaller house, but it really should not even be a question that $125,000 is enough to live on. I know there will be all sorts of high-income parents who are offended at this, but I actually find it offensive and demeaning to those of us who make one third that much money and are still managing to live (and no one is buying my wipes at Costco!) to insinuate that maybe $125,000 is not enough. living on much, much less

You already received advice I would also give, but it occurs to me that it sounds like you could use a supportive frugal parents group! Does anyone know if a parents group made up of families who need (or choose) to live frugally already exists in the area? I know I would be interested in participating in a group like that (even just a Yahoo Group), where discussion and support could be available to group members and group activities were all frugal ones. If anyone knows of one or is interested in forming one, please let me know. Nicola

I was really suprised by all of the initial responses. We earn 125k a year, and we don't really get by. Mortgage payment, car payment, preschool for two, insurance, one credit card balance still paying off, medical co-pays, groceries, clothing, vet. bills, property tax....we are tapped out by the end of the month. Not sure how all of these people are doing it on half, but we sure aren't. My suggestion is to increase your income. Its hard in the Bay Area! Same Boat

I agree with the poster who pointed out how so many people with less income probably do have resources that they are not taking into account (like parents who live in the area and provide free babysitting, meals). However, you got a LOT of responses with helpful info and encouragement and after re-reading them all I don't agree that any were ''sanctimonious''. Maybe a few were puzzled on how they could earn so much less and yet seemingly have more, but even they offered good suggestions. Anyway, my main reason for writing is to encourage you to not just cut down on spending overall, but to prioritize those things that really affect your quality of life. In our case, we don't watch much t.v. (us parents I mean) but it is a real sanity saver to have the PBS kids shows and TiVo. So we get the basic basic cable (about $10/mo for broadcast channels only). We go out to the movies only a few times/year; but we don't cut out movies entirely. As others have said, budget in a little for fun, if only for your sanity. You don't want to feel too deprived. Also, you should remember that this period you are in with babies and toddlers will only last a few years. When the twins start school your budget should change considerably. (Heck, it should change a lot once they get out of diapers!) Good luck! --frugal, but still splurge occaisionally

We're always spending more than we earn

Jan 2006

Help. We keep spending $1000-$5000 more per month than we're earning. We staying afloat by spending home equity and occaisional infusions of money given or borrowed from family. I keep trying to figure out where the money goes, how to separate necessary from extras, how to predict future costs. Part of my problem is that I just have no time make any headway and I have no financial skills at all. We don't have cable, I feel like we've cut out anything extra. I've read and done my best to implement the finincial advise in BPN archives. But, we just can't seem to manage on what we make. Someone suggested quicken software, but i don't know if I can carve out the time to figure it out even if we could shell out the money. Is there something online or in a library that's quick and EASY to read for a finincial dummy with very little power to focus. thanks in advance

I am curious to see what kind of responses you will get, as I also failed to live within out income last year. We overspent about $5000 more than we earned,,,,. I use quicken to keep track of it, but my problem is that I do not know exactly how to analyze it. I know where the money went, but cannot seem to figure out where to cut back.

So far for this year, I am trying to cut back grocery bills by planinng meals ahead of time and buying grocery only needed for those meals. I also try to sell things we do not use via and often am surprized to find so many people interested in my unwanted stuffs. I also asked my husband to cancel his YMCA membership, since he rarely goes but pays about $70 per month.

Sorry for not having some magical answers to your situation, but I just wanted to tell you that I struggle with the same issue every month,,,,. I am trying to stay within our budget,,,

Hi. I read your post and thought I'd respond. Check out this book ''How to get out of debt, stay out of debt, and live prosperously by Jerrold Mundis. Please read the book's review in this link:

You can check this book out at the library. Also, you might want to go check out this website:

I've found DA (debtors anonymous) to be very helpful over the years.

One thing I've learned is that my problems with money hardly ''happened'' to me overnight. It took years to get the way I am with money, and it took me years to heal from my unhealthy relationship with money, and I still have a long way to go.

Through DA, I know I'm learning how to continue to have a healthy, abundant relationship with money that I couldn't get by trying to ''budget'' my life to death.

Wishing you a life of abundane and prosperity Recovering compulsive spender, underearner

You can do it! All you need is a little bit of information and a lot of peer support. Join a monthly personal finance support group to help you set and reach the goals you want ($25/month and 1-1/2 hours/month). Also, purchase ''Living on a Budget and Loving It!'' for $35. It's a CD with audio seminar and spreadsheets. For more info, email me or see my web sites, and All the best, Lindy Sinclair

Since we've just transitioned from being a two-income couple with kids to being a one student couple with kids we have been working on getting organized about our spending. Things that have been helpful so far -

1. All Your Worth - The Ultimate Lifetime Money Plan by Elizabeth Warren and Amelia Warren Tyagi. Got it used for cheap on Amazon. Lots of worksheets and practical advice. I especially like the fact that they focus on dealing with the big picture, instead of every tiny transaction. They don't really address charitable giving as part of your financial planning, which I think is unfortunate.

2. We did buy Quicken, although we are just getting it all set up. I've thought about this for awhile (my Mom has used it for years) but couldn't stand the idea of inputting every receipt into the computer. These days you can download straight from your bank statements, credit cards, etc. which is what made me finally get it.

3. We're writing a budget on an Excel spreadsheet (which presumably we will then import into Quicken to track how we are doing). I took the last three months of spending, input it, and broke it into categories, to see where it all goes. Then we could try adding and subtracting from various categories and see immediately how it would change the bottom line. It took about two hours work to set up the spreadsheet and input the info and it's been incredibly useful as we think about what to do going forward. We did this before we bought Quicken - presumably you could just start out with the program.

It's hard to find the time to do this stuff, and it is work, but we think it's worth the investment of time to come up with a plan. Then it will be easier to make decisions as they come up - should we buy this or that? should we cancel the cable? How much do we give to charity this year? how much do we put in retirement funds and the kids college fund? etc. - which should save us time later.

Good luck! Resolved to get better at it in 2006

I don't know any short, easy books, but I like any of Dave Ramsey's books. I ignore the Christian evangelizing--his financial advice is solid. And here is my short course:

1. Don't worry about figuring out where your money is going. You know you are spending $1,000-$5,000 a month too much.

2. Set up an automatic payment of 10% of your income that goes for the following (5% for retirement--preferrably in a 401(k) or a Roth IRA; 2% for emergency fund-- in a savings account until you have 6 months of living expenses; 2% for college for the kids-- in a 529 Plan; 1% furniture, new clothes, etc.--in a savings account).

3. Write a list of your monthly bills in order of importance (rent/mortgage; groceries; utilities; phone; medical, 1st car payment, etc.). List how much each of these items costs. and then add up the list starting at the most important bill and adding the next important until it adds up to your total net income (what you bring home minus the 10% that is going to your automatic savings plan outlined in step 2). Then you MUST eliminate everything else on the list which might include things like cable TV, eating out, new clothes, 2nd car payment.

4. Get rid of any credit cards, but continue to pay them off-- you have to. If you have a staggering amount of debt (you can't pay the minimums and pay for your basic living expenses) talk to a financial counselor. Not one of those credit help places, but a real financial counselor with a CFP--yes, it will cost money, but you need to do it.

5. Once you have steps 1-4 in place you can start to learn about investing. DON'T WORRY ABOUT THIS NOW. If you need to open up a Roth IRA (per step 2) talk to Vanguard or T.Rowe Price about no- load mutual funds. Don't get hung up about which mutual fund just make sure you are putting something in there every month.

Finally, there is no quick fix. Also, don't skip Step 2. This is the step that will ensure you are never in this situation again. Finally, if you need to use your emergency fund (as you probably will if the car breaks down) go ahead. Don't use a credit card no matter what and replenish the emergency fund. You can do it!

''Your Money or Your Life'' by Joe Dominguez/Vicky Robin is a fantastic book that is a pretty easy read, and gives some good practical guidance on how to make your own decisions around necessities/luxuries without being judgmental. My husband I both read it and felt it was immensely helpful for us to start getting it together, and when we finally got one, our financial planner knew of the book and was pleased that we'd read it. I highly reacommend it - it's a must read for financial planning of any kind. amy

You can do this yourself. The only requirement is disciplined mindset, so work on that first if you don't naturally have it. Get yourself a little memobook for 75 cents and a pen. Record each day what you spent cash on. (This is your most important step. It will show you just how much $ you waste on spontaneous items like a coffee with muffin on work days $3x5x4=$60 per month). Record each paid check in your checkbook. Collect credit card receipts and check them off on the monthly statement. Another big change is that you sit down and list all irregular bills (not monthly), which include insurance payments, property tax, car maintenance budget and divide the whole thing by 12. This amount of money (for our thrifty household it is about $660)you need to have transferred from your checking account into another account at the beginning of each month every month. It is not your money and it is definitely not your savings (and don't keep any other money in it) - it is a big pot from which these bills are paid when they are due, so these bills don't throw you off when they arrive. Just doing that, you'll take a lot of stress out of the guess work of what is your money to spend versus money to pay out. Buy your clothes second-hand. Rent your movies for $1. Get books from the library. Also, don't carry balances on your credit cards. You can only use them, if you can pay them off at the end of each month. That also means that you can't just put a whole vacation on a credit card because you feel you should be going somewhere. You can only spend what you have truly leftover and that means saying ''no'' to a lot of things. Maybe you can just afford camping with the family locally rather than flying someplace and booking a hotel. Money is pure and simple elementary school addition and subtraction. Eliminate the guess work and the emotion (got to have this or that) and you're on your way. In a few months you will become familiar with the numbers and will be able to write a monthly budget and stick to it. Anonymous

You NEED to listen to Dave Ramsey! He has a radio program offering very good financial advice for regular people. I don't think it's on the radio in the bay area, but you can listen to it online at the web site. He's a bit of a bible-thumper, but if you can get beyond that, his advice is excellent and he will motivate you and inspire you to get your finances in order and manage your money for the future. He has written a book called the ''Total Money Makeover''. Buy it or check it out from the library. With a few simple changes (start with a written budget) you CAN find a way to make things work. You don't need a degree in finance, but it does require effort and you have to make time for it. Good can do it!! anon

Just a few minutes every day can get you on track. Try this: keep a journal for one month. Write down everything you spend - every penny. It helps to keep a little notebook in your purse & write down expenditures as they occur. At then end of every day review your list to be sure you've included everything (otherwise you will forget). Write down the amount spent & give it a category. For example: PG, phone, EBMUD, garbage, food, dry cleaning, entertainment, medical, gas, mortgage, insurance etc. At the end of the month, sum up each category. This will give a good picture of where all the money is going. Next thing to do is budget. Obviously what's going out shouldno?=t be more than whato?=s coming in. Don't forget to figure in the bills that aren't paid monthly: home and car insurance, property taxes, car maintenance, etc. Estimate what these cost per year, and divide by 12 to get what you should be saving each month for them. Look for ways to reduce your costs. What size garbage bin do you have? Can you go down one size? See the PG website for ways to reduce your gas and electricity bill. Grocery shop once a week instead of every day or two. Clip coupons. Buy store brands. Stock up on staples only when they are on sale. Are you getting gas at the cheapest spot in town? (Stations at San Pablo & Camilia or Hopkins & MLK are lowest I've seen in NB). Have you comparison shopped for insurance? Having the same carrier for car & home can reduce your rates. Can you increase your deductible or reduce coverage? You don't mention credit card debt. If you have some, try and find a way to pay more that the minimum payment every month. If all you pay is the minimum it could take you 25 years to pay it all off (depending on the amount). Spending an excess of $5000 a month is a LOT. Is your mortgage so high? Maybe you need to downsize your house. If you want an easy book to read to help motivate & direct you try Suze Orman's 9 Steps to Financial Freedom. $4 used on Amazon, or free at the library. Good luck! Remember that even though you feel overwhelmed you are taking the right steps to make a better life for yourself & your family. You've already started! Good job! been there

On managing money - This is an ongoing quest - like laundry - it is something we have to constantly keep on top of. No easy fix. The best we ever did on this subject was to take the ''How to budget'' class from consumer credit counselling. the class is free. the work to reign in the spending is serious. you start by tracking spending (a computer software program like Quiken helps with that). tracking makes one more aware of where the money goes. then you creat a budget based on what you have historically spent on items taken from the tracking you have done. the magic happens when you see all together. you can start adjusting various items and really see where belt tighting can happen effectively. good luck, evelyn

Making it work in the Bay Area with 2 kids

Sept 2005

We are most probably leaving the bay area but in a last ditch effort to figure out a way to stay, I put this question to you: How do you make it work with 2 kids if you don't have one of these things:
1. enough money/earning capacity so that one person can work part time (or not at all) or you can hire extensive help to get kids dropped off, picked up and taken care of when you are both working full time
2. one person with a flexible work situation so they can do the above
3. family in the area that can help you do the above

I struggle with this a lot because while I love many things about living here, have a nice community of friends and acquaintances, am pretty connected professionally (albeit in a low-paying profession), the thought of having 2 kids and figuring it out so I'm able to live here without feeling like I'm frazzled and running around all of the time (I often feel like that now and I have one kid and work part time!) and I'm able to spend quality time with my kids, seems incomprehensible. There are many other issues such as being able to generally keep up our standard of living, the school issue, and outgrowing our house, that are pushing us out of the Bay Area, but the intial question I asked is most puzzling. How do you do it? anon

how do you do it? i don't know how other people will answer this, but my answer is that our family of four just does it. we live mainly on one income (and not a terribly large one) because we feel it's better for the whole family that one parent stay home with the kids. so we cram together in a small two-bedroom house, we own one aging car, we plan to use (and help to improve) our local public school, we watch our pennies, and we've completely given up any thought of maintaining our pre-kid standard of living. and you know what? it hasn't been easy, but i've never been happier. having one parent stay home has definitely lowered the stress level for the whole family. for us, the decision to live on one income was a matter of making deliberate choices about our priorities. you listed housing and standard of living issues at the end of your post as though they were secondary to your decision to keep working, but i suspect these are central to your feeling that you can't become a one-income family. so it seems that you are also prioritizing. i don't mean to suggest that it's wrong to prioritize these things, just to point out that it may be difficult for you to attain all of the things you seem to want (better schools, bigger house, unchanged standard of living) and at the same time meet all the daily responsibilities of caring for children, whether you fulfill these yourself or pay another person to do so. we made a choice and accepted some sacrifices, and doubtless you will need to do the same. sorry to ramble, you just hit a nerve. good luck with whatever you decide. happy at home

I don't blame you for leaving. It's a great area and there are a lot of merits to living here, but it's really hard if you don't have those conveniences to ease this kind of a hectic lifestyle. Sometimes I feel like everyone that I know either has one parent not working or working part-time/flex schedule, family nearby helping, and/or some kind of a trust fund/unlimited income to spend on all kinds of help. And it makes me feel envious and then sometimes depressed.

My only advice (and it may have already crossed your mind but I have been thinking about it strongly myself) is to seriously consider two questions: 1.) Are there ways to cut down your expenses further? In other words, do you really need every single thing that your spending on? 2.) Do you really need to have a 2nd child?

I know these are harsh questions, but these are the only ways that I have been able to survive here. I basically never go shopping -- our clothes are very old, gifts, or used. We minimize the use of babysitting and keep our dates to the cheapest possibilities (i.e. co-op babysitting and going out on picnics, etc.).

And, I agonized over why I would really want a 2nd child when we are as strapped as we are. I love the idea of a sibling for our daughter, but it could be the straw that would break the camel's back in our family. I often feel the pressure to have more kids and while it's romantic in so many ways to me, it's a reality that could put enough stress on my marriage to put us over the edge.

I'm sorry to sound so negative. But, sometimes I feel like one has to be real about their limitations. My advice is for the sake of your marriage and family, do what you have to do to ease the burdens in your life - that could be moving or any other number of things. Don't get caught up in the hype of this lifestyle just because so many others do. Strapped in the Bay Area Too

This is such a loaded question, because everyone's definition of making it so very different. That said, here's what we do, on one income, with two kids.
1)\twe rent 2)\twe don't go out to eat or have takeout every week. At most, two or three times a month 3)\twe rent in a place where we can send our kids to public school (when the time comes, and it has come for our older child) 4)\twe buy clothes at Target, consignment stores, thrift stores, and if we have gift money 5)\twe get most of our food from Trader Joe's, Monterey Market, and Costco 6)\twe have a Costco membership, which helps us on basics, gas, and infant supplies 7)\twe have memberships to 1 art museum, 1 science museum, 1 zoo, and use those as our during-the-week or weekend activities. We go to a lot of parks, and see friends on playdates or at each others' homes 8)\tthe place we live is small, we can't change that, and so our kids share a room. We try to keep unnecessary stuff to a minimum, and do our best with the help of IKEA furniture to live well in a small space 9)\twe have one car. The one who works, bikes to work. We fill up our car at most two-three times a month. 10)\tThe job we do have affords us excellent health care, with dental and vision coverage, and allowed us to consider having kids in the first place. Our decision to stop with two was based on space, money, and patience of the stay-at-home-parent considerations.
We do not expect to stay in the Bay Area forever. We keep applying to out-of-area jobs, and should one come through, we will take it. But we are enjoying our time here as best we can, and should we stay here long enough for both kids to be in school for full days, the other of us will probably start working, and will make long-term prospects for our staying here more likely. We have a great network of friends, our families like visiting us here, and there is plenty of fun to be had on weekends and days off.

Different things work for different families. I would recommend you sit down and try to figure out your non-negotiables about your way of life. Do you both have to work full time? Do you have to have x size of house? Do you have to eat out x times a month? What things are truly essential to your happiness and well-being? (these are tiny examples--I know that there are more important issues, too!) Figure that out, see what you have control over, and then you will be better-equipped to make your decision.

Good Luck Donna

I wish there was an answer to this question! We have, to some extent, all three of the things that you list as needing to have to stay: solid income, some flexibility, and some family support. It's still not an easy choice. We are about to get into a really big mortgage to buy access to decent public schools. I guess our recipie for staying is: have two jobs (one that provides some flexibility), be resolved to the fact that kids will be in school/daycare and not with parents most of the week, live with the fact that mealtimes during the week won't be homecooked, thrive on lots of activity, and - in work hard/play hard mode - dedicate weekends to enjoying the natural and cultural offerings of the area. However, if your family is able to get work elsewhere and you are willing to move, I bet that a slower pace of life awaits somewhere...and it's hard for me to imagine how that might feel and how great it might be. anon

Hi, I really relate to your dilemma. I love living in the Bay Area and my now two teenagers have thanked me for raising them here! My philosophy is to LIVE SIMPLY. I am a single mom who works half time raising two kids on $35,000 a year. We do not feel like we sacrifice, it is just easy for us to eat at home, do free things and not shop - it's all about priorities. This philosphy led to the work I do, which is about helping people simplify. PS, I don't own a house and it doesn't bother me, Also, when the children were small I was married and I stayed home with the kids, ie, no preschool. I hope this helps. And it is good to trust that if you are meant to be somewhere else, opportunity will arise for that. Good luck, Kaeleen

I am a SAHM. We have 2 kids. We don't pay school tuition. We have a huge mortgage (we bought a few years ago) so we still struggle regardless of my husband's 6 figure salary. We have one car and it's paid off. Our parents live in the Bay Area, otherwise we would seriously consider moving elsewhere. Maybe.

My husband travels a lot for work so he's had a chance to see how our life would be if we moved to those places (Denver, Phoenix, Salt Lake City, Portland, among others). He has also lived a lot of different places in his life and this is by far the best place he's ever lived. When he travels and comes home he gets a constant reminder of how lucky we are.

As for me, I was born and raised in the Bay Area. It is my home.

Financially we could probably be better off if we cashed out and moved elsewhere, but I doubt we'd be as well off emotionally. A few years ago we tried living somewhere else for financial reasons and we came back as soon as we could. We'd rather be broke than depressed. Working it Out

1) Childcare -- this gets much easier as the children get older. I only have one, and have been relying on the JCC. Programs like this have longer hours, and when your children transition to school, they can continue in the program which is good for both you and the child. The first 2 to 3 years are really hard unless you have the money for a nanny because most programs don't have a full-day option. For practical advice, and information about home providers, BANANAS is the place to go.

2) Housing -- we live in a small(1100 sq.ft.) house, and I comfort myself with the knowlege that when these houses were built people (including my child's kindergarten teacher) raised large families in them. Lots of big house problems (illicit internet use, not know what's going on with your kids) can't happen in a little house.

3) Sometimes you have friends you can trade off with -- it's not like a family member who can (if you are lucky) step in and take over a pick-up, but it does help.

4) I'm not really sure that the equation is that much better elsewhere if you already have a house. In my field and my husband's salaries are lower in other states. Carol

Oh how I feel you! First, know that you are NOT ALONE. I'm sure you'll get a LOT of responses to your post. My husband and I have gone through a lot of the same questioning over the past year. And we've considered leaving the state for the same reasons. The challenges for us about leaving are (1) leaving our community, (2) that we can't figure out where we'd go, and (3) that places where the cost of living is lower (and there are many) also have lower incomes.

We both work for ourselves, my husband pretty much full-time (he is also a student) and myself 1/2-2/3 time, from home. We have a babysitter who is with our daughter and another child 4 mornings a week, and this is my work time. Afternoons, I am with our daughter and we usually go to the park or play with another mom/kid. Sharing a babysitter helps us save money - the sitter earns more for two kids, but it comes up to be less for each of us parents. We have an apartment that is too small for the three of us, and which definitely won't work when we have another child in 1-2 years. So we are looking to move to a place that has an extra bedroom. That means higher rent, hopefully not more than $400 more than we pay now. Since buying a house here is virtually impossible without a small fortune (or at least the ability to pay a large mortgage every month - not our case) we are looking into the possibility of investing out of state in real estate, as a way of growing our money. There is only so much a person can earn from working, so we are looking into ways to invest wisely to grow the little money we have.

To answer your questions: We don't really have the capacity for one of us to work just part-time, and yet somehow we make it work. We don't have a second child yet, though, so who knows how that will look later on. I have a great relationship with another mom with a same-aged child, and we help each other out a lot. I have to go to a meeting, she watches my daugther and our kids play together. She has errands to run, I help her out in the same way. And it saves on childcare.

California is a hard place, because even though it's so hard to make ends meet here, it's also really hard to leave. We've gotten used to a certain standard of living here, and a certain standard of earning - I'm not sure how we'd get that elsewhere. But I know a LOT of people who have, and have done so successfully. I would move to Oregon in a heartbeat if it didn't rain so much... Good luck!

I sure wish I had the answer for you. I too share your pain! We have decided that we will leave the bay area next spring (after five years of being here) as we find the ''sacrifices'' are affecting the betterment of our family life and future financial situation. I recently returned to my part time job after having my second child. I joke with my husband that I should work full time and make more money as we have to pay so many people to care for our house (cleaning people) and children (nanny), oh and frequent take out!. Life here is no doubt the most ideal but you do pay a premium to live here. We too have no family close by which really cinched the deal to leave....although we have an incredible network of friends who are in the same boat, we figure the day to day family help takes a lot of pressure off the cost of living, work stress, family life stress, etc. I have a very flexible job that I hate to leave as I do not think I will find a better compromise to fulfill myself professionally and be present for my children whenever they need me, however, I pay a premium for childcare and private school in order me to get this ''fulfillment'' so in the end it is actually draining me financially- I do not want to work for free!

I think those who feel comfortable in staying are also comfortable with the sacrifices in order to live here. For example, housing- if you did not get in when prices were somewhat reasonable you must resort to owning maybe more than you can really afford (interest only loan) on paper or continue to rent without any equity accumulation. Secondly, childcare and school- there are plenty of options here but most quality and flexible childcare (with extended hours) is very pricy as well as private schools if you are not in a good district. Again, you have to choose and feel very comfortable with the fact that owning on the high end may mean contending with questionable public schools and maybe less than ideal childcare- Having said all this, you are tired and stressed (and perhaps worried if you are doing your family right). You could change your way of thinking and be an advocate to change your \xc2\x93not so decent public school\xc2\x94- like many of us, we just decide to go private- it is easier yes is it more money- of course!! Home prices through the tunnel are still expensive, although you do get more for your money and better schools but then you have to contend with long commutes (time away from children and family). Lastly, if you have a great extended family that lives close by, it seem the sacrifice is well worth it as you have people to ''pitch in'' for you when you need a break...not to mention you nor your family has to pay for airlines, travel time, time off from work to visit each other....

I am sure you have run all the scenarios and there will be some who say the sacrifice is worth it- it is all relative, yes there are some people who claim to raise their families here on less than $50K a year and maybe they are ''comfortable'' with that. One is not right or wrong but when it comes to what you feel is best for your family's well being- living appropriately within your means, without completely altering your standard of living, while balancing career and family, you may find that you are not ''giving up'' the bay area, but instead exchanging it for a peace of mind for yourself and family that you do not have to worry so much about your personal sacrifices or beliefs in order to support living here. Good luck to you.

I can totally empathize. We do have a decent enough household income so that I can stay home with two kids. My husband works for himself and helps out tremendously around the house and with the kids and I could not imagine if he had a 9-5 job. We have great caretakers, fantastic friends and love the Bay Area, but our families are not here, although we try to see them as much as possible. Money is not always the answer, but it would help your first two criteria, but having family around is priceless. We are probably moving because we want our kids to know their grandparents, aunts, uncles, and cousins. I\xc2\xb4ve made numerous lists with pros and cons. The pros to staying include...friends, climate, so many activities for kids, great produce year round, progressive politics, not much emphasis on religion, etc.. and the list goes on and on. The con side is a much shorter and the thing we keep coming back to is family, family, family. You get the picture. Good luck with your decision, it\xc2\xb4s a really hard one to make. anon

I was born and raised in the east bay. I went to college and grad school there. In between I lived in other states, and left after grad school to follow my Dh to grad school in another state (so have experience living in several other states/cities/towns). I always planned on returning to the Bay Area for all the reasons everyone mentions; climate, culture, politics, sensibility, etc. And my family is there. I too considered it the *best* place to raise kids. Well I have now been out of the Bay Area for 5 years, have had two kids, and dont think we will return. I have gained so much from living in other places - turns out, the Bay Area does NOT have it all. I have found a stronger feeling of community than I ever felt there, less pretension, more social consciousness (not waved as a badge of honor but enacted daily in small gestures). I have experienced less pressure to strive, be more, do more, and more enjoyment in being present in the day to day. Yes, having less stress (from lack of crowding, expense, having enough time) has a lot to do with it Im sure. And its not as if my community, Dh, or I are any less ambitious or intellectual (we just dont congratulate ourselves for it so much;) Point is, I was a die hard East Bay gal, and now feel like Ive got the better end of the stick in not going back. So maybe worry less about how to make it there and start reading up on various places around the country. thinking outside the box

Many of you have already posted replies to this topic, but I would like to add a cautionary tale -- along with some encouragement -- to the writer of ''Making it Work'' & other folks who are stressed out & thinking of leaving the Bay Area.

I'm a stay-at-home mom with a three-year-old daughter & we lived in Berkeley until we sold our place & moved last fall. We were stressed out for the same reasons as so many of you -- high cost of living, no family/support system, my husband's horrific commute to his job on the Peninsula, a fixer/money pit in a ''transitional'' neighborhood, fear of our daughter being assigned to a mediocre school (Rosa Parks has had problems & was one of our three possibilities), problems with neighbors & so on.

When my husband got a job in Santa Rosa, we decided to sell & buy a place along the lovely, (comparatively) affordable & more laid-back Russian River. Then my husband got laid off. After running through all our savings & racking up mucho credit card debt, he finally took a job in Mountain View & rents a room so he can stay out there during the week. And he's still making the same salary that we were barely able to live on before. Luckily, we were able to rent out our downstairs to cover most of his rent (the blessings of trading up), but we're still struggling.

We love where we live, have always been strongly attracted to this area, & don't regret moving. Although my husband works in a highly specialized field, the job market around here is fairly decent & I plan to start working again now that my daughter is starting pre-school.

But the fact is: We jumped at the opportunity to move to a more affordable & laid back area and thought it would solve all of our problems & alleviate our stress. And that definitely NOT been the case.

If you don't really love the area to which you're thinking of moving, it may not be worth it. And in my humble opinion, a close network of friends -- like the one you mention having -- is more important than just about ANYthing (assuming that you have a roof over your head, food on the table, & can keep the lights on).

We have a wonderful group of friends, but they're scattered all over the Bay Area. If they had been concentrated in a single place, it would have heavily influenced our decisions concerning where to live, because -- amongst other reasons (including fun & maintaining sanity) -- being able to provide an emergency number to your child's school is a really nice feeling. The couple of close friends we made during our time in Berkeley are so dear to us that we still visit with them two or three times per month. You can be happy without a lot of things, but without your friends, life can really suck. I'm incredibly extraverted & find that it STILL takes a rather long time to build real friendships.

I think it's stressful EVERYwhere these days. My husband & I have looked into relocating to other areas of the country & also have friends and family all along both coasts, in the south & in the midwest. Things seem to be hard everywhere Also, I looked at that Best Places to Live site ( that ranks large, mid-sized & small metropolitan areas across the country based on categories like Housing, Economy, Education, Culture, Recreation, Stress, Crime, etc. ... and hardly any places got good grades (i.e. B or above) for the housing OR economy categories, let alone in both. Cheap housing doesn't matter if you can't get a job to pay for it.

And pretty much ANY area that has even a remotely Bay-Arean feel (i.e. near universities, cultural amenities, fun stuff for kids, good grocery stores, educated & liberal people, tolerant, etc.)is probably as expensive in relation to the local job-base as Berkeley/Oakland. Even the relatively cool midwestern cities like Ann Arbor MI have gotten out of control.

I guess I'm just saying ... hang in there! If you're generally happy in the East Bay and have close friends & good acquaintances in the area, you can find a way for things to work. Things get easier & you have more options for just about everything when young children get to school age. I mean, you're not just struggling with finances & urban stress, you're also struggling with the trials & tribulations of young childhood (Just this afternoon, I curled up in fetal position on the bathroom floor & locked the door as I cowered from the shrill, evil little voice demanding candy 100 times per hour). You're not alone. You WILL get through all of this. I don't know how, because I'm still going through it. But I know people who have survived. When I ask them how they survived, they do not remember the details. Perhaps that's one of the few mercies provided to us mothers of young ones -- that we will not remember the utter misery. When I'm going crazy, I often try to remember that the things my daughter does to me -- including sleep deprivation, frequent & unpredictable infliction of physical pain (flying knee-drops onto one's chest & stomach are not as cute at age 3 as they are at 12 months), & constant subjection to loud, high-pitched noises -- are prohibited by the Geneva Conventions. Yet, I still have not reported her.

And if you do decide that moving away would be the best thing for your family, do as much research as you can & go to the area as often as you can afford to & make sure it's a place in which you can find contentment & find new friends. Cheers. Lisa

I read the post and responses on this one with great interest. We are a single income family with two children, and for several years we were scraping by in Oakland with the bare minimum on everything. My son was ready for kindergarten this year, and we simply could not afford private school tuition, even with financial aid. On the other hand, it would break our hearts to send him to the local elementary school in Oakland. We tried open enrollment and did not get into any of the good schools. Although some parents say that you can usually get in if you wait until the beginning of the school year, I couldn't stand the thought that he might end up at Parker after all. So that was the last straw for us. We could accept not eating out, not buying new clothes, not going on dates, living in a tiny house in a bad neighborhood, driving crappy old cars, not having cable television, and on and on.

What we could NOT accept was that fact that our children would recieve a substandard education simply because of our financial situation. In my experience, a decent public education is available only to the wealthy in Oakland. Our solution - I asked my company to transfer me to Denver. In fact, I posted for advice this summer when we weren't yet sure if we were moving - thanks to everyone who encouraged us to go for it.

Here are the good things about moving:
-We bought a house in a small suburb outside Denver for $110k less than our house in Oakland sold for, and it is over twice as big as our old house.
-My son goes to the local elementary school four blocks away and LOVES it. His teacher is wonderful, the school has a music teacher, art teacher, a PE teacher, and a very active parent association.
-We are paying $200 less per month for preschool for our younger child than we were in Oakland.
-My commute is now 5 miles each way instead of 40, I can drop the kids off at school, get to work by 8:30, and still get home in time to cook dinner.
-Suddenly one income is enough to pay for everything. When we think back on the life we had in Oakland, we can't imagine what took us so long to get out. I just wanted to post our experience to show that there is life *outside* the Bay Area, for some people, a much better life.


Can't make it on 5 figure income

May 2005

Hi everyone,

We have three small children a moderate income and MASSIVE credit card debit. We are planning to pay it down but not right away. Within three years all of our children should be attending public schools and that will free up a lot of money. We have never been late with any payments and we've never defaulted. Now, all of a sudden, we sense a crisis approaching and it is affecting every aspect of our relationship. We don't have the time we thought we had to start paying off these debits.

This summer the big CC companies are raising their minimum (principal) payments by around 100% and there's no way that we will be able to keep up. (I know that really this is a good thing and will get people out of debit sooner than later but\x85) No lectures please. Our daily cold sweats and petty bickering is punishment enough. Even with a (low) six figure income we simple cannot afford daycare, preschool etc. How it happened? Three children, preschool, summer camp, braces etc.

The debit consolidation commercials on television these days with their worst case clients have nothing on us. Our debit is truly monstrous and we're renters! Are we the only family in this situation? I have never read about other people who owe in excess of 50k to plastic.

My husbands mother is willing to let us take some money out of one of her properties. The property involved is in a trust and we will eventually inherit it. It was recently appraised at 560k and has a 90k mortgage on it at 6%. Because the house is in a trust, my mother in law's income is the one that will be considered for any new mortgage. Her income is rather low. What kind of mortgage should we look for? What kind of mortgage should we avoid? Should we refinance? What's the going rate for this type of thing? Should we get a 2nd mortgage?

Thank you for listening; any advice would be greatly appreciated. anon

Random comments on your situation:

1) in your situation, with a six figure income, I doubt you'll get much sympathy from the BPN community. Six figures is more than moderate.

2) your husband's mother must be a little crazy if she is willing to lend you 50 big ones.

3) there's got to be more to your story than just daycare, preschool, summer camp, braces, etc.

4) I have a friend who had 2 kids, a stay at home spouse, a mortgage, and over $60k in credit card debt. Got out of it in under a year by cutting way back on home expenses and refinancing the mortgage.

5) probably the easiest and cheapest solution for all parties is for your crazy mother in law to get a home equity loan. Rates for such loans are usually lower than a first or second mortgage. Plus she gets the benefit of deducting the interest. Plus she better charge you interest, too. Rates are going up, don't know if her 6% loan is fixed or floating. But the home equity route most likely better than doing a refi or getting a second.

Hi - Why don't you get an equity line on either your house (if you own) or your mother's? If the house is worth $560k you should be able to get an equity line of at least $200k. The payments will be interest only (ie very low) and you can consolidate all debt into one low payment. When you're more financially able, you can begin to pay down principal or just refi the entire mortgage and pay it off.

Just an idea. Julie

ps - You are not the only family with $50k++++ in credit card debt. How do you think all these families are affording these insane real estate prices?? No one talks about it but you are certainly NOT alone or the worst case out there! Julie

I read your post aloud to my husband because it chilled me to the bone. Since the day after our second child's birth (which is now almost three years ago), we've gone back and forth about whether or not to have a third child; and the discussion always founders on the question ''how on earth could we afford it, even with our 'moderate' six-figure income?''

His response to your question of whether or not to get a second mortgage was ABSOLUTLEY. Rates on adjustable mortgages are very good right now; you can try ELoan to get a ballpark figure (and then talk to a couple of different mortgage brokers and you may be able to get an even better rate). Do whatever necessary to get out of credit card debt; and once you're able to do that, cut up your cards and establish a firm monthly budget for personal spending, kids' spending, even camps and orthodontic payments. It may seem draconian to think of putting your kids on budgets, as it were, but how else can you avoid digging yourself back into a future hole, which will impact your ability to put three kids through college?

If necessary--and while you still can--might you declare bankruptcy? You would want to consider how this might affect your future ability to get loans, but it could be an option.

I feel for you, and I wish you the very best luck. Middle-Class and On a Budget

In response to the poster that said that you would get no sympathy, a six figure income is more than moderate and there is no way to get into so much debt with daycare, preschool, braces, etc....I would like you to know you have MY sympathy! I actually think that a six figure income, depending on your mortgage, IS moderate in the Bay Area right now. We got into 25k credit card debt over the last two years with no wild spending...just insane cost of living, property tax, etc. MANY of the people I see living life in California are doing it in part on credit and are overextended. SO I totally understand how you got there, I sympathize (as, I think, do many of the BPN readers) and I don't think that a relative willing to help is ''crazy''! Take the help! Or refinance-we did and are trying to get a handle on how to live in this crazy state!

Good Luck!! Been there (kind of still am)

In response to the woman with 3 kids & a low-six-figure income & $50K in debt ... This is kind of a long posting, so i wanted to first provide a quick summary:

1. You can get out of the fix you're in. Please stop beating yourself up about this.

2. Talk to East Bay Credit Counseling ( -- they can help!

3. Please don't do the second mortgage!

FIRST -- You & your husband need to stop beating yourselves (& each other) up about this. It's hard to focus on the finances -- or ANYthing -- with three young children around. Lots of people have gotten themselves out of similar situations & I know that you can too. 20 years from now, you, your husband & your kids will remember all of your special times together & how cute the kids were -- not some stupid credit card balance.

I also found one of the responses to your posting to be extremely mean & judgemental. This is a community & we all make mistakes & should not withhold sympathy from people because they make more money than we do.

A low-six-figure income does seem like a lot of money, but it doesn't go as far as you would think. Especially with three kids. When you make $90-$120K, a huge amount gets taken out in taxes & you don't wind up taking home much of it. You make too much to receive any assistance with high-ticket necessities like housing, medical care, food, daycare, etc. & yet not quite enough to manage comfortably. Also, families who've moved into their homes within the past five years (whether they rent or own) are paying a much higher percentage of their take-home pay towards their rent or mortgage than folks who signed their (rent-controlled) leases or bought their places before the current boom.

In any case, it's not how much you earn, it's how much you're able to keep. If you have a rent-controlled apartment from 10 years ago, a strong support network, a fairly stable job in an industry that doesn't frequently lay people off, a short commute & excellent organizational & household management skills, then you can live on a lot less money than parents who are paying today's housing prices, have no relatives nearby, work in unstable fields like high-tech (where you make $100K one year & get laid off the next), have long commutes, & who have trouble staying organized.

SECOND -- Please call East Bay Consumer Credit Counseling Services right away & make an appointment. You can go to their Web site ( to find the office nearest you. They'll negotiate with your creditors & consolidate your payments into a smaller & more manageable monthly sum, which would immediately reduce your stress. It's free & I know people who've used these credit counseling services, were very happy with them, have good credit ratings & are in good financial health.

So what's the catch? These non-profit credit counseling services get a lot of their funding from the credit card companies (who would rather that folks pay something rather than default) & they do require their clients to stop using their credit cards until the debts are paid off. Some people also say that you'll wind up paying more interest over a longer period of time with a credit counseling service, but I don't think this is necessarily true. There are a couple of postings about credit counseling services & debt consolidation on the site at: I really feel these people can help you.

THIRDLY -- DON'T TAKE OUT A SECOND MORTGAGE! It's awfully nice of your in-laws to offer help, but please don't do it. You & your husband are already fighting & the last thing you need is having his parents involved. Also, this is your inheritance & your ace in the hole: Eventually you'll be able to move in, or sell it for the downpayment on another house. So you'll want to keep it intact! Besides, home equity loan rates aren't as low these days as they were. Since you don't have to save for the downpayment on a house like many folks do, pretend that the payments towards your debt is a downpayment. In a way, it is -- it's a downpayment on a debt-free life.

Good luck! -- Been there, done that.

In response to the poster that said that you would get no sympathy, a six figure income is more than moderate and there is no way to get into so much debt with daycare, preschool, braces, etc....I would like you to know you have MY sympathy! I actually think that a six figure income, depending on your mortgage, IS moderate in the Bay Area right now. We got into 25k credit card debt over the last two years with no wild spending...just insane cost of living, property tax, etc. MANY of the people I see living life in California are doing it in part on credit and are overextended. SO I totally understand how you got there, I sympathize (as, I think, do many of the BPN readers) and I don't think that a relative willing to help is ''crazy''! Take the help! Or refinance-we did and are trying to get a handle on how to live in this crazy state! Good Luck!! Been there (kind of still am)

How to deal with money shortfall

August 2004

Hi. I am looking for advice on places to shop to buy the daily essentials as cheap as possible. It looks like I am getting laid off and I am currently pregnant with my second. After looking at our finances we are looking at about $400 bucks a month to live on for a family of four. That is for food, gas, diapers, incidentals. Bacially I feel like we are screwed, but I am trying to stay positive. I know about Costco, Trader Joe's, but does anyone have any advice on where else to go? Is anyone else in the same situation? It seems like most of those I know around me don't seem to have any financial worries, or at least not this dire, but I don't know. Guess I am coming face to face with the joys of the Bay Area economy. Thanks. anon please

If you live in Berkeley, you can get very very affordable organic or no-spray produce via Farm Fresh Choice...I got two grocery bags for $20. They exist to make sure families have good food, and they have produce stands at several locations. Anon

There is a great coop at ST. Paul's Church in Oakland right off of grand. It is every Thursday at 10:00 am. You can get fruits, veggies and other things for great prices. Many elderly are there, but all are welcome. Good luck and keep staying positive. Anon

We live very economically in order to stay in the Bay Area. It is so expensive here! Quick suggestions I ! would make would be to try and keep track of what your current spending is. You might be amazed at how much you spend (and can therefore save) on the small things like cups of coffee or parking meter money. Once you have an idea of where your ''leaks'' are, try to decrease your spending there and come up with alternatives. If you eat out a lot, decrease that for awhile. When it comes to grocery shopping, I find I spend the least if I don't do all my shopping in one place. If I hit the sales at several stores and then stock up a bit, I spent a lot less overall than buying what I need at the moment I need it at whatever store I happen to be at. I keep track of the best prices on things we buy often. For non-food items, try buying used (garage sales and thrift stores are abundant around here). You might check out the library for books on frugal living. One well-known one is ! The Tightwad Gazette, which has lots of ideas on saving money/spending less (although you may want to ignore some of the funky ideas the author writes about). $400 sounds doable with some effort. Good luck! -N

Some tips you may find helpful.

Cheap and healthy places to buy food:
- Monterrey Market (fresh and organic produces -mostly outside, also ask for ''special'' bags of ''less fresh'' products).
- Berkeley Bowl (I find their fresh produces to be a little more expensive than Monterrey, but they have other stuff that is cheaper -e.g., prepared cous-cous boxes).
- Trader Joe's.

Places to buy cheap clothing (for kids and adults):
- Ross (but you need time to find the right stuff).
- Target.
- Old Navy.
- Salvation Army.

- Save on cable: use your local library resources. Berkeley Central Library has tons of videos and DVDs for kids and adults. Also, PBS has great programs, but sometimes at the ''wrong'' time - we just record and watch when convenient for us.
- Save on books by borrowing from your local library. Also, if you plan to buy a reference book, check it in the library and then buy the one that better fits your needs/taste.
- Movies: reduced prices at the 1pm and 4pm shows. Plus Landmark passes: reduced prices for movies.
- Free activites such as Street Fairs, Farmer's market, etc.
- Check the Bay Area Parents newspaper for free fun family activities.

- No gym fees. Walk in Tilden, Isabella Point, Berkeley Marina... Bike... Dance!!
- If you want a gym, the YMCA has lots of activities, it's great for families, and has daycare (but I still found myself not going enough to the gym to justify the expense!).

- Library shows for kids: songs, magicians, story times.
- Small fee shows at La Pena.
- Free activities at different East Bay Regional Parks.
- Habitot: for a fee you can get a membership that lets you borrow toys and parenting books.

Small houshold items:
- Ross.
- Big Lots.
- Target, Walmart, etc... during sale seasons.

House Maintance:
- Home Depot.
- Allis Ace Hardware (they always give you good advice on ways to fix things properly without spending a ton of money).

- Coop.
- Swaps.

- Big Lots and 99c stores.
- Paper Outlet (in San Pablo).

Used baby stuff, furniture, electronics.:
- BPN!!
- Craig's list.
- Ebay.

- No cell phone. Use answering machine and check messages often.
- Buy a prepaid cell phone so you can have one to use only during emergencies (Tracfone has good deals for people who sparingly use the phone). Give the phone number only to the people who really need to know it. Have the phone disconnected when not needed.

Drive an old car using your savings and take it to a good, honest mechanic.

And the most important thing: don't use your credit card... money is the most expensive thing to buy! Good luck! bargain hunter ;-)

You are not alone!! My husband and I combined make about 95k, we own a house in a not-so-fabulous neighborhood(amazingly worth about 450k) and have an 8 month old baby. Between our mortgage, day care expenses, student loan and car payments and other monthly bills we have about $540 a month left over for food, entertainment and incidentals. We bought a new car last year (to have a safe, reliable car for baby), but by no stretch of the imagination do we otherwise live extravagantly- I cancelled my gym membership, we don't have cable, we don't go on shopping sprees, we don't go on vacations, we have drastically reduced how often and where we go out to eat and we are still barely making ends meet. When big expenses come up (like car problems) we have to put it on the credit cards. And we have gotten a lot of fin! acial help from my husband's family- his grandmother gave us $150k for the down payment on our house. Without their help, we wouldn't even own this house. We just found out we're getting over $6000 back from the IRS, and that is the ONLY good financial news we've had in months- but, of course that's just going to go straight to reducing credit card debt and paying day care expenses in advance, so the cycle will begin again... Feeling you in Oakland

A friend of mine goes to the Grocery Outlet in Oakland to get grocery items for very cheap prices. good luck.

Usually, the two most expensive items in the budget are cars and housing. Can you get rid of a second car? Can you find a cheaper apartment or rent out a room? sunsol

My favorite money saving tip is the 5-6 day a week Chronicle subscription for $25/yr. (v. $18/mn for 7 days) It's supposed to be Wednesday - Sunday, but they've been giving us Mondays too...You save even if you go out an buy Tuesday's at the newstand every week. anon

Have you considered re-financing your mortgage? I just called our lender and asked for the ''no cost, no fee'' re-fi. We're switiching to an adjustable to save 1% on our interest rate because we're don't want to live in our current home for more than 5 years. But you may be able to get a lower payment, even with a 30 year fixed. Probably easier to qualify before you're laid off and/or have another dependent. Weigh this suggestion carefully with your future plans though.

What about your vehicle/s? We have one vehicle that we share for our family of 4. We have to coordinate what days my husband needs to get to work early and when I need to go shopping. Unnecessary vehicles are a liability and added cost. Check out the bus schedule.! sp; Walk when possible (skip the gym). Also, check around for better insurance rates. Read your car manual: you might be able to use a lower octane of gas and most likely do not need an oil change every 3000 miles. Call around for repair quotes.

Go through each bill as you receive it and ask...can I make due without cable, internet, cell, etc? If you must have it, see if you can find a lower rate or substitute. Call utility companies and see if your household income qualifies you for a lower rate. They also often have specials on energy-saving lightbulbs, low-flow toilets, rebates, etc. Do you have a place you can put up a clothing line?

Big Lots has the cheapest diapers I have found...stock up and cut down on the number of trips (saves gas). Make a list and go to thrift stores...on their discount days-it's can be fun for the kids too (toy section)! Scrutiniz! e clothes for stains, tears, etc and don't buy those. Try things on for size-no return policy. Sometimes you can get a dirty greasy item (like toys, not clothes) for really cheap and it's really awesome after it's cleaned. In general though, just buy what you really need. Train the kids to leave the toys at the store.

Get rid of stuff you don't need. Sell it on craigslist, ebay, consignment stores, etc.-whether it be small appliances, books, posters, furniture, etc. It costs to store it and is losing value while it sits there and will free up space for your new addition. Trade babysitting or offer babysitting for money.

Mostly, it takes the right mindset and lots of organization. The more you practice...the better you'll get at it. I've had to cut down spending since the 2nd baby and the loss of one income, but it turned out to be a blessing for us.! bsp; It's definitely a financial challenge. Best of luck to you and your family. marian

I remember when I was just out of grad school, being pregnant, unemployed and uninsured. I was lucky to get a job in time to secure some medical benefits, but money was TIGHT for a long time with just one income. Check out the Berkeley WIC (Women, Infants, Children) program. The subsidize infant milk, juice and regular milk to low income or those who qualify. If you're on unemployment, you can qualify.

WIC was a lifesaver for us back then. Do follow the previous advice and contact your phone and utility co. to get a reduced rate, based on your income. Don't rent/buy videos; check them out at the library. Save at thrift stores or trade/recycle clothes & toys w/ friends and relatives. Learn to use/eat what's in season or on sale. Fresh foods are generally cheaper than frozen meals, however, a $5 frozen pizza goes a long way in feeding a group of kids. Check out the newsletter ''Tightwad Gazette'' (or something like that).

There are tons of cultural events and museums in the bay area that offer ''free'' days, take advantage of them. We thought we would never climb out of our financial hole, but we did and you can, too! Signed, Been There

Family Budgeting on One Income

Nov 2003

How are you doing it on one income? I'd like to hear your recommendations for living well in the Bay Area. What is your favorite ''cheap'' thing to do with a child, as a family? And more specifically ...1) groceries - how to continue to eat organic, drink wine with dinner. I already shop farmer's markets, B.Bowl,Whole Foods, Trader Joe's. We only eat meat once a week, fish once a week 2) eating out - really good food, with a child (16 months)under $30.00 - once or twice a month 3) retail - I'm not a big shopper - already go to re-sale shops, Ross, etc. Any other ideas? and MOST IMPORTANT ... how to save money for that ''rainy day'' or for private school, if that becomes the best option for us. Thank you for your recommendations. Lisa

You might get a lot of advice on this, so I won't detail everything I've learned. Also, it sort of depends on what your 'one income' consists of: ours is less than 50K and we bought a house in the bay area four years ago (before I left my career). When we looked at our budget after I left work, our monthly food bill was over $900/month (for 2 people and a baby!) Generally, start thinking like a European, (or maybe like your grandmother). I have learned to use organic ingredients to make my own sauces, dressings, even BBQ sauce. I'll probably never buy a jar of Salsa again. My next project is to learn to bake. Wine is a must; Raley's has saved us time and again (%40-60). We invested in a big energy-efficient freezer which has helped me stock up on our orga! nic favorites when they go on sale (I once bought eight loaves of Alvarado Street bread at 1.09/ loaf). My mother-in-law is English and was shocked to find me using our clothes dryer one fine spring day: she figured that we have about eight months of the year with no worry of rain, why on earth would we waste all that sunshine?? Good luck, it isn't an easy adjustment.
Working harder than ever

My husband and I are raising our seven-year-old here in the Bay Area on one income. A previous poster made a good point when s/he wondered how large the one income in your case is -- it does make a difference. Ours is around $70,000, with occasional small supplements from freelance work.

I don't have tons of great advice, some of it in fact might seem obvious and mundane, but I can offer you a few observations in the hope that they might help.

We have a fixed amount that we are allowed to take out each week for cash expenditures (buying coffee, paying for occasional parking, etc.) In our case, it's $40. This amount does not cover bigger weekend entertainment items (movies on an occasional basis, for example, or dinner), but it does cover smaller recreational things (a trip to the pool or bowling).

No impulse spending. That is, no little trips to various stores (or on-line stores) just to see what might catch the eye. We go to stores when we need to buy something specific, and we try to limit ourselves to buying only that item.

We eat out at the most twice a week. Favorite places include the Sa Wooee (sp.) Thai Restaurant, Cafe Raj, and Christopher's Nothing Fancy Cafe, all in Albany. To entertain we often invite friends over for take-out and share the cost of the food. When my husband and I go out alone (not often), we eat good food, but we eat small amounts. A shared salad and a shared woodfire pizza at Beauregard's Bistro is actually a lot of food. In general restaurant portions are much larger than what we would prefer ordinarily. We also eat appetizers at places like Britt-Marie's. We have only one car (a 91 Honda, runs great) and I bike to work, thus saving us the $70+ per month of a parking pass or money for a bus pass. On rainy days I take the bus, but we save hundreds of dollars on parking, gas, insurance, etc. besides keeping me in shape :). Our son bikes to school with me, and then I go on to work. We only take the car out to go for big grocery trips, buying larger items, or to go on an outing. Low gas $$. Less stress, too. We will keep our car for at least another couple of years and then trade it for a five-year-old Honda (best repair records around -- the car is almost never in the shop).

I have a coffeemaker in my office and make Peet's coffee for myself; even with the expensive pound of Peet's, I still save by brewing my own. My colleagues like a cup now and then too. We buy clothes (for the adults) very infrequently. Clothes last a long time if they're relatively good quality. We also have very few pairs of shoes. In general I think some people overspend on clothing and make-up. I buy clothes at Ross, underwear and such at Target, my son's shoes at Payless, and an occasional splurge at a medium-range place (Lobelia in Berkeley is nice). I'm not a fashion plate, but hey -- in my line of work, I don't have to be.

We read the newspaper in the library or on-line. We don't buy books -- we put them on reserve in the library and wait for them. After the bills for the month are paid at the beginning of the month and $140/week is calculated for groceries and spending money, my husband socks away most of the remaining money in the savings account. That way it's simply not ''there'' in the checking account to spend. Removing money from the savings account requires an emergency.

Odd Lots on San Pablo is a great wine source. They have good advice and super prices.

We go to the El Cerrito and Berkeley Farmers' Markets for organic produce. I think they have better deals than the stores, and it's all in season and fresh. I buy whatever is cheap, too. Very little meat, but that's our preference. Peanut butter is very big at our house. We like it.

We clean our own house. It's not super-clean, but no one has called the Health Board yet... I also make my own salsa and sometimes my own bread (though I'm not convinced you save on that) and always my own muesli.

We trade off on babysitting with friends. Big bucks saved and psychological relief earned there.

Except for the aforementioned $40 per week, we know exactly how everything is spent in the household. When grocery bills or other items start to creep up, we have a pow-wow to discuss how to cut back (painful, because I'm the spendthrift in the house, but helpful).

One splurge: I belong to the Y. I figure big bucks are saved there on therapy ;). Last year we saved enough to go abroad. Good luck! thrifty is nifty

Freaking about money-a lack of

Dec 2002

I am sure a lot of people are in the same situation, but my husband and I are freaking out about money. We are lucky to both be employeed, but no raises in about 3 years, which is really starting to hurt since the cost of living has increased (property taxes, daycare, the like). I am thinking of trying to find a supplemental job, or something. We have thrown around the idea of moving, but I really don't want to. We just moved about 3 years ago from Seattle and I really don't want to uproot my life again if I can avoid it. Any creative ideas out there? I have to be honest I have been tempted by those scams out there, you know get paid to drive your car and the like. Pathetic I know, but that is how desparate things have become! Any ideas on how to find creative ways to help supplement our income would be heartily welcomed! Thank you. Anon please

I completely understand your situation! My husband was laid off this year and when he finally found work, it was at a big pay cut. My own job has seen pay cuts over the past three years, so I'm making less as well.

Here is what we've done to alleviate the situation. 1. I took a second 10-hour/week job. It doesn't pay very well, but it helps a little. It's just too bad I have to give up my Saturdays.

2. I buy everything used, and go to the Salvation Army for clothes.

3. Instead of throwing out or giving away old toys and books, I sell them on ebay on in garage sales.

4. We've had a lot of medical bills. I delay paying the bills as long as possible. When the creditors start calling, I explain the situation and ask for a reduction or payment plan. I've been successful in getting both.

5. No vacations or movies in a couple of years.

6. When the kids ask for toys, I explain the situation to them, that we have less money than before. My older child appears to understand.

7. And I vote! Hoping to get this recession-causing administration out of power :-)

P.S. Don't fall for those scams - you'll just lose more money.

Line dry your clothes. Buy clothes and shoes at garage sales. Buy household goods only when you NEED them - and at ThriftTown (cheaper than Goodwill) or garage sales. Eat less meat. Make a menu list and grocery list and but ONLY from the list. Use cloth instead of paper for menses and toliet. Stop using diapers - use EC (Elimination Communication). Don't make your own clothes - unless you can get fabric for pennies/yard, garage sales are your best bet. Go to garage sales at the end of the day for best deals. Write down EACH and EVERY thing you purchase. See where money is flowing through holes. Buy nothing prepackaged - make all your own. Well, sometimes I buy bread; it can be really hard to keep up with this family's demands for bread by baking only. :) Take the Tighwad Gazette out of the libary for more ideas. Kathy

Your choices are to earn more, or spend less (or both). I decided to take the latter route myself, to make it possible for me, as a single mom, to support myself and my son on a part time income. I highly recommend ''The Complete Tightwad Gazette'', by Amy Dacyczyn, as a source of ideas on how to cut spending while still living comfortably. The thing I like best about this book is Dacyczyn's attitude -- I've gone from feeling deprived that I can't spend as much as I want whenever I want, to feeling clever when I get the things I need for less. Some of her ideas are a bit extreme, but you don't have to do all of them -- just what works for you. Here are some of the things I've tried that work for me:

-- stock up on things when they go on sale. Dacyczyn recommends learning to recognize a good price by keeping a ''price book'' of the things you buy frequently. Personally, I've found that, even without a price book, just by paying attention to prices, I've gotten to the point where I know what's a good deal. For example, my favorite pasta sauce sells for $3.69/bottle when not on sale, but Safeway and Albertsons both frequently put it on sale for $2/bottle -- so now I wait for a sale and buy 10 jars at a time. I recently bought a ten pound bag of potatoes for $0.98 -- about 1/5 the price of loose potatoes not on sale. I've bought pasta on sale for as little as $0.25/pound -- when not on sale, it can be $1/pound or more. I buy the Long's store brand of diapers during their periodic ''buy one get one free'' sales -- at about 10 cents per diaper, vs. 25 cents for name brands. This approach is saving me HUNDREDS of dollars a month, and it's not even that much extra effort.

-- try the store brand -- it's just fine for some items -- especially single ingredient items like sugar, flour, oatmeal, etc.

-- I asked Victoria's Secret and LL Bean to take me off their mailing lists -- I have a weakness for catalog shopping, so I've removed the temptation. I'm not big on yard sales, but I find you can get some really nice clothes in consignment shops for 1/3 the price of new.

-- bring my own food to work, including snacks. I can buy diet Pepsi on sale for 25 cents per can, vs. 75 cents for the vending machine.

-- went through my monthly bills with a fine-toothed comb to see what I could cut -- as a result, I've gone from a $22/month internet service provider (Earthlink) to $10/month (NetZero's premium service). I switched long distance from MCI (5 to 9 cents per minute) to Talk America (3.9 cents per minute). I got rid of VoiceMail ($8/month) and went back to an answering machine ($4 at a thrift shop). I got rid of Well's Fargo bill pay ($7/month) and just mail my checks. I switched to a credit card that gives me a 1% cash rebate on purchases, and to a savings account that gives me 2.7% (NetZero's banking center) from one that gave me 1.7% I switched my cell phone from a $15/month plan, to $8 (Tracfone). Each of these steps was a small amount of money, but they add up, and I enjoy the savings every month.

-- exchange babysitting with other parents, rather than pay a sitter

--Oh, and I found this really great source of inexpensive (sometimes free) baby stuff -- it's called the ''UCB Parents Network Marketplace'' ;-)

Good luck! -- happy bargain hunting mama