Money

How I’m Making Ends Meet While Going To School And Raising Two Kids

About this series: Welcome to Scrimp City—an anonymous, week-in-the-life chronicle that provides a look at women who are trying to be smarter about money, whether that means saving more, spending strategically, or just being more comfortable managing their hard-earned cash.

In each installment, we follow one woman’s progress toward a money goal or challenge they’ve set for themselves. We learn about their typical spending/saving habits and see if, after their self-imposed money challenge, they come away feeling just a *little* more financially-savvy.

Meet Our Saver

In this edition of Scrimp City, we meet a 25-year-old human resources assistant who is going to school part-time while juggling her responsibilities as a wife and mother of two. After years of bad spending habits and putting everything on credit, she’s finally trying something new: the 50/30/20 budgeting system. Her goal is to pay down her last credit card and start saving so she can move out of her in-law’s home in Minneapolis, MN.

Her budgeting woes all began when, shortly after high school, she got her first credit card. Her impulse spending on small items led her to quickly max out her credit card limit of $700. But, whenever she’d pay off a bit, she’d also get a credit increase. The balance grew over time and the temptation to put purchases on credit only got worse when, at 18, she had her first child, a boy. Realizing that her income from working at McDonald’s wasn’t enough to cover her new family expenses, she relied on credit cards and living expenses covered from student loans to subsidize her family’s lifestyle.

Today, she’s the main breadwinner in the family (her husband works as a mechanic) and is ready to tighten the purse strings to make ends meet. Here’s how she makes it work.

Meet Our Saver:

Job title:Human resources assistant

Age:25

Location:Minneapolis, Minnesota

Yearly income:$38k

Monthly salary (after taxes):$2,340.91

Monthly rent:$500

Housing arrangements:My husband and our two kids share a bedroom in my in-law’s home. I won’t lie—it’s not a super comfortable setup, but I can’t complain too much. We pay less than we would elsewhere for a bigger place and my in-laws are able to help with childcare. Which—when you have a 6-year-old and a 3-year-old—is a huge money and time saver!

Estimated total monthly fixed expenses:~$1590

This includes $500 for rent (paid to my in-laws), $300 in utilities, $375 car payment, $55 health insurance (I qualify for state subsidies), $50 payment toward student loans (I pay this to cover a bit of the interest while enrolled in school), $95 phone bill (for my husband and me), $200 minimum credit card payment, plus other miscellaneous expenses like our Netflix account. Oh, and I also contribute 5 percent of my paycheck to my 401(k).

Total debt:$47,973

This includes a $5,984 credit card balance, $15,451 on a car loan and $26,538 in student loans I’ve accrued over the years.

“My relationship to money is … best described as complicated—but improving!”
How to sum up me + money:

I hate this fact, but the truth is I’m more or less living paycheck to paycheck at the moment. I want to save, but I feel like right now there isn’t a lot of wiggle room for me to do much else except pay for what I need right now and pay down my debt. I’ve never been super good with money. When I was a teenager, I got my first credit card. It was so easy to just swipe and buy things for myself. My priorities shifted when I had my son at 18, but I still relied on credit cards to get what I needed.

Recently, I’ve been trying to finally take hold of my finances! I’m pretty good nowadays at not spending money on unnecessary items. But, with my current salary, our family expenses, and school… I worry that I’m one emergency away from being even more in debt.

Previously, I’d spend money on work lunches and eating out with our family, but I guess you can say I’ve been trying to Marie Kondo my finances! I don’t make a lot of money, and since I have a family I take care of, there’s always extra expenses, so I’ve been wanting to learn more about stocks and investing. But that seems like far-off goal until I’m debt-free.

How I’ve handled my finances in the past:

Money has always been a really big stressor in my life. I developed a lot of really bad habits when I was a teenager and it wasn’t until this year that I kicked some of them aside. I got my first credit card when I was a teenager and it had a $700 credit limit. But I maxed out the limit on, what I know realize, was a lot of unnecessary stuff.

I also got pregnant with my first child when I was 17. I was working at McDonald’s and it was always a struggle. Putting everything on the card just seemed easier. I thought I wasn’t doing a lot of damage because I’d buy things that were cheap and we’d eat out a lot. If I’m being frank, there were times when I would just swipe my card and hope that the transaction would go through. When I reached the credit limit, I would pay it down a bit and then get a credit increase. That kept happening until, well, now I’m facing more than $5,000 in a single credit card.

I’ve also been going to school part-time on-and-off for a few years and now have more than $26,000 in student loan debt. I try to make small payments of $50 each month to try and cover the interest rate for my unsubsidized loans but otherwise, they’re all in deferment until I graduate from school next year. Last year I got my AA and if everything pans out, in a year I’ll get my bachelor’s in human resources management. I’m hoping that will lead to a pay bump, if not at my current job, then somewhere else.

Oh, and one more thing about my loans. I *technically* didn’t need them. At least not for school. My tuition was covered, by financial aid, but I signed on to take out the loans to help cover my living expenses while in school. With our small household income, I used student loans to help cover costs for my family and myself.

My current spending habits:

I really am trying my best these days to live a frugal lifestyle. I had two other, smaller credit accounts that I recently paid off and I feltso, so good about doing that. Together, the balance was less than $1,000 but I made the decision to use my tax refund to pay them both down. I’m proud of myself for doing that. Almost immediately, I saw my credit score increase and that’s been motivating me to pay off this final (although bigger) credit card.

I’m trying to be less nervous about monitoring my spending so I check my bank account score every morning and I keep track of upcoming bills in my planner. Ultimately, I want to give my kids a comfortable lifestyle. I didn’t have a lot of money growing up as a kid and I want to teach them good money habits.

How I got here…and why I’m trying to save
My money goals:

My immediate goal is to pay off my credit card. Aside from tackling my debt, I really want to make a plan for eventually buying my own home. That’s the American dream, isn’t it?

Why I’m trying to save…
My go-to budgeting tools:

I keep hearing about how people use apps to help them stick to a budget but I haven’t found one that’s super helpful for me. Part of the reason, I think, is because I’m making juuust enough to get by. The ways things are right now, I don’t have a lot of wiggle room in my spending or saving allowances. And I’m definitely not at a point where I can think of investing funds. Though, that’s definitely something I’m interested in learning more about! Right now, I essentially stick to a planner to keep track of when my bills are due and I review my checking account each morning to keep an eye on my balance.

How I challenge myself every week:

I wish I could say I have some dramatic savings plan, but the ultimate goal is always this: Try spending as little money as possible. That’s it! Frugality is the key to making ends meet for me—at least at this stage in my life. When I was younger, I used to eat out a lot for lunch. And even though the lunches themselves weren’t particularly expensive, it would still add up. Nowadays, I try to limit myself to eating lunch out at work no more than once, or twice a week.

How much I *usually* spend: ~$300
Where my money goes:

I’m also responsible for groceries for my family (husband, kids, in-laws) and I usually spend about $200 when I order them online. Ordering them online is such a time-saver that even if I’m not getting the cheapest thing available, I consider the cost to even out. This is easily the place where the biggest portion of my paycheck goes to each month. There will be some months, though, where I might spend $300 on groceries for the whole month, while other months will be so much more expensive. I’m constantly thinking about ways I can cut down on my grocery bill. The one thing that seems to help is buying as many “generic brand” items as possible.

In order to get the kids outside of the house, my partner and I will take them out to the zoo or to the movies on the weekend. I’ve been trying to determine how often I can opt for free outings like the park so we can save a little more.

Day One, Wednesday:

I paid $500 in “rent” to my in-laws. I also paid $84.36 interest charge in my only credit card so the balance doesn’t increase. There was also a $25 co-pay for my chiropractor appointment, which isn’t too bad all things considered.

For dinner, my husband and I shared a platter from Panda Express (-$10.32) because we were craving orange chicken. I also spent $66.08 at Walmart on a birthday gift and birthday candles for my daughter, along with some shampoo and conditioner. I’m all for one-stop shop places! I spent another $19.74 at a local grocery store on a cake for my daughter and some bananas.

Overall, I felt pretty bad, money-wise about how much I spent on Wednesday! But—at least the bills are paid! Also, I was very relaxed after getting my back adjusted at my chiro appointment.

Spent: $705.50

Day Two, Thursday:

Ugh—you know those subscriptions you tell yourself you’re only going to do for the free trial and then…well you forget about them and then you get charged? I woke up and realized I was charged $39.95 for a JustFab subscription payment. I was pretty upset about it (even though it was totally my fault). I made one of my regular credit card payments, this time for $85.

Spent: $124.95

Day Three, Friday:

I couldn’t stop thinking about the subscription charge to my credit card. To even things out, I made a payment of $125 on my credit card. I wanted to make an extra credit card payment since The JustFab subscription was taken from it.

Spent: $125

Day Four, Saturday:

Spent: $29.26

Day Five, Sunday:

Okay, maybe I’m realizing now how I like splurging on special holidays, birthdays, etc. But can you blame me? For Mother’s Day I bought flowers and a cake for my mother-in-law (-$17.52). I wish I was able to spend more on my Mother’s day gift to my mother-in law because she deserves the world, but this is was I can do right now.

Later, I saw an outdoor tent for sale and I couldn’t resist the savings sticker (-$192.28). I bought it on impulse but I’m planning on returning it this weekend since…well it’s totally unnecessary.

Spent: $17.52* (I’m returning the tent!)

Day Six, Monday:

There was a lot of spending on Monday—but they were all recurring bills and things that I actually need. So, I can’t complain! Here’s where it all went: My phone bill (-$55.02), Netflix bill (-$14.03), Groceries (-$187.41), gas for car (-$32.77 ).

Spent: $289.23

Day Seven, Tuesday:

My husband and I love Amazon (the convenience). On Tuesday, he needed a part for his motorcycle (he’s a mechanic) and I didn’t mind footing the bill (-$37.24). He works full-time fixing cars and bikes, but at the moment I’m the breadwinner of the house. Even if I’m still not earning as much as I need for us to live comfortably, I try to be understanding of the difference in our income. It won’t always be like this so I don’t mind helping cover expenses when necessary.

Spent: $37.24

How much I saved by end of week:
Total Spent: $1,328.70
Final thoughts:

Looking at the final amount of how much I spent…I can see how quickly I go through my paycheck! Except, I feel a lot of the expenses I go through on a regular basis are for things I actually *need.* Still, I’m thinking that I can cut back on how much money I allocate to our grocery budget. Maybe there are recipes I can try that are cheaper to make?

That being said, I have put away some funds into my personal savings account ($2,750). I’ve wondered whether to use it as a debt repayment but I can’t shake the fear of actually needing the cash in case of an emergency. I’m really aiming to be done with credit cards. I’ve been trying to use the 50/30/20 budgeting method where half of my paycheck goes toward my “essentials,” 30 goes to my personal expenses and 20 goes toward saving. But looking at things now, I realize I have to tweak things further to account for my own debt.

—As told to Theresa Avila

Correction, May 17, 2019: This post has been updated to accurately reflect the source’s age when she became pregnant and had her first child. She became pregnant at 17 and had her son at 18.


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