Strategies For Becoming FI In Families With Children

 

How did the Varney family do it?

 

Lucynda Koesters article:

 

 

Leaving A Crazy Lifestyle Behind

"It was a life I wanted to leave behind," says Marijo Varney, 36, of Keene, New Hampshire, referencing her "crazy" dual-income existence of two years ago. Husband Jim, a 40-year-old quality engineer, worked two hours away from home. Marijo, an assistant speech therapist, worked in four different schools. Seventh-grade daughter Kristin was constantly sick, having been diagnosed with colitis. Fourth-grader Peter was dyslexic and having trouble in school.

 

Some would say this family's existence wasn't crazy, but impossible. Marijo, through determination and sheer will, finally managed to put the brakes on this mad menage, quitting her job and transforming her family's lives.

 

"Life before" typically found Marijo shouldering the brunt of the household burdens. With Jim working two hours away, most of the family's needs fell to Marijo. She recalls, "(Jim) would leave every morning at 6 a.m. and get home about 7 p.m. I, on the other hand, traveled among four schools 30 minutes from the house. I would leave at 7 a.m. and get home at 4-5 p.m. every day. When the children got sick, I would have to run back to town to get them and go back to work after dropping them at home. I was purchasing convenience foods and even had the Schwan's man come to the house (delivering frozen food). My house was a mess because I was too tired to keep it picked up."

 

In addition to the normal hassles of a dual-income lifestyle, an emotionally and physically exhausted Marijo struggled to overcome her family's increasing problems, including her own diagnosed illness, inflammatory bowel disease.

 

She relates, "I was on all kinds of medication trying to get the attack under control. While all this was going on, Kristin's doctor's diagnosed her with non-specific colitis. She was ill constantly. I kept getting the phone call from the school nurse saying Kristin was there again. I would drive the half hour to get her, bring her home and then go back to work.

 

Peter was in fourth grade that year and having a terrible year. Every morning, it was a fight to get him out of bed. They found that he was dyslexic and had a superior IQ. He was struggling with reading and writing and was bored because they were not challenging him intellectually. Nice mix, huh?"

 

The threesome managed to finish out the school year, looking forward to the summer respite. However, near the end of the school year, Marijo was told that the following year, all the therapists would be switching schools and she would be placed in a school farther from home (an hour away). This proved to be the last straw.

 

That summer, Marijo finally decided to look for a way out. She read every "miserly living" book she could get her hands on, including Miserly Moms by Jonni McCoy, The Complete Tightwad Gazette and Mary Hunt's Debt Proof Your Kids. Says Marijo, "I just ate the information up."

 

Then, Marijo took the "what is it costing you to work" test (included in The Complete Tightwad Gazette and Miserly Moms). She looked first at the expenses of working. Hers included child care, taxes (local, federal, state), commuting fees (tolls, parking, etc.), gasoline and mileage, car insurance (extra car, nicer car for the job, etc.), clothes (new clothes, cleaners, accessories, etc.), gifts for co-workers, fast-food lunches and breakfasts, convenience foods at home, extra eating out, occasional housekeeping help, hair care, and medical bills (due to stress-related illnesses). Then, she totaled the cost of all of the expenses and subtracted that total from her income. Marijo discovered she was actually LOSING about $600 per month due to her job.

 

"Imagine working full-time and losing money! I immediately took this information to my husband, and I can honestly say he was as shocked as I was," says Marijo.

 

At this point, Marijo began to change the way she shopped for food and clothing. She began paying off bills and planning for a simpler lifestyle. "I also changed my way of thinking about life," she says.

 

She and Jim analyzed the situation and decided that Marijo should resign. Marijo's income contribution was roughly 30% of their total income, and both she and Jim were very concerned about losing her paycheck. She says, "After all, we both had college loans to pay off and two children who would be looking at college."

 

The family gradually transitioned to life with less income. Marijo immediately put all her newfound frugal living knowledge to the test. She reduced her food budget substantially by cooking from scratch, buying groceries in bulk, eliminating convenience foods and employing the once-a-month cooking method. She discovered the difference between true needs and simple wants. I am always asking, 'Do we really need this or do we just want this?' My children started asking the same questions. They are also beginning to realize that we just don't go spend money because we have it."

 

The Varney family made their transition about two years ago. Are they a one-income success? The answer lies mostly with the children, Kristin, now 16 years old, and Peter, 13.

 

Kristin's illnesses have now eased and she has become a confident, well-adjusted teenager. Says Marijo, "Peter is now reading on the seventh-grade level! When he started sixth grade last year, he was reading at a beginning fourth-grade level!"

 

For other dual-income families looking to make a transition to one income, the Varney's advise several things. First, they suggest taking the financial test: how much is it costing to work out of the house? Next, they believe a debt reduction plan is important. In the meantime, Marijo believes it is important to implement a bulk grocery buying and cooking plan. Finally, they urge sticking to the plans until results begin to show and it's certain they will work. Then and only then, do they suggest making a goal to leave a full-time job or cut back to part-time.

 

What was the hardest thing Marijo dealt with after leaving her job? She says, "I would have to say the guilt of not bringing in a paycheck. Allowing myself to realize that being an at-home mom was a full-time job."

 

In addition to dealing with feelings of guilt, Marijo relates several other things she's learned: "My family is number one in my life. . .we do not have to keep up with the neighbors. If (neighbors) want all the new gadgets and toys, let them."

 

Finally, she says, "I still feel guilty at times, but I keep reminding myself that staying home with my children, even though they are teenagers, is better for everyone. My children are happier, I am happier and healthier, my husband is happier. I am doing the right thing by staying home with my children. . .I wish other parents could see that it is possible to stay home, survive, and have healthy, happy, children."

 

The Varney family can be reached at: mjvarney@cheshire.net

 

Lucynda Koesters writes about one-income living. She appreciates hearing from others working toward the goal of a successful single-income lifestyle. Contact her at: lkoestrs@venus.net.

 

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How did the Miller family do it?

 

Lucynda Koesters article:

 

Retire Early! One Income Family Plans For Financial Independence

 

Laura and Dann Miller of Clarkston, Washington, are living a successful one-income life. How successful? Staying out of debt, living comfortably within their means and saving and investing enough to retire in their forties (approx. 15 years away) are just a few of the fulfilling benefits the Millers attribute to their lifestyle. This success has not come easily or quickly; they've had to make adjustments from their former two-income life by reining in spending and saving more money. But with benefits like a far less stressful life and the goal of early retirement to look forward to, the Millers believe it's all worth it.

 

How did the Millers get started on the road to one-income success? They began their married life seven years ago in Anchorage, Alaska. They had two children within the first two years of marriage while Dann was still in college and Laura worked as a hairdresser. Early on, both partners worked even after the children arrived. Says Laura, "Looking back, we had what I call a 'two-income mentality'. We felt we couldn't have a comfortable life on one income. We never actually sat down and worked out the cost of working vs. the cost of staying home; we just assumed two jobs were better." The family was far from being spendthrifts, though, paying off education and auto loans quickly and purchasing a new home in the first four years of marriage.

 

Yet Laura was not happy having to put her children in daycare, so when Dann was transferred from Alaska to Clarkston, Washington, a year and a half ago, she made the decision not to go back to work outside the home. Of this decision, she says, "It hit me that at any time in my life I can go back to work, or school, but I only have one chance to raise my children. I became determined to make it work on one income."

 

This was difficult, because the family was used to the money from a second income. Laura began to read all the tightwad material she could get her hands on and sought help from her grandparents, who, as she describes, are of the "waste not, want not" generation. She learned to cook from scratch and began browsing second-hand stores for good-quality used clothing. Her husband was supportive, willingly taking homemade lunches and leftovers to work and wearing second-hand jeans. She feels that all the tightwad material was motivational and helped her learn to think creatively.

 

Her efforts paid off: "My kids wear brand-name clothes that I find in thrift stores--it is important to me that they feel they 'fit in' with their peers, but I refuse to pay GAP prices. When we both worked, our kids wore OshKosh, Nordstrom brands, Levi's, etc. Now they wear OshKosh, Nordstrom brands, Levi's, etc. How? Because these days spendthrifts throw out anything and everything. If you visit the Goodwill or other thrift stores often, you will find many brand names, and many -- believe it or not -- with all the original tags still attached. I buy used (but in excellent condition) Levi's for my husband who is required to wear jeans and goes through a pair in six months (Dann is a marketing and membership manager at Costco in Clarkston). I have never paid more than $6 per pair, even for Silver Tab. I emphasize this because if you are extremely fashion conscious as I am, it may scare you to start shopping thrift stores. BE NOT AFRAID! I love it when my husband gets occasional comments at work about his 'expensive' clothes. It's not that I think we should all be focusing on brands; I would just like to blow the 'welfare' image that being a tightwad conjures up."

 

On the grocery side of things, Laura insists, "Being frugal means NOT eating as many packaged 'cheap' foods. My family has homemade meals with no preservatives, quality, fresh ingredients, and we drink water instead of pop. This is cheaper than buying pre-packaged meals and MUCH healthier."

 

The family experienced other benefits from having one parent at home. Dann pursued and received a promotion requiring a more flexible schedule--an impossibility if both partners worked. He was also able to pursue a dream of becoming a (part-time) firefighter. Laura feels the family is living a more fulfilling life with less stress: "I no longer worry that my kids are doing OK at the sitter; I make all their food and know it is healthy; they are very confident and secure kids. . .no matter how great your daycare provider is, WE are the ones who matter to our children and who will make the most difference. This confidence (or lack thereof) will be with them throughout their lives."

 

Dann and Laura are making a financial success of their one-income in the $40K range, less than many of their peers, but the Millers are saving and investing enough to accomplish an early retirement -- something many people say is the "new American Dream." How are the Millers carrying out this goal? Their early attention to saving money and avoiding debt is a major factor. Says Laura, "Dann and I have never bought major purchases (other than a mortgage and education) on credit. We started a savings trick when we were first married -- we saved a set amount, then we rewarded ourselves by buying something from our 'wish list.' By doing this we were able to buy two vehicles outright. That saved us a lot of money in the long run because we didn't pay interest. Obviously, having the money before you buy something requires some patience and discipline, but staying out of debt frees up our income for things we'd rather be paying for."

 

Dann and Laura estimate they are about 15 years away from financial independence. They plan to be earning enough in interest from their saved investments that they will have the freedom to choose whether or not to work. Laura says, "Often people assume that if you're financially independent you must be BEYOND WEALTHY, but that's really not the case. Anyone with determination can achieve this. . .I don't feel that I will want to be done working in my forties, but rather I will choose work that is really fulfilling. The point is, I will have the choice because money won't be an issue."

 

The key to retiring early, the Millers believe, is starting a savings program as early in life as possible. Laura explains, "The key to saving for retirement is to start yesterday. The younger you are when you begin to put money away, the less you must put away and the bigger it becomes. If you are able to visit with a financial advisor (or a friend who knows something about numbers), ask him/her to show you the difference between someone who starts saving in his/her 20's vs. someone starting in their 30's. It is astounding. My husband was already taking advantage of his 401K when we married. (I was 20, he was 23.) We have the maximum amount taken from his check BEFORE we even see it. This way, even during times of financial strain, we are securing our future.

 

With every decision you make there comes a sacrifice... we are not living as 'high' a life as some of our peers right now because we chose to be able to have financial independence early. If things go as planned we will be financially independent in our forties. Sadly, even though they are living it up now, our peers will be working full time into their late sixties or longer before they can quit. Some never will. That is the sacrifice they are making. To us it is not worth having to work the rest of our lives so that we can have the latest toys and the largest house and the Eddie Bauer Ford Explorer NOW."

 

For anyone interested in early retirement and financial independence, the Millers recommend reading the book "The Millionaire Next Door" to get started. They also suggest utilizing mutual funds as an investment vehicle: "(We) recommend mutual funds because the return is so high and the risk factor is low compared with single stocks. We buy the 'Mutual Fund Forecaster' and pick no-load funds that we manage ourselves, which saves us the broker fees. We DO NOT sell and trade like brokers want you to do. This makes them money because they charge a fee each time, which cancels out much of any profit you may have made. I am not a financial advisor, I am only sharing my experience, so do your own research as well and get advice from others --but start now."

 

Pretty motivating advice from a single-income family working toward the new American Dream: early retirement!

 

You can contact Dann and Laura Miller at: lauram@clarkston.com.

 

Lucynda Koesters is a former "two-income" spendthrift turned frugal "one-incomer." She loves to hear from anyone trying to make a similar transition. Contact her at lkoestrs@venus.net.

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How do you raise kids with the FI program?

 

With homeschooling and no TV, our kids have very little interest in buying anything. My daughter (age 12) has had her own business for 3 years now. She has a flock of 50 hens and sells eggs as well as shows her hens and eggs at the county fair (where they've won blue ribbons every year!). She is very careful about keeping income/expense records herself, partly to make sure she's charging enough for her eggs and because she's watched me do my own income/expense work. All in all, we have a great sense of working together as a family to fulfill our needs, be they material or spiritual, and of making do, buying used, or whatever it takes. (Jane Dwinell)

 

I'm the single mom of 2 beautiful daughters (Starr, 9 1/2, and Ariana, 3 1/2)... From a practical standpoint, on the Monthly Tabulation form, it's a little confusing noting Starr's expenses. Sometimes I just have a category "Starr" and put in it her purchases, gifts for birthday parties, field trip expenses, etc. School or "tuition" I keep separately. I've been encouraging her to complete her own wall chart/cat collage combination! She has begun but needs some motivation to continue/complete. (Don't we all!). (Diana Blaisdale )

 

Raising Kids With Just A Little Cash, by Lisa Reid, Ferguson-Carol Press, 1996.

 

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