Finding it hard to keep your money in your pocket? With today's tight job market, rampant student debt, and high unemployment rate, many Americans are in a constant struggle to live within their means.
Had you grown up in the Economides household, however, you'd know what it's like to live on tight budget.
Steve and Annette Economides, authors of America's Cheapest Family Gets You Right on the Money: Your Guide to Living Better, Spending Less, and Cashing in on Your Dreams, may be the definition of shoestring budgeters.
The couple acquired frugal-living habits after marrying in 1982. Although Steve was only making $13,000 a year at a printing company, Annette wanted to be home to raise the kids. To make it work, the couple used creative methods to live off one income, such as Annette learning how to sew to make her own maternity clothes. They found that, even on limited financial resources, they could still afford some of the discretionary expenses they longed for; all it took was discipline. "We had to save three months to go out to dinner at Benihana, but we got there," says Annette.
By keeping a tight strap on their wallets, Steve says they never had to lean on credit to support their lifestyle. That may be hard for many consumers to picture, as the average U.S. household today with at least one credit card owes nearly $15,950 in credit-card debt, according to recent data compiled by CreditCards.com.
The Economides never borrowed money, except when they took out a mortgage on their first house in 1985. By continuing to use the same spending principles—"less is more" means more money flows into their savings pool—the Economides paid off the home after nine years. Having crammed five children into the 1,400-square-foot living space, the family had saved up enough to buy a larger house.
Thanks to their clever spending strategies, the Economides kept their household of seven financially stable on a shoestring budget. Here's how they did it:
Keeping the fridge and pantry full, but the trash can light. The average family of three spends $6,129 a year on food—close to 13 percent of their budget, according to The Food Institute, a research and trade association. With seven mouths to feed, the Economides only spent approximately $4,200 annually on food. "We take stock of what we have and make sure to check the food ads and coupons that come out in the paper or online each week," Steve says.
Curbing the number of trips they make to the supermarket was also a critical component to their strategy. When the children were young, they went grocery shopping once a month. As the kids got older and began eating more produce, they upped their visits to twice a month—still significantly less than the average American, who goes two to three times a week. However, Annette says visiting the grocery store less doesn't sit well with many shoppers. "People think, 'If I don't go to the store every week, I'll miss all the sales.' The truth is you'll miss some, but you don't want to put yourself in the position very often where you're tempted to buy food you don't need," she says.
Moreover, the Economides believe the more consumers go grocery shopping, the more likely they are to fill their carts with impulse purchases. In fact, in his book Why We Buy: The Science of Shopping, grocery industry researcher Paco Underhill says 60 to 70 percent of supermarket purchases are unplanned.
While restricting your grocery shopping to only essentials foods is important, Steve says holidays are a great time to stock up on certain items. His family plans some of their purchases around seasonal sales. Before Thanksgiving, for example, items such as turkeys, yams, or cranberry sauce are marked down. Corned beef is often a bargain before St. Patrick's Day. Also, ribs, hamburgers, and hot dogs are great buys in the days leading up to Memorial Day.
Annette offers another approach for stocking up: "If you know your consumption rate and have a way to store the items, vacuum-sealed meats will save for a year, so you may want to buy in bulk if there's a great deal."
Shopping at all the right places. The Economides use a number of traditional hotspots for snagging deals, such as garage sales, church rummage sales, and consignment shops. When their son needed a tuxedo to wear for the community band's concert, they found one at a thrift shop for $30. Steve says there's often more bargaining room with local residents than online vendors, as many people are willing to reduce their asking price for a good neighbor.
Nonetheless, the family does a large majority of their shopping online. Like other consumers, they visit popular websites such as Craigslist.com and eBay.com, but use a slightly different approach—basing their timing for purchasing certain products on when a deal crops up for the item they need. For example, when their printer's toner cartridge was low, Annette held off on replacing it until she spotted a new one on eBay for $40, about $30 off the retail price. They also used bricks they bought on Craigslist when re-landscaping their backyard.
"We realized that if you want something and you don't have the money for it, there's always someone who's getting rid of that thing you want," Annette says, emphasizing she never buys an item online at retail price. "If you're patient, you'll find it."
The bottom line: Whether you're on a shoestring budget or looking to put away some extra savings, these strategies are easy to implement. "It's such a lifestyle that we don't even think about it anymore; we just do it. We save our tin foil that we use for our baked potatoes. We save our paper grocery bags and reuse those," Annette says. "We have very little trash."
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