Author Topic: How do you pay off debt and save money in high COL state and lower income?  (Read 3063 times)

skinnyindy

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I can't write a full case study right now but I would like to know how people pay debt and save in a HCOL area and make less then others on here.  Our income is below $100,000 (much less) and we homeschool so our time to commit to work is a little limited. We will be adding another part time job to the three jobs we already work. Our housing is great and inexpensive and we won't move.  What do lower income families do?  We are thinking of remodeling to rent out a part of our house but that is my only idea besides selling flowers and food from our yard.  Our biggest costs are food, educational costs, cars, and our mortgage.

MoneyCat

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Homeschooling is difficult when you are low income, because you are basically paying twice for their education: once through your property taxes and then again through purchasing book and supplies and using up your time to teach them at home. Is it really necessary to home school? Are your local public schools really that bad?


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boarder42

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how is educational cost high if you homeschool. 

Mongoose

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I can't write a full case study right now but I would like to know how people pay debt and save in a HCOL area and make less then others on here.  Our income is below $100,000 (much less) and we homeschool so our time to commit to work is a little limited. We will be adding another part time job to the three jobs we already work. Our housing is great and inexpensive and we won't move.  What do lower income families do?  We are thinking of remodeling to rent out a part of our house but that is my only idea besides selling flowers and food from our yard.  Our biggest costs are food, educational costs, cars, and our mortgage.

It's hard. A full case study when you have time might get some ideas for optimizing spending. Without earning more, debt payoff can be maddeningly slow. Step 1 would be to stop accruing debt if you haven't already. Just a few other ideas...

Any unnecessary stuff laying around you could sell? We had about $2500 worth of unnecessary crap (scrap metal, inherited coin collection, crystal, the family silver, etc) and converting that to money was a big help. None of it was stuff that we used or had any sentimental attachments for us. We kept the second car based on our location (I don't want to be in a quite rural area with kids and no transportation).

I know some homeschoolers who take in an extra kid or two (either education-wise as well or nanny for toddlers) to make some extra money. Some even run a home based daycare. Your state regulations would be important to consider if this option might be of interest.

I know some other folks who both work full time but on opposite schedules. It's brutal but helped keep the income up while allowing them to homeschool their 4 kids.

how is educational cost high if you homeschool. 

OP listed educational costs as one of their big expenses. Even if you don't spend on curriculum (which is a personal choice that I'm not trying to open for debate), there is usually the opportunity costs of not being able to devote as much time to wage earning. I could get a full time job if the kids were in school (but our local schools are that bad so we made the choice to homeschool).

skinnyindy

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Homeschooling is one of our top values but we take it year by year.  Our children had developmental delays and being involved in their therapy made homeschooling an easy transition.  Other people think our schools are bad but I don't agree enough for it to be the reason we homeschool.  Our children have had some great opportunities to do things they would not have done if they were in traditional school.  They also take lessons and classes that cost money but on the top of our values.  For example, one takes dance from a culturally significant teacher.  Academically, they do well with one excelling and one behind.  Both of them get to do special learning as homeschoolers.  The others are middle of the road to me but above average on paper.  I was grateful for homeschooling when we were caregivers for years because I had to be able to stay home if there was a sudden illness and would not be able to get them to school.  That in turn helped save money and preserved the family home which we now live in.  This caregiving is some what common in our state.

I have been trying to sell our clutter and need to work on it more.  I find our town's Facebook buy/sell page really good at selling our extra eggs and fruit as well clutter, I just need to post more.  I will start working part time soon to pay off our credit cards and also to get saving. 

Lastly, our food costs the most but we live in an area that doesn't have an Aldi, etc.  But we belong to a food co-op (which gives access to wholesale produce, Azure Standard and Frontier, etc) and get everything else at Costco.  I did coupon for awhile but we don't get as many good coupons as other areas.  Also, we aren't vegetarian, completely organic nor gluten free but I have to cook without salt due to it causing hearing loss.  I need to learn to cook more frugally from scratch. 

tonysemail

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how much credit card debt?

I would suspend all extra-curricular classes until my 'hair on fire' debt is paid off.

Frankies Girl

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how much credit card debt?

I would suspend all extra-curricular classes until my 'hair on fire' debt is paid off.

+1 on extra-curricular things until all debt is gone. They are not necessary (dance class or sports or even music lessons that cost money are NOT a necessity, even if it is "culturally significant") and you are spending money you don't have on things you can't afford if you have hair on fire debts. Can start them back once the debt is gone.

You really need to sit down and go over your spending and budget line by line and see what is truly necessary and what is something you want to do or otherwise justify even though it is not necessary to live and be reasonably happy. If it was me, I'd prioritize things to where the most important is making sure all our basic needs were being met, and then debt irradiation as second.

You can homeschool part time and they can attend public school part time too. That's what MMM does (or did) with his son. Last I read, the little MMM attended a few classes during the week to both learn and to give him the opportunity for socialization with his peer group. That would give you the opportunity to work part time as well.

I'd check out your local library and museums for interesting free activities that can be culturally significant. Most museums have a free day and other activities targeted at children. My local library just had a Japanese drumming concert and allowed the kids to come up and play the drums after the performance. Last month they had a petting zoo in the parking lot. They do movies and crafts and teach classes often.

Choices

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Are there opportunities to barter for dance or other lessons if you don't want to give them up? Maybe childcare or eggs/flowers for a lesson? Or can your older kids help out with yardwork or housework?

notactiveanymore

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I second (or third) a full case study.

I guess I just am not making the connection here... You live in a HCOL area, but your housing in inexpensive. How far below 100k is your income? Because it seems to me that the COL shouldn't be too much of a hit to your budget beyond food and maybe gas.




galliver

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The high costs in most of HCOLAs tend to mostly stem from housing. Other things that end up being more expensive than other areas, like restaurant meals, salon services, daycare, mechanic, etc would then go back to the fact that everyone working at these places has to pay rent, too. The way you save more is by consuming as little housing as you can get away with. A single family home is a huge luxury; condos are generally a more efficient form of housing. You say you sell flowers and fruit that you grow, but does that even cover the cost of growing them, much less the extra housing costs of having a house vs eg a 3BR condo? In an earlier post you said you paid $240/mo for someone to come care for your yard? Hopefully you've cut that already.

And obviously, this tradeoff to some extent exists everywhere (extra space, rooms, finishes, nice neighborhood, etc costs more), but where in rural Iowa an average house might be $150k and $400k would basically be a mansion, in my area (LA suburb) a 1BR condo is ~$250k, houses seem to start around $500-700k (and they start small/crummy, maybe 2-3BR) and as you get into really nice ones they definitely get into the millions.

 I'm not saying you have to move, but I suspect you're in a situation of "geographical location, yard, savings; pick 2." If you are staying in the exact place you are in, you are locking up that (presumably large) part of your budget, and only have the rest to play with. How much can you cut from those other expenses?

As for cars, between insurance, gas, and maintenance they can get up to a few hundred each month. As with housing, it's best to minimize how much auto you need. I knew one-car families growing up where mom would take dad to work and pick him up. It's not the most convenient, but saves the cost of the car plus insurance, gas, maintenance and registration; is that worth the inconvenience? Can you afford the convenience in the first place? You have to decide. Obviously if walking, biking, moped/scooter, bus, or carpool are options they are worth considering.

notactiveanymore

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The high costs in most of HCOLAs tend to mostly stem from housing.

from the OP:

Quote
Our housing is great and inexpensive and we won't move

That's why I'm confused about why the HCOL should affect them so much.

Mongoose

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The high costs in most of HCOLAs tend to mostly stem from housing.

from the OP:

Quote
Our housing is great and inexpensive and we won't move

That's why I'm confused about why the HCOL should affect them so much.

Looking at other posts, the OP may be in Hawaii. I'm not overly familiar with prices there but since almost everything would have to be shipped in I can imagine that most stuff might be much more expensive than on the mainland. (If the OP is in Hawaii...).

MoneyCat

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how is educational cost high if you homeschool.

The main cost of homeschooling is the cost of your time spent teaching your children yourself when you could use that time to generate income if they were being educated in public school. If homeschooling is something that you are really passionate about -- for religious or ideological reasons -- then no financial argument can be made against it, but if it's something you feel is flexible, it could be a good opportunity to increase your income.