Saving During Tough Times: Five Questions to Ask Yourself

Economic Survival Question 1: Who Are Your Dependents?

Do you have kids? Does your spouse work? If you are the sole income provider, then clearly you need a larger stash of cash.

Toni Anderson, 36, is a stay-at-home mom in a household of nine with just one salary coming in. Her husband, Lt. Commander David Anderson, and their seven children (the eldest is 15 years old and the youngest just two months) live on an army base in Fort Mead, Md. They don't pay for housing or health care, which is a huge savings, but even so, there are nine mouths to feed and David is the sole provider. With a large family and just one income, they knew they'd have to save a substantial amount. Currently they put aside nearly half of David's $70,000 a year salary.

"When he got his last promotion five years ago we continued to live on his old salary," Toni Anderson said. "His new [higher] salary will start next month but we won't change our budget."

How do they do it? Anderson says they avoid cable, credit cards, brand new clothing and big grocery bills.

She's inspired others to save on her blog: The Happy Housewife where she now generates about 3,000 hits a day.

"I do get a lot of feedback from readers who didn't think it was possible but are now on the path, getting there. We're not weird. Some people [who have never met us] think all my kids are wearing yucky clothes from the '60s – you can look normal and shop at a thrift store."

For those struggling to save, Anderson suggests writing down every expense. In 2007 she and her husband decided they didn't want any more debt. They spent a month tracking expenses and she said she was surprised to where their money went.

"We realized we could cut our expenses really quickly," Anderson said. "I think people are afraid to write down what they spend because they don't want to know."

Since then they've brought baby number seven into the world and bought a new, larger car that they paid for with cash.

In addition to cutting out unnecessary impulse purchases, Anderson also trimmed the family's grocery bill from about $1,100 a month to $600. "I use coupons, and buy more whole foods, non-packaged stuff."

She's also changed the way she cooks: no more cereal, she makes breakfast from scratch. She even makes her own bread. "I'm very busy. We don't have a television so I don't spend a lot of time sitting in front of the TV. I tend to stay home during the day, and save money by not driving around."

"It's become our lifestyle now -- my oldest daughter is growing like crazy and [clothes] last just five weeks. At a thrift store going through the racks can be annoying and aggravating but at the same time we left the store and spent $50 and bought 10 outfits between two kids and they were all name brand, cute, current stuff. We saved $300 to $400. Is my time worth $150 an hour? Absolutely. When I look at it that way I think going to the thrift store is not going to kill me. And then the [saved] money can go somewhere else."

Economic Survival Question 2: What Industry Do You Work In?

If yours is a niche industry, Yochim says it could be a double-edged sword. For example, if your specialty is no longer in demand, then it's going to be harder to find a job, and in that case you'll need more savings. On the other hand, Yochim said, "if you have specialized skills that are in high demand, then great." There will always be natural turnover.

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