The economic recession has changed the lives of millions of Americans, but adapting to a new financial situation can be easier said than done. For two families, pay cuts and unemployment mean making behavioral and lifestyle changes that aren't easy.
Brad Wiggins, 53, an attorney, father of seven and grandfather of two who lives in Santa Clara, Calif., has taken a substantial income hit -- 62 percent.
"When the pay cut came, we were in shock," he said. "We really didn't know how we were going to make it. It took us a while to adjust."
Despite making significant household budget cuts, Brad and his wife Anita are still almost $1,700 a month over budget, with little savings left to live on. Brad said "it sure feels like" his finances are running his life, and his wife agreed.
"Our new grandbaby was born; I so wanted to get just, like, little blankets and, you know, just fill my cart up to take things and go get my daughter a new outfit or, you know, things that she would like," said Anita Wiggins, choking up. "And I wasn't able to do that."
The Bell family of Houston, Texas, has also seen their lifestyle change due to the recession. Latavious Bell, a computer engineer, has been out of work for two months.
"I'm still waiting, still calling," he said. "I mean, the jobs are just not there now."
The family still has the teaching salary of Latavious's wife Tawayna to rely on, as well as some savings, but with their household income down 75 percent, Tawanya has serious concerns about their spending habits.
And while she has cut back when it comes to the couple's two children, Latavious has found that to be difficult.
"I say no, but Daddy says yes," Tawayna said.
"It's kind of like this dream, to be able to provide for the family," Latavious said. "Anything they wanted. And that makes me feel that I haven't done what I needed to do, as, as a man, to provide for my family, you know. "
When asked if he had gone beyond providing for his children to spoiling them, he said, "They deserve to be spoiled," but admitted that "I'm still in the spoiling mode, and reality is right here. Something has to change."
Financial advisor Dave Ramsey agreed to give both families a financial check-up, and they agreed to abide by his advice and make some drastic lifestyle changes.
"The first thing I saw when I looked at your numbers was the refinance is necessary," he told the Wiggins family. "If you can refinance that first mortgage and get the overall payment down, we will get this thing where you can breathe a little bit more."
Work Together to Increase Household Income
"We've also got to work on getting the household income up," Ramsey said. "We are trying to eat. We are trying to pay bills. We are trying to stay balanced. And so, Anita, that means you. Anything anybody in this family can do to bring in some money is a great idea. Everybody put their shoulder to the wheel and push this thing and you can get past this rough spot."
Anita Wiggins said she wasn't sure how to get back into the job market after spending time taking care of her children.
"Basically, I've been a mom," she said. "I don't have a resume, that's, you know. I mean, I can do carpool, I can cook, I can do a million things at once as far as, you know, I can answer phones, but you know, my computer skills aren't great."