Living on less

Frugal choices buy one-income families
simpler lifestyles

By Ovetta Sampson/The Gazette
Edited and headline by Barbara Cotter

Jonni McCoy looks as if she lives in luxury. Her light gray home in Mountain Shadows has a two-car garage, charming gingerbread
trim and handsome back yard.

But don't let appearances fool you. Step inside. That baby-blue chair near her fireplace: $10 at a garage sale. That rich azure couch sitting on her hardwood floors: 14 years old and counting.

Nine years ago, McCoy left her job at a large computer firm to spend more time with her children. That decision launched her on Spartan odyssey to cut household expenses so her family could live on her husband's income as an engineer at Lockheed Martin.

The McCoys don't live a lesser life; they just live life for less. In doing so, they're a model for other families who want to live on one income in a two-income world.

"It's a myth that you can't live on one income in this society," says Gary Foreman, a former certified financial planner from Florida. Foreman now publishes "The Dollar Stretcher," an electronic newsletter with 95,000 subscribers. "A lot of people are doing it. (But) you have to be willing to be a little different than the crowd."

Less work, more Money
Foreman says that many of his subscribers want to downsize to one income but are afraid it costs too much. But those who thump the one-income bible say that, for some families, it's work that costs too much. Consider Jonni McCoy.

Three years after her son was born, she quit her job as a buyer for Apple Computers Inc. When she sketched out a financial plan, she discovered that working cost her nearly $11,000 a year to pay the nanny, buy business suits and visit the hair salon, among other things.

"There were just all kinds of hidden expenses in the cost of working," says
McCoy, who has written two books on being frugal and made television appearances to promote the frugal life.

Not all families can afford to live on just one income; the parent who stays working has to make enough to cover the basics. But it doesn't take a six-figure salary. Several local families who downsized started out lean,
living on as little as $20,000 a year before times got better. One Colorado Springs family of six lived on just $16,500 one year.

Families can use online worksheets or talk to financial planners to decide whether they can drop down to one income, but here's one tip: "If that second income isn't bringing at least $30,000, it's probably not doing you much good," said Andy Dappen, a Washington-based author of "Shattering the Two-Income Myth."

Get fiscally fit
To take the plunge, fiscal planning - budgeting, shopping during sales, paring down the frills - is essential. Joanie Kagan, a Colorado Springs mother of a toddler and preschooler, learned the hard way how important it is to plan.

Four years ago, when Kagan quit her Denver sales job, her family had to live on 70 percent less than before. Even though the Kagans stockpiled about 20 percent of Joanie's paycheck during the five years before she quit, it still was rough. She remembers taking canned beans and pears back to the store to buy diapers. "For a year and a half it was really tight," she said. "We didn't plan a budget."

Now Kagan sees herself as the household manager, not just a stay-at-home mom. Her job is to find the best value for her family's resources. That means thriftier shopping, and it has worked for her: The Kagans are making ends meet and even can save 15 percent of their income.

Fiscal plans also illuminate wasteful spending and help families prioritize. Mike and Laurie Bossert, parents of three boys, call it having an action plan for their money.

In their plan, the Bosserts split their income among various "action" accounts. Mike Bossert, who works at Oracle, said the money automatically is deposited into accounts for travel, education, house remodeling and car funds. Then they're able to pay upfront for all their expenses - including such big-ticket items as their two cars - which eliminates debt.

McCoy suggests that families try living on one income for at least six months before a parent quits, just to see how they fare. At the same time, squirrel away that second income.

After one parent quits, start making changes slowly: Attack the grocery bill one year, then go after entertainment spending the next. "If you go whole hog and try to do everything, then you're going to
burn out," she said.

Reprogram yourself
It takes superhuman motivation to live frugally in a society
steeped in consumerism. Occasionally, families suffer withdrawal pains.

"I was so yuppie and suddenly I was so frugal," said McCoy, who lived in Silicon Valley before moving to Colorado Springs. "It was like slamming the brakes. I had to reprogram myself. It's almost an artificial change in who you are."

But families who choose to live on one income develop new attitudes about spending. Their priorities change, and they willingly make sacrifices.

"There are choices that you need to make," says Mike Bossert. Though he makes a good salary at Oracle, Bossert drives a 9-year-old Ford Escort, takes his lunches to work and has basic cable in his Briargate home. "We don't believe that we need a new car all the time. We don't need to keep up with the Joneses."

The families also look at their children as the ultimate motivation
for commercial sacrifice. "It's all just materialistic stuff that I'm not having right now," Kagan said. "We live very simply. But the joy that these little guys bring me is just priceless."

Can you really live on one income? Here's how some
local families did it:

THE MCCOYS

In her first year, Jonni McCoy saved $3,000 slashing her grocery
bills by:

Keeping track of food prices. Eggs don't cost the same everywhere.
McCoy shops at multiple stores. She doesn't spend more than the
lowest sale price for an item.

Planning meals around sales. Every Wednesday, McCoy looks at
the grocery sale fliers and sees what's on sale. Then she plans her
weekly meals around those items.

Buying older cookbooks. Nearly all of the McCoy's meals are
homemade. Using 19th- and early-20th-century cookbooks,
McCoy makes items we think we have to buy, such as maple
syrup, chocolate sauce and fruit roll-ups.

THE BOSSERTS

Practice delayed gratification. Mike Bossert drives a 9-year-old
Ford Escort; his wife, Laurie, drives a 1996 Windstar; they paid for
both in cash. Though they could finance more expensive cars, they
don't. They're waiting until they can save enough to pay in cash.

Targeted spending. Each month, they put money into various
savings accounts targeted for different costs. Laurie Bossert, a
CPA who quit her job to stay home, suggests that families create a
budget to help them figure out what accounts to set up. Perhaps
one is for a car; another for a vacation.

Pay up front. The Bosserts avoid credit cards and other forms of
financing. Their only outstanding debt is a mortgage.

Talk it over. They look at theirfamily finances as a joint venture.
They never spend more than $25 without talking to each other
about it first.

THE KAGANS

Buy clothes off-season. Joanie Kagan saves by buying winter
clothes in the summer and summer clothes in the winter. She also
buys clothes a size larger so her children can grow into them.

Keep a gift closet. She buys Christmas presents year-round. Every
time she sees a sale, she stocks up.

Write manufacturers. Kagan will oftenwrite a food company telling
them she likes their product. They send her back coupons for free
goodies.

Getting help

• Jonni McCoy's "Miserly Moms: Living on One Income in a Two
Income Economy," (Full Quart Press, $9.99) deals mainly with
reducing grocery bills. It offers suggestions on how to shop and has
an interesting analysis on the hidden high costs of warehouse food
clubs.

• McCoy's "Frugal Families: Making the Most of Your Hard Earned
Money," (Holly Hall Publications, $9.99), gives practical tips on
how to save on car insurance, car repair, computer purchases and
more. It also shows how to create a budget and includes a chapter
on teaching kids to save.

• McCoy also is online at www.miserlymoms.com, a site with lots of
links and tips on how to save.

• Frugal author Andy Dappen has an online worksheet to help
families deter- mine whether they can live on one income. Go to
www.brierbooks.com and click on the icon that says "Two-Income
Economics," on the right side. You also can order his self-published
books: "Cheap Tricks: 100s of Ways to Save 1000s of Dollars," and
"Shattering the Two-Income Myth," (both $14.95 Brier Books).
His Web site offers saving tips for food, cars and other items.

FRUGAL NEWSLETTERS INCLUDE:

• The Dollar Stretcher, Gary Foreman, editor, www.stretcher.com,
P.O. Box 23785, Ft. Lauderdale, FL 33307.

• Living Cheap News; Larry Roth, editor; P.O. Box 8178, Kansas
City MO 64112, e-mail Livcheap@aol.com.

• Cheapskate Monthly; Mary Hunt, editor; P.O. Box 2135,
Paramount, CA 90723-8135, www.cheapskatemonthly.com.