One Child, Two Mortgages, Three Mouths and No Credit Cards

Meet Rick and Susie, a successful middle class couple in their 30's with a 4 year old daughter named Zoe. They own a house in the Twin Cities and moved there two years ago when Rick finished his MBA and relocated from Cincinnati for his new job. He makes good money, enough so that Susie is able to stay at home with Zoe and earn money working on freelance art projects. But Rick is no millionaire and during these tough times they are faced with a significant financial constraint: after two years they still have not been able to sell their condo in Cincinnati.

They were lucky to rent it out for the last year but when the tenant's lease expired in November they have been stuck paying two mortgages (luckily the condo mortgage is about a third of the payment on their current home). This has put considerable strain on their cash flow!

Aside from doubling up on housing, the shaky economy has presented them with additional risks: Rick just survived a round of layoffs (he works for Target headquarters) but there is no guarantee that his job is secure. Yet despite these financial challenges, Rick and Susie have managed to pay their bills on time by making small adjustments to their lifestyle and without incurring any additional debt!

First, they cut their cable. Used to watching The Daily Show, reruns of That 70's Show, National Geographic and the Food Network almost every night, they have disconnected premium cable and gone to basic local network programming (they still get the national networks + CNN). "After a couple of nights we hardly missed the television and have instead started playing more card and board games with each other," said Rick. John Stewart has been replaced with marathon grudge matches of Uno and Connect Four. This reduced their monthly expense from $120 to $15 - a savings of $105 - and gave them a chance to spend more time together as a family.

Second, Rick cancelled his gym membership - a savings of $38 plus gasoline - and bought a set of weights off Craig's List for $100. Susie is also a certified yoga instructor so they have allotted two nights a week to practicing yoga at home. This also saves a few hours a week in driving since Rick is not shuttling himself back and forth to the gym.

Cell phone plans have added minutes that are hardly used so they cut their package from 700 monthly minutes to 400 - reducing their bill from $95 to $75 - another $20 saved. Explains Susie, "Rick hardly uses his cell phone so it didn't make sense to spend money on minutes that were sitting there unused." Rick also stopped taking his clothes to the dry cleaner and has become an expert at using the iron. Aside from the cheap cost of spray starch, this has saved them approximately $50 a month.

Financial experts would tell you to pay yourself first but due the additional mortgage payment, Rick reduced his 401k contribution from 5% to 1%. He plans to increase it back to 5% once the condo in Cincinnati is rented but for the time being, this saves the family another $200.

Both Risk and Susie have student loans, which they are keeping current but Rick decided to put his into forbearance for 6 months - saving him $105 a month until summertime when hopefully the condo will be rented and he can resume his regular payments.

When it comes to food and lifestyle, the family has stopped eating out and now makes every meal at home. Rick packs a lunch to work most days, and spends about $5 on lunch when he doesn't. They have cut snack food almost entirely out of their budget and have limited their beer and wine consumption to the weekends - another healthy benefit of cutting back - saving them roughly $60 a month.

They have existing credit cards with balances but have consolidated them onto one low interest rate line of credit. Now instead of making three minimum payments, they only make one - a savings of $77 a month.

Finally, they put their entire tax refund into an interest-paying money market. It only pays a 2% return but that's better than the 15% decline the stock market has faced in 2009 alone. They plan to hold their cash until the crisis abates and then pick up the pieces - bargain stocks selling cheap.

All in all, these modest but clever cutbacks have saved the family a whopping $655 in monthly expenses - more than the cost of that vacant condo in Cincinnati. The family is able to stay current on their payments without taking on any additional debt and even has a little left over to spend on their daughter Zoe. Times are tough but with a calculator and a little willpower you can survive this recession, improve your health and well-being and get closer to your family. Sometimes all we have is each other!