How to live well without busting the budget

by Autumn Giusti

I used to buy CDs by the dozen. My two-week salary from my job as a barista would vanish after one alcohol-infused night out. And any leftover spare change paid for lunch or dinner with friends.

That was before I met Mike Giusti.

Mike, who is now my husband and partner in frugality, taught me how far a dollar could stretch.

Mike scrimped his way through four years at Loyola University. His parents supported eight children on a schoolteacher’s salary, so he paid his entire $12,000 tuition through a combination of scholarships, Perkins loans and grants (not to mention various and sundry deals with the devil).

His grants gave him a surplus of about $3,000 a year -- which he used to cover rent and meals. Because his aid was based on a federal formula dictating that he would lose around $2 in aid for every $1 he earned, he couldn't afford to get a job. If he lost his financial aid, there was no family surplus to bail him out.

I, on the other hand, was a conservative suburbanite who could always count on Mom and Dad to slip me $20 when the cash flow ran dry, not to mention foot the bill for most of my education. The fact that Mike was penniless was completely lost on me for more than a year.

Over time, it began to sink in. I started using my fun money to pitch in with Mike’s groceries and keep his creditors at bay. Pretty soon, I, too, had to learn to live on a lean budget.

That meant cooking at home instead of ordering takeout, finding sustenance on the free doughnuts and cheese cubes served at Loyola’s myriad functions and sneaking into the communications building after midnight to steal tire-size rolls of toilet paper from the women’s bathroom. (It was a little rough, but got you through the tough times.)

These days, Mike and I can afford our very own family pack of double-quilted Charmin. We are both gainfully employed in the world of editing and publishing, and now I’m the one leaning on Mike for the better part of our household income.

Not having much money teaches you how to stretch what you do have, though, and a lot of our college money-saving practices -- minus the cheese cube dinners and sand paper-grade toilet paper -- still apply. After all, we’ve still got all those Loyola loans to pay off (to the tune of about $60,000), not to mention two car notes, a mortgage and a home equity loan.

It takes a lot of discipline, but we’ve also learned a few tricks along the way.

1. Be a thrifty gourmet. We’ve upgraded from ramen to rigatoni, but we still cook at home almost every night. It’s not always easy to hover over a hot stove after a long day or a busy evening, but we’ve come to look forward to balanced, home-cooked meals. Besides, you’re not going to get your day’s nutrition from a McNugget.

2. Go discount shopping. These days, clipping coupons only goes so far. Since rising gas prices and $6 jugs of orange juice - thanks to last year’s Florida hurricanes - have begun to squeeze our budget, we started shopping for our staples at Save-A-Lot. Discount grocers like these can be a godsend when you’re down to that last 10-spot at the end of the month. One our last trip to Save-A-Lot, a cart full of produce, no-name-brand canned goods and multiple impulse buys (mmm ... marshmallows ...) set us back about $30.

3. Pace out restaurant visits. People don’t realize how quickly money adds up when you’re dining out. Even at The Olive Garden, two entrees and an appetizer, plus tax and tip, can eat up $50. We set aside $200 a month to pay for dates and dinners out -- that includes everything from Jazz Fest tickets to Frappuccinos. It sounds like a lot, but it goes fast.

4. Start a ‘fifth week’ fund: Have you ever noticed that every few months you get an "extra" paycheck? Since there are 52 weeks a year and four weeks in an average month, four months of the year have a fifth week. If you get paid weekly, that means you get four extra paychecks a year. During leap year, it’s five paychecks. Since most of only get one mortgage bill and one utility bill, we essentially only rely on four paychecks for our monthly expenses. There’s no reason to squander that leftover extra cash on your Wal-Mart habit.

We set aside our fifth week paychecks every year to pay for travel and gifts. When that paycheck comes, we send it straight to the savings account without letting it get comfortable in our checking account. That way when vacation time, Christmas or Maw Maw’s birthday rolls around, we’ve got money in the bank.

5. Divide and conquer: It’s far too easy to blow a big raise or bonus on expensive toys and $9 celebratory martinis. Stop and think before you bust open the bubbly. Anytime you receive a financial windfall, divvy up your newfound dollars into thirds. Put one third toward savings, one third toward debt and use the remaining third to treat yourself. You’ll reward yourself for a job well done while taking advantage of that 401(k) matching you swore you’d use.

6. Balance transfers: Not just for delinquents anymore. Transferring our credit card balances to take advantage of lower interest rates has been our single-biggest money saver. We had substantial credit card balances -- a car note, part of a renovation, medical bills and moving expenses -- that we have since consolidated to credit cards that charge us between 1.9 percent interest and 3.9 percent. We save $285 a month in interest alone, compared to standard credit card interest rates. (And in case you’re wondering why we‘re crazy enough to have a car note on our credit card, we transferred the note to our Visa to get -- you guessed it -- a lower interest rate.)

7. Stick it to the credit card companies. We’ve all been at their mercy long enough. It’s time to take back at least a sliver of what they owe us. Credit cards that offer cash back or other rewards are a great way to be financially responsible and rack up some extra dough -- or frequent flyer miles, a Disney World vacation, a charitable donation -- in the process. If you charge all of your monthly expenses on a 1 percent cash back credit card that you pay off at the end of each month, you’ll have accrued a couple hundred dollars before the year’s over.

I may never go back to my days of binge shopping, nor do I think I would want to. But our frugal ways have still afforded us leather furniture, an iBook and a yet-to-be taken trip to Europe -- all of which have been paid for in full. I think we’ll manage.