getting started with frugal living

[bluebird728]

Hi all,

Without going into the whole story of how I got here, I am now a single mom with two teenagers who wants/needs to learn how to live frugally.

Not quite sure where to go next, and I'm hoping for some pointers in the right direction. Here is where I am now and what I have done so far.

Using cash on hand from various sources and my home equity line of credit (lower interest rate) to pay off credit cards. Hope to have them paid off within the next three months.

Using MS Money to start to track where my money goes and I'm working on developing a monthly budget.

Have told the children that we will be on a set budget starting next month - giving them some advance warning to get them (and me) used to the idea.

Wondering what to do about my student loan. No other loan debt except the mortgage and home equity line of credit. Planning to sell my too large house with it's too large mortgage next year after my oldest graduates from high school.

Starting to clip coupons and wondering how every buys groceries for so much less than what I am spending. Wondering how to save on insurance, especially with a teenage driver.

How do I figure out how much emergency funds I need? And where is the best place to keep it?

I think we are in pretty good shape, but being on my own scares me. I feel like I have so much to learn and it is a little overwhelming. Could use some wisdom from others further down the path of frugal living than me.

Thanks

[dcompton]

It sounds like you've made a really good start. And your kids are definitely old enough to understand and help out!

As for the emergency fund, I keep mine in an online savings account. I use Emigrant and HSBC, but there are a lot of fans of ING here as well. I would definitely look into these options. You get good interest, the money is accessible, and they require no minimum so you can start small if you need too. If it becomes very substantial, you might want to consider investing it in other ways, but this is a really good way to begin. A lot of people here have used, at least in part, the ideas of Dave Ramsey, who recommends keeping a minimum emergency fund of $1000. But ultimately you should aim for at least several months expenses. As you work out a budget and live with it for a while to fine tune it, you will soon know exactly how much that would be. It will vary for everyone, of course. How many months you should have depends at least partly on how vulnerable you feel you are to loss of income, for whatever reason.

There are some real grocery pros here -- they will surely have advice and there are old threads around that should help too. I'll let them direct you to them. And I know nothing about student loans, so someone else will have to make suggestions there.

You've come to the right site for information, support, and encouragement. You can definitely do this!

[AheeK]

It sounds like you've got a lot of good ideas going already, and joining Frugal Village is a great way to learn more! The people here are awesome! If there's a specific question you have, there's probably been a thread on it at some point, so you might want to try out the Search option at the top of the screen.

The best way I've found to manage savings/emergency fund is to pay into it FIRST, before paying anything else. If you wait until the middle or end of the month, the money always seems to get spent and nothing is left for savings. If you want, you can check with your bank about automatic withdrawls, where they will take a set amount off every paycheck and put it in a separate savings account. Treat it like a bill that must be paid every month and watch the savings grow! Also, be sure you treat that money as off-limits except in a true emergency. Once you get a substantial amount built up, it's very tempting to blow it on something, but keep in mind that money is there for a reason and you'll be very glad it is should something unexpected happen. Good luck!

[lullaby80]

Just wanted to say welcome! And that there are lots and lots of good advice on this board, many people can definetly help you out with the grocery budget and stuff.