Steve and Annette Economides and their five children, "America's Cheapest Family," have learned to live the good life, debt-free, on less than $35,000 a year. Here are a few of their secrets.
When Steve and Annette Economides got married in 1982, they were dirt-poor. Friends and family gave them some unsolicited advice on saving up: “They told me I ought to work two jobs, Annette should work one job, and we’d be in a house within three years,” says Steve.
Did they listen? Not quite: Instead, Steve took a single job in the graphics and advertising field for a mere $35,000 a year. After giving birth to the couple’s first child a year after their wedding, Annette decided to be a stay-at-home mom. Soon, another child was on the way.
For most families in their scenario, credit card bills would be piling up. They’d be living on ramen noodles, wearing threadbare clothes, and barely scraping together enough extra cash to buy a bus pass for the month.
Not Steve and Annette. Thanks to their super-thrifty ways, the resourceful couple was able to save up enough money to make a down payment on a house within three years, and to pay it off in full in nine. They’ve bought cars with cash, and neither of them has ever touched a credit card or been in debt, even though their family has now expanded to seven members. In fact, the Economides family’s accomplishments have so impressed the media that, for years, they’ve been known as “America’s Cheapest Family.”
Luckily, we’ve managed to divulge a few of their secrets. If you want to minimize your own spending ways, here are a few tricks of the trade, according to Steve and Annette.
Don’t buy on credit. One of the family’s philosophies is to “avoid debt like the plague,” says Steve. “We always say, ‘you can use creativity, or you can use credit.’” If there’s something you really want, don’t get sucked into refinancing options – search around for the best deal, and buy with cash. If you can’t afford it, don’t get it.
Use a system to control your spending. “Every successful company has one person who makes sure that money isn’t wasted,” says Steve. “Where is that in the home?” Most of us don’t pay much attention to day-to-day spending on things like coffee, meals out, or trips to the movies – and that’s where it really adds up, if we’re not careful.
To handle the finances of daily life, the Economides family recommends budgeting a certain amount each month for food, clothing, and entertainment, using envelopes full of cash or an online budgeting system like Quicken. If you put $100 in an envelope for clothing, that’s all you’re allowed to spend on clothes that month. If you go under, you’ll be rewarded with a little extra the next month. That way, you’ll always know exactly how much you’ve got to spend: “Cash doesn’t lie,” says Annette.
Shop around. For the best savings on all your household needs, “never buy retail,” says Annette. When it comes to Christmas gifts, the family likes to stick with closeout stores and wholesalers, like Big Lot’s and Costco, where you can find great deals on new merchandise. Online auction sites like e-Bay can also lead to great steals.
No matter what they’re buying, though, they don’t buy in to the myth “that spending lots of money equals love,” says Annette. One of her most popular Christmas gifts to give every year is a loaf of homemade pumpkin bread – almost free, but always a favorite. And as far as the little ones go, don’t go overboard on your spending: “Most kids prefer a bucket of water to a high-tech toy,” says Steve.
Embrace the frugal lifestyle. Though many of us eagerly devour every detail about Brad and Angelina’s new yacht or Nicole Kidman’s $50,000 Oscar gown, there’s no point in aspiring to that sort of luxury. “The truth is that most of them aren’t happy,” says Steve. To lead a satisfying life, “we have to live within our means and buy only the things that we really want.” So don’t break the bank to buy a 42-inch high-definition TV, when a 36-inch would work just as well, and leave you with enough spare cash to fill the fridge with groceries.
Want more great tips on how to live a good life on a shoestring budget? Check out the Economides’ website, and buy their best-selling book, America’s Cheapest Family Gets You Right on the Money: Your Guide to Living Better, Spending Less, and Cashing in on Your Dreams. We promise, it’ll be well worth the $9.32 price tag when it saves you thousands.