By Alexis Yancey, KERA Reporter
http://stream.publicbroadcasting.net/production/mp3/kera/local-kera-877970.mp3
Dallas, TX –
The move to easy credit in America created a lifestyle of luxuries. Consumers could have what they wanted, using plastic now and promising to pay later. But recession layoffs have forced numerous families to live on less. In today's economy segment, Alexis Yancey reports on how one family is meeting that challenge and living simply.
Tracy and Barry Williams changed their lifestyle six years ago. Not because they wanted to, but because they had to. Barry is one of the many American Airlines employees who've sacrificed wages to save their jobs and company.
Barry Williams: We took a pay cut. And everything had to downsize after that because it's about $600 a month that we lost.
They immediately worked on ways to live more simply.
Tracy Williams: We gathered up all of our bills and we tried to look at where we could cut back. We started out by getting rid of one of our automobiles.
In addition to selling one car, they refinanced their modest home. They also cut back on phone services, electricity, washing clothes, movies, yard work, eating out, brand name food and more.
Tracy Williams: I used to run around from different store to different store getting a sale on this and a sale on that. Now I go to one store and I have my ads with me and they honor those prices.
Tracy's continuing quest to spend less prompted her to attend a managing your money class at Consumer Credit Counseling Services.
Linda Davis: You use coupons?
Navigate the recession with KERA! Get tips on avoiding foreclosure, access job resources and more at kera.org/economy.
Tracy Williams: I go to the grocery store once a month and I organize my coupons before I go and have them organized by the aisles.
Consumer Credit Counseling Services educator Linda Davis teaches the class.
Linda Davis (in class): The main idea is that you have a form of tracking what your expenses are. All the little things add up very quickly. But more importantly matching what you make and what you spend.
Davis says tracking your spending is a critical step in learning where families can find ways to simplify their lifestyle.
Linda Davis: Keep receipts. I like keeping a basket at the front door and as you come in everyday throw your receipts in there and sit down whether it's once a week or once a month and go over that make sure your budget is reflective of what it is you're spending.
When families lose income, Davis says prioritizing a budget into have to's, need to's and want to's is essential. The want to's usually are luxuries the family can forego.
Linda Davis: You're looking at everyone's wants and needs, what their have to's are. You have to know what you have coming in so you know what should be going out, not what you want to go out, but what should be going out according to your budget. And having a budget and sticking to it that's the most important thing.
Tracy and Barry say one of their have to's is making sure their teenagers, Barry Jr., who plays football, and Brandy, who's on the drill team, can participate in their school activities.
Tracy Williams: We'll make the goal $200 right now for you to take to San Antonio for the competiton, ok?
Brandy Williams: I said $200 because $300 would be good too.
Barry Williams: Maybe she can ask her grandparents for the extra but we're going to stay with the budget here. $200 is good.
Brandy Williams: Granny can give me $20 and Auntie can give me $10, then I can make $50 more.
Barry Williams: Great.
Staying with their simpler budget helps Barry and Tracy save for unexpected expenses - and in case their income taxes another hit.
Barry Williams: You have to be prepared. You always have to be prepared for the dark days, what I call them.
Tracy Williams: I've never had to live paycheck to paycheck before, I've always had money in the bank and it's taken some getting used to, it really has.
Consumer Credit Counseling's simple budget guidelines are 31 percent for mortgage costs or rent, 12 percent for credit payments and 57 percent for all other living expenses, including savings.
Learn more about free money management classes, tips on how to create a budget and more resources for North Texas families at KERA.org/economy