Reader Case Study: Yeah, But How About a Difficult Life?

Despite the fact that he wears mostly ripped jeans and installs his own sewer pipes, Mr. Money Mustache is occasionally accused of being a privileged upper-middle class elitist who doesn’t understand the problems of real people.

So this week we look at a call for advice from a reader with more challenge packed into her life than some of our past studies.

Dear MMM,

I’ve been reading your reader case studies and rolling my eyes here. Let’s get real. Not everyone in this world has a combined income of $100,000. Nor do they not have kids, or even just one baby. Please. Most people are raised without a lick of finances in their head. They only figure them out after receiving large amounts of debt.

But by then, it feels to late to change the tide. Most people get married when they are in their 20’s, then in a year or two they have a babe, making Mom’s education worthless for income, while Dad tries to grow up over night into the $50,000 year income he would like. Everyone harps on the new parents, “Your kid needs to be socialized, put him in daycare. Your kid should play T-ball, Dance, Soccer, and photography.” Meanwhile Mom and Dad decide they enjoy the babe and have more. Now, they have 4. While Dad works to pay off the hard lessons of debt, he supports the family on about $50,000 a year. This is reality for most people.

And for me. :). I wanted to challenge you to do a reader case study on real people who have it hard. Not easy ones who make over $100,000 a year and you’re thinking, “No kidding. Get rid of the Hummer.” I will type out my budget so you can see where you can “trim the fat” – for a challenge. Not because I feel that I really need the help – but you never know.

Income: Currently $50,000

Cars: We own 2. A suburban (paid cash) in order to drive once a week as a family, or haul our trailer to the dump. {Please note my husband is a Dealer for a tool company – it’s a franchise. The amount of card board we recycle fills a 10ft x 10 ft trailer every two weeks. The recycle center is 20 minutes from the house. I never go that way, unless it is to recycle. }

We own a gas saver car that gets 30 mpg, and can fit (in a tight squeeze) all 6 of us. We paid cash for this car and use it as the main car.

House: $1275. We tried to rent cheaper. They count the number of people living in a small apartment and there is a bit of a rush for rentals. After trying to be cheap as possible, we rented for $1500 plus utilities. Thus, we bought a foreclosure to fix up ourselves. At the peak, this house was worth $300,000. When we bought it the appraisal was $200,000 and we paid $180,000 at 4.1% interest, with no PMI.

Food: $1,000 a month. We eat mostly veggies, fruit and free range type meat. We do not buy prepackaged things, I am just feeding 5 boys. The government allows $150 per person on food stamps. We do $166. The extra is to allow for personal heygine, and snacks for extra activites. We do Cub Scouts once a week (the boys earn their own money to pay for it), and the snacks are for times when we have to run far from home (say 20 minutes). Un avoidably the children get hungry. So does my husband. :). Every time.

Here is the rest of the “budget”

Gas: 100
Insurance: 160
Student Loan: 90 ($8,000 left)
Bad Debt: 570 (I don’t want to talk about bad choices)
Life insurance: 35
Food: 1000
House payment: 1275
Trash: 25
Water: free – I have a well
Electric: 150 (I know this is high. It’s a remodel. It’s getting better every month).
Phone/internet : 80
Medical: 80
Cell Phone: 170 – my husband has one for his work. I’m going to look into what you suggested before w/google. I just haven’t yet.

Total: $3735

That leaves a difference of $529 – to cover clothes, shoes, and life. However, through it all we managed to save $5000 this year and used it to pay down debt.

Good luck!

MMM Replies:

Dear SF,

I’ll admit that your situation is not trivially easy like most of the financial problems of the middle class. And part of the challenge is that for the most part, you’ve started running things pretty well already.

You got what sounds like a great deal on a house with some upside – and the opportunity to build sweat equity with your own labor while you live there. You raise four kids on less than what some people spend on themselves. You have no car loans, small student loans, and aren’t blowing money by putting lottery tickets, booze, and manicures on credit.

But here’s what you CAN do:

The Bad Debt:

This is a recurring theme in emails I get these days: people have credit card debt, often at interest rates above 15%, and yet they are still going along merrily building an “emergency fund” in a 0% savings account, making extra payments on other debts or cars or 401ks or doing renovations. So let me remind you once again:

CREDIT CARD DEBT IS AN EMERGENCY!! It goes out first, before you engage in any other activity. Do not write to Mr. Money Mustache for advice if you still have credit card debt. My advice is: tap all possible resources, up to and including couch-surfing, prostitution and illegal drug and organ sales, to pay off your credit card debt first. After that, we can start fixing the rest of your life.

Since you weren’t an MMM reader when this was racked up, you are hereby forgiven for whatever you did. But a $570-per-month payment at your level of income is spectacularly high, and thus it needs to be treated like an emergency. If you’re not already doing so, all extra payments should go to this high-interest loan (while making only minimum payments on the student loan and mortgage). And any luxuries that can be cut or savings made (see below), should be fired at this debt too.

The Cars:

I didn’t get the financial details of your vehicles, but they’re still worth scrutinizing carefully. A Chevrolet Suburban is a pretty useless vehicle – a minivan has larger capacity, plenty of power to pull a trailer, and uses far less gas. But if your Suburban is an old model worth less than $2000, and you drive it less than 20 miles a week, it might still be an fine choice because purchase price is more important than fuel efficiency for vehicles you rarely use. As a note to other big-family readers, there are some great small 6-passenger vans out there that are not behemoths – check out the Nissan Quest from around the 2001 model year range as an example. (My neighbor recently sold one in fine working condition for $1200 to buy an unnecessary $19,000 Subaru Forester).

Similarly, I assume your other more efficient car is a low-cost one (under $5000), and that you’ve already replaced all adults-only trips under 4 miles with bike/bike trailer trips.

Make sure you’ve shopped around thoroughly for car insurance (check Geico), and consider dropping collision/comprehensive insurance if you haven’t already. If that “$160/month” figure is mostly for car insurance, there may be huge savings available as my own car insurance is in the $20-$30 range.

Potential savings in this area: $50-$200/month.

The Food:

You’ve got about twice as many mouths to feed as me, but considerably more than twice the food budget. This might be worth looking into, since we eat a balls-out luxury diet in the MMM household that only became so flashy after we reached retirement. Costco should be your best friend. Rice and beans and potatoes can be very luxurious when cooked with skill. Coconut and olive oil are incredibly cheap on a per-calorie basis, yet great for your health. So make high-fat meals. Free range meat? Depending on the cost, I probably wouldn’t be buying that right now, until the emergency is lifted. Even now I feel just a little ridiculous when I buy a bit of organic chicken or ground beef, because it is so expensive, resource-intensive, and unnecessary. So I do it only once a week or so. There are MMM readers reading here right now that feed six people with Royal Family quality on less than half of what you’re spending – look to them for inspiration!

Potential Savings: $200-$500 per month!

The Phones:

As you have acknowledged already, that part of your spending is Off The Hook. You’re not Sir Richard Branson, running the Virgin Mobile company and needing to host data-intensive videoconferences from locations worldwide at a moment’s notice. You can have two phones on a modern plan like Republic or Google Fi, they’ll cost you about $10-20 and use your home internet access for long calls when you’re home.

Potential Savings: $150/month


$150/month might be reasonable if you are stuck with electric heat and you are running in the winter season. But watch out for unnecessary electric use: keep the house below 68F in winter, avoid A/C in summer if possible, hang-dry clothes when you have time, and ditch any incandescent bulbs unless you are benefiting from the heat they kick off. Our family is down to under 200 kWh/month, which works out to under $20 (although with natural gas heat and cooking).

Potential Savings: $100/month


$80/month. Wait a minute, didn’t we already cover phones above? If you have cell phones, you don’t need a land line. You can get unlimited free calling from home with Google Talk. Hopefully, with shopping around and negotiating, you can get an internet-only account for $50/month or less.

Potential Savings: $50/month

Finally, the remaining elephant in the room is INCOME! You’re making 50 grand per year right now, but that should not be viewed as your upper limit. Maybe you have skills that can be applied to a side-hustle on weekends. Maybe your husband can advance in his business or another one. And eventually, your kids will grow old enough to need less care, and free you up to work more in the future. And thus, the future is bright. Just be sure to capture any additional income for savings, rather than lifestyle inflation.

With potential savings of $550-$1000/month, you have the opportunity to double or triple your savings rate. Since your current rate is about 10%, you would be cutting about 13-22 years off of your mandatory working career, reaching financial independence that much sooner. As debts and the house get paid off, this will only accelerate.

This is also a great lesson for readers who are not yet in a situation like this. Your financial life works out much better if you get your shit together before having kids, not afterwards. Before parenthood, you’re free to work as many hours as you like, live in any amount of space or even on the couch of a friend, stay up all night to further your education, and more. Use this precious time to get ahead – your future self will thank you for decades to come.

As soon as the kids hit, everything goes out the window and you need to begin anew. I like to think of each child as a 12-hour-a-day job. Two parents can share a single child and even have a bit of time to work. Barely. Beyond that, things start overlapping and stress builds. You can handle it, of course, but if you have the option, you should still get your shit together before having kids. It is worth it.


A Call to All Past Case Studies:

Your fellow readers have been asking about you! If you were in one of these articles in the past, and have news to report back, please send me an email through the contact form. Impress your Mustachian colleagues, or embarrass Mr. Money Mustache for being too optimistic. It would be great to follow up occasionally, and see how things have changed for you over the past year.


  • Leslie January 9, 2013, 5:36 pm

    I only make $21,000/yr. I have several college degrees but am doing work that I love and am passionate about. I also live in one of the most expensive states (housing is beyond affordable! and food is super expensive – even the off brand stuff!) and rent a small 500 sq foot place for $700/month (includes utilities, cable, internet). I have grad school debt and 1 credit card debt. My vehicle is currently out of commission as it broke down with 110,000 miles on it and it will take $3,000 to repair it. so I am biking/walking to work. And yet I don’t see how it is possible to become a “millionaire” anytime soon. It is just me & my dog yet I feel as if I am barely keeping my head above water financially as it is. To me, anybody who makes $50,000 is a very rich person and doesn’t get what it is like to be a normal, hard-working American who can barely make ends meet but makes too much for any assistance like food stamps. How in the world does your “plan” work for people like me?!?

    • SwordGuy January 9, 2013, 10:18 pm


      The plan works the same for you as it does for anyone else. Spend less than you make, pay off your debts and invest the surplus.

      Find ways to spend even less, invest the surplus.
      Find ways to make extra money, invest the surplus.

      Lather, rinse, repeat.

      It seems like everyone who is first starting off believes they live in a high cost area and that everything costs too much. Generally, it’s because they are buying things they don’t truly need and paying a premium for it. Start a journal of your own in the journal section of the forum and detail what you’re financial situation is. Debts and interest rates for each, Assets you could sell off – like maybe that car! What you spend your money on and how much.

      At that point, folks can start to give more detailed advice.

      Best of luck!

      • Leslie August 14, 2013, 9:02 am

        Thank you for your suggestion regarding keeping a journal of what I spend. I have begun doing this and am beginning to find ways to save more money. It has been a slow process this year, but I have begun to pay down some of my debts. And I am currently applying for other higher paying jobs. :)

    • mysticaltyger August 14, 2013, 2:08 am

      You can’t afford a dog if you’re only making 21K per year in a high cost state.

      • Leslie August 14, 2013, 9:00 am

        She is my therapy dog. Selling her is NOT an option. Please see my below reply to David. Thanks! :)

  • David Wendelken January 10, 2013, 9:19 am


    I think you may have a host of unchallenged assumptions that need to be examined. You didn’t supply a lot of detail so some of these comments may not apply, but I hope they help:

    1) You live in an expensive area. Why? There are plenty of low-paying jobs in less expensive areas. Can you move there and do the work you love doing?

    2) Do you live in an apartment by yourself? Why? One or two roommates could cut your housing expense considerably. With a bit of effort, you might actually make some money on the roommate deal.

    3) If you get roommates who have furniture of their own, you can sell your now surplus furniture and pay down some student loans. You didn’t mention how big your loans are. Can you get a public service deferment on a portion of the loans? Check it out.

    4) Rice, beans, and other bulk foodstuffs are not expensive anywhere for someone with an income of $21,000 a year. Why are you buying expensive pre-packaged food? Can you grow your own vegetables?

    5) You have a car yet live close enough to work to bike there. Why do you still own a car? You can’t afford one at your income level if you want to get ahead. The savings in payments, repairs, gas, oil, and insurance will be like getting a big raise on top of whatever the car sells for.

    6) You have several! Degrees and are working in a low-paying job. Why is it low-paying? Could you get a raise where you work? What do you have to do in order to get a raise with your current employer? Could you get a raise at another employer for doing the same job?

    7) Can you get a second job and use that money to pay down your debt faster? Just getting those debt payments off your monthly budget back might equal a really nice raise.

    8) You should be treating your school and credit card debt as a “your hair is on FIRE emergency!”. So what if you like your main job! Could you get a better paying job and do what you like to do as a 2nd job or as a hobby until those debts are paid off and you’ve built up a stash of cash? Or just buck up and deal with it if you can’t pursue the job you like for a few years while you get your financial house in order?

    9) Where does the money you make all go? Do you have a lot of expensive tech gadgets or phone plans you don’t really need?

    10) Cable comes with the apartment. Does it have to? Could you get a price break if you forego the cable service?

    11) You don’t need millions of dollars in investments to support an income of $25,000 a year. Read up on this site how much you really need to save in order to get that kind of investment income.

    • Leslie August 14, 2013, 8:59 am

      Thank you for your response and I do apologize for the great absence on my part in responding. I have been dealing with serious medical issues since I originally posted. I realize that I did not post a lot of specifics regarding my situation and thought I would do that now to better explain my current situation….and receive any further advice.

      I will try to provide specifics and try to answer each of your points/questions…..

      Annual Take Home Income: $21,0000/yr

      Credit Card: $3,684.00 I have worked to pay it down to this amount so far and have been throwing extra money at this debt each paycheck as I am able to do so.

      Medical Debt: $610 left. I have been dealing with serious medical issues that have led to multiple ER visits, medical tests, medication, and an upcoming medically necessary surgery.

      Car Loan: $6,4000 I bought a 10yr old used SUV to replace the broke down vehicle. I have to have a vehicle for my job as I sometimes have to transport multiple people. I am also an avid outdoors person and do a lot of body boarding, camping, hiking, kayaking, photography, etc. The kayak is stored on top of my vehicle and all the camping equipment is stored inside the vehicle.

      Graduate School: unknown loan amount at this time as I am currently still in grad school. I graduate in December 2013 (yeah!!) and will find out in January 2014 what my student debt is and what the monthly loan payments will be. I made the decision to go back to grad school in order to get a higher paid job. And halfway through my degree, I also made the decision to switch careers from non-profit counseling to pursuing a position as a professor. Once I complete my Masters, I will qualify for professor positions at local colleges/universities.

      Rent: $700/month all inclusive. I live on top of a business in a small studio apartment of 500 sq ft. They had wanted to raise my rent back in May when my lease was up, but I was able to negotiate and keep it at the $700. All utilities, washer/dryer, internet access/cable access is included so there is no added extra expenses on that end.

      Groceries: I usually spend anywhere between $50-$100 a month on groceries, but have had to increase this slightly recently due to my medical issues as I can only eat certain foods. I do NOT eat packaged foods as I love home-cooking. The high cost comes from eating fresh fruits & veggies and eating wild-caught salmon & tuna and all natural chicken (I cannot eat pork or other meats high in salt content). Living in Florida, the meat and produce costs are pretty high but I have just located a Save-A-Lot store where I can buy cheaper priced produce. And I get my meats from Publix.
      Cell Phone: $90/month. I have a contract and am unable to do anything about this for the time being.

      Car Insurance: $67/ month. This is much lower than it was earlier this year as it has taken me months to negotiate with my insurance company. I am realizing that things are just more expensive when living in Florida compared to living in Iowa (where I am from originally).

      Netflix: $21/month

      YouFit gym membership: $21/month.

      I do have a Roth IRA that I have stopped putting money into this year so that I can use that monthly contribution toward knocking off my debts. I think there is about $6,400 in the Roth IRA right now as this is something I had just started doing 2 years ago.

      I also have $400 in savings. I had a $1000 emergency fund but had to use $600 of that just last week to pay for more medical tests as my health insurance has a high deductible that must be met first. Due to ongoing medical expenses right now, I have to try to keep something in savings to cover my copays for medications, doctor visits, and any further medical tests, deductible payments, and now this upcoming surgery.

      Yes, I do have a dog but she was a gift to me 6 years ago when recovering from a serious car accident in which I was hit by a drunk driver and underwent multiple surgeries and months of physical therapy to learn to walk again and use my arm/hand again. She helped me through a dark time in my life and continues to be my therapy dog today. Selling her is not an option.

      As I mentioned before, I am currently applying for other jobs that offer a much higher salary. And I have decided to stop working in the non-profit realm of counseling as, to be honest, I am burned out from my current employer taking advantage of my willingness to help out all the time without a raise. I have asked and asked for a raise, but have been told that they will not give me or anyone else a raise.

      Yes, I live in Florida. I moved here 3 years ago for health reasons. It is definitely not a cheap state to live in but my health is more important to me. No, I do not have any roommates. This is the only area in which I refuse to compromise. I had enough bad experiences with roommates in my undergraduate school years that the thought of having another roommate stirs up a lot of negativity. I don’t trust people, plain and simple, as I have been burned too many times. Also, the $700/month studio apartment I do have is considered very cheap in the city I live.

      I have no time for a second job because I am in graduate school. I have a difficult time as it is balancing work, grad school, and my medical issues right now. But I did sell a few photography prints to make some quick cash to pay down the credit card debt.

      I know you asked where does most of my money go, and the answer really is that most goes toward paying for my medical issues, past vehicle repairs, and this new diet I have to be on now per doctor’s orders. Any extra money I do get each paycheck I have started to put toward my credit card debt. I want to get that knocked out first because of all those stupid high interest finance fee charges.


  • bob werner July 19, 2013, 8:10 am

    Sell house net 80 k. Negotiate debt to 1/3. Save 550 on food and 500 other. Pay off student loan. Invest the 40 k and u will be sitting 2000 a month in the black. After 1 year move to Midwest.

  • midwestgal July 21, 2014, 8:16 pm

    This blog intrigues me because it teaches you efficiency and getting the most for your time and money. Teenagers can use this sentiment at their early age, just have to bring it to their level. How can I get that college education and save for my future needs at the sane time. This is the question I had when my dad informed me there is no college fund there is only you. So I went to state schools, worked at a movie theatre ( free snacks and movies) and lived at home for free. I have survived divorce layoffs and single parenthood by living within my means. Now I am in the fast track to do.

  • Array March 7, 2018, 5:06 pm

    this link given in the article appears to be broken, http://www.mrmoneymustache.com/2012/10/11/our-new-10-00-per-month-iphone-plans/

    excellent write-up otherwise.

    • Mr. Money Mustache March 8, 2018, 8:18 am

      Thanks Array! This is a very old article, but I fixed that link to reflect more modern phone options.


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