Families Who Save Together

The McDermotts are trying to insulate their family from an uncertain economy as much as possible—the only difference between them and most of us is in a few months their family will nearly double in size. “We have an almost two-year-old daughter and we are currently almost 20 weeks pregnant with twin boys—pretty crazy,” Stacia says.

Having three children under the age of 3 in daycare doesn't make financial sense to the McDermotts, who already try to live on a lean budget. That means Stacia is going to cut back her full-time work hours to a few evenings a week and start looking for more ways to save money around the house. Breastfeeding and making homemade baby food are two of Stacia's top money-saving priorities, and she says they're healthier options too. "My hope is to make all of my baby food. Obviously, for convenience' sake, it is nice to have a few jars of store-bought stuff around when you are traveling, but when you are home, those are the things you can be committed to," she says. "All you need is a food processor and some time, and you can make a ton of it and freeze it, put it in ice cube trays in your freezer and warm it up [when you need it]."

The McDermotts just refinanced their house, saving them $150 a month on mortgage payments, and they don't have cable or personal cell phones. "In general, we just try to consume less, buy stuff that is used and share with people," Stacia says. One used item Stacia will be putting to use is a refurbished double breast pump, a hand-me-down from a friend. Most of the maternity clothes she wears are part of a collection shared between her friends too.

These little changes add up to big savings, and while it takes some extra effort, Stacia says she's happy to do it. "They're small choices. It's all about what your priorities are," she says. As they await the birth of their twin boys, the McDermotts are looking for more money-saving ideas, and we've found some that you might want to consider too.

Join a baby-sitting co-op.

Babysitters typically charge $10 or more an hour, making it tough to justify a date night when you're pinching pennies, but babysitting co-ops are free.

"You use [the co-op] as much as you want or as little as you want, but I would say you'll save easily $100 a month," says Gary Meyer, author of Smart Mom's Baby-Sitting Co-op. According to Gary, babysitting co-ops are usually an organized group of women from the same neighborhood, church or circle of friends who take turns watching each other's children free of charge.

When Gary's wife joined a local babysitting co-op in the late '90s, his family of five felt financial relief immediately. His wife, a full-time mom, also started to feel better emotionally and was able to make thriftier choices while running errands because she didn't always have three kids in tow. "It's one thing to have the convenience of babysitting co-ops, so that you can have dates and dine out and don't have to pay $50 bucks for the sitter, but it is another thing to have peace of mind and plan your errands out [so you can] shop wisely," Gary says. Here are some tips from Gary on starting a babysitting co-op:

• Start small. You can start a co-op with just two or three friends or neighbors who live within a driving distance of 15 minutes or less, then later grow to a group of 10 to 20.
• Be selective. Try to find women who have a similar parenting style as you, and make sure their homes are safe and clean.
• Use the point system. Most co-ops work because they run on a point system. Every time you sit for someone, you earn points. When someone sits for you, you lose points.
• Dads can join too. Co-ops aren't just for moms. As long as everyone in the group approves, dads can be part of a babysitting co-op too.
• Set day and night rules. If you request a sitter during daytime hours, you should drop your children off at the sitter's house. If you request a sitter in the evening, you should expect the sitter to come to your house so your kids can be put to sleep in their own beds. You will be charged more points for an evening sitter.
• It isn't daycare. Most babysitting sessions last just two to five hours, long enough to run errands, meet up with friends or go on a date. Babysitting co-ops are not replacements for daycare.
• Learn more. If you are interested in starting a co-op, you can download a free startup kit from Gary's website, BabysittingCoop.com.
  

How to save money on food.

Many of us already take brown-bag lunches to work instead of going out to eat, but Jeff Yeager, author of The Ultimate Cheapskate's Road Map to True Riches, says you can make your packed lunches cheaper by rethinking the ingredients you use.

"Lunch meat is a real rip-off," Jeff says. Instead of spending $6 to $8 a pound for turkey breast from the deli, Jeff says you should pick up a whole turkey breast from the meat case. "I just bought a whole turkey breast for 99 cents a pound, and I''m going to roast it and slice it into lunch meat the good, old-fashioned way. It's cheaper and tastes better too," he says. Jeff offers a few more tips that will help lower your food bill:

• Check the international food aisle for bargains. "Many Americans don't go down that aisle or to ethnic markets, but many staples, like rice and beans, are cheaper in that aisle than they are two aisles over, and that is because it is an off brand," he says. Items like canned tuna are often a bargain in the international aisle, and condiments like hot sauce can be more than a dollar cheaper than popular brands.
• Invest in a slow cooker. "A slow cooker is a great way to take inexpensive ingredients, like cuts of meat that could be tough, and make it taste great," Jeff says. You can put the ingredients in a slow cooker in the morning, and by the time you come home from work, dinner is ready. Jeff says slow cookers don't cost much to run. You can use one every day for 8 hours for just 25 cents a month.
• Always ask for a rain check. If a sale item you want is out of stock, Jeff says you should always ask for a rain check and make a point to get the product at the sale price when it is back on the shelf.
• Reuse stale bread. "It sounds quirky, but my great grandmother was big on stale bread," Jeff says. You can use stale bread to make bread crumbs, bread salads, French toast, croutons, bread pudding and more. If you really don't feel you can eat stale bread, Jeff says you should take it outside and feed it to the birds.
  

Save money on laundry.

Most American families of four spend nearly $4,000 per year on their wardrobe, and while some families can certainly cut back on their clothing budget, Jeff says you can also save a lot of money by changing the way you launder your clothes.

• Get a clothesline. Dryers cost a lot to run, but a basic clothesline and some clothing pins are quite inexpensive, Jeff says. You'll not only save money on your gas or electric bill by using a clothesline, but you'll also prevent your clothes from shrinking and keep them looking and smelling fresh.
• Only wash when necessary. Some clothes, like jeans or sweaters worn over long-sleeved shirts, don't have to be washed after each wear, Jeff says.
• Use cold water. Jeff says cold water not only costs less to use, but it's also gentler on most fabrics.
• Zip it up. If you don't zip up jeans and jackets before you wash and dry them, Jeff says you can cause costly snags and tears to your clothes.
  

Rent a room in your home.

While it's pretty common to let friends or family members stay in a spare room for weeks or months at a time, some people are now renting out rooms in their homes to strangers. Ryan Cowmeadow, with the National Shared Housing Resource Center (NSHRC), says the home share program he coordinates in Michigan has had more than 500 inquires in the past nine months.

"[Home sharing] has become a viable option for senior homeowners who are looking to increase their household incomes, off-set utility costs [and] supplement retirement income, which may have been decreased due to the slump in the economy," Ryan says. "This program is also a great option for persons who have been affected by the economic downturn who need affordable housing options."

Whether you are a senior or a family of five, before you open a room in your home to a renter, here are some things to keep in mind from the NSHRC's board of directors:

• Get help from a local organization. Go to the website NationalSharedHousing.org and find an organization in your community that specializes in matching renters with homeowners.
• Screen renters thoroughly. If there isn't a shared housing organization in your community, you can advertise your room for rent on Craigslist, community bulletin boards and more, but you must carefully screen each candidate who contacts you. "If you have a family member or friend who can help, it's always nice to have a second opinion during the screening and interviewing process," says Kirby Dunn of HomeShare Vermont.
• Keep landlord/tenant laws in mind. There's often no lease involved in home share agreements, and most agreements are on a month-to-month basis, but Kirby says you should be aware of landlord/tenant laws in your state.
• Know going rental prices: According to the NSHRC, you can typically charge a renters fee of about $400 to $500 per month, with utilities, laundry and kitchen privileges included, in a house share situation. You can also request chore assistance from your housemate and subtract $10 per hour off the rent.
• Be flexible. "You have to be a giving person, and you have to be extremely respectful of one another's privacy," says Eva Gertzfeld, housing counselor at the Center of Concern in Park Ridge, Illinois. "But, it is a win-win for everyone. It brings affordable housing for people who are looking for such, and it brings an amazing enrichment in life for both [the renter and homeowner]."
  

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