Gotta have that new iPhone or that pair of Manolos? Just make sure you’re not digging a deeper hole filled with debt. Welcome to the world of fiscal sanity and responsibility. Steve and Annette Economides of Scottsdale, Arizona — yes, that’s their real name — have a simple mantra: plan. Plan ahead. Plan everything — food, housing, clothing, entertainment, travel, even birthday parties. Create a budget and stick to it — especially in this tough economy. And look for price reductions, special offers, coupon savings and other deals to save thousands of dollars.
The couple, who married in 1982 — he’s Greek, she’s Italian — extol the virtues of disciplined personal finances in their newsletter, on their website and in bestselling books. They write and work from home alongside their five kids, ages 27 to 16, who are also on the budget bandwagon.
First called “America’s Cheapest Family” in 2004 when they appeared on ABC’s Good Morning America, Steve and Annette were then feeding their family of seven on about $350 a month. (That’s well under half of what an average family of four pays for groceries every month.) Six years later, that’s still their magic number. They grocery shop just once a month, and they pay for everything in cash, including their pre-owned cars.
One more thing: They have no credit cards. “We hate debt with a passion. If we don’t have the money for something, we don’t buy it.” The Fiscal Times talked with them a few days ago about their new book, Cut Your Grocery Bill in Half with America’s Cheapest Family (Thomas Nelson, $16.99), as well as their saving and spending strategies.
The Fiscal Times (TFT): Does paying cash for everything really work for you?
Annette Economides (AE): It might take us a little longer to get everything we want, but yes, it works. We have a more than decent quality of life. People are actually surprised at how ‘normal’ we are.
Steve Economides (SE): And some of what we have, we don’t even buy. For example, we’ve got a 23-foot boat in our backyard that doesn't belong to us, but we can use it whenever we want.
TFT: Spill the details of this, if you would.
SE: It belongs to friends who were paying $250 a month to have it dry-docked at a nearby lake. The man, who’s retired, became worried about the expense, but he didn’t want to give up the boat. So we suggested he park it at our house for free. All we asked was that he take us out on the lake a few times each summer. It’s great. He pays for the gas; we bring lunch, and when the transmission breaks on the boat — guess who pays for it? Not us!
TFT: What if you're someone who must must have your latte every day on the way to work, no matter what?
SE: Then you’ll need to change your attitude if you want to save money. If convenience is your most important priority — above putting money into a 401 (k), or paying off debt, or buying a house, or building up savings — you won’t change your habits unless you have something’s that more valuable. Get your priorities straight. I worked in advertising and graphic design for 23 years. I left it behind to start our home-based business because I wanted a better quality of life. Once you decide what’s important, you can create a system and a habit to support it.
TFT: Groceries are a commodity, you say. Explain.
SE: Warren Buffett compares the prices of businesses of comparable value. When he sees one that has good numbers and is below market value, he buys it. Well, Annette calls herself the “Warren Buffett of groceries.” When we see top sirloin that's normally $4 or $5 a pound drop to $1.50 a pound, we buy it — but not just enough for one week. We’ll buy 14 pounds of it, or 18, or even 30. We’ll put it in our freezer, and now we’ve got enough meat to feed our family for months.
TFT: Thirty pounds of meat — that’s hefty. Clearly you have more freezer space than most.
AE: Yes, but we didn’t start out that way. Our first freezer was nine cubic feet. Even then, we were freezing whatever we could. You can do what we do with a freezer of any size. The one we have today is a 25-cubic-foot chest freezer. We bought it at a steep discount. It’s like the secure vault at the bank. Better food, happier kids, money to pay your medical bills and car insurance—you can have the money for all of that once you make a change in the way you plan and shop.
SE: In other words, what’s the glory of earning $300,000 a year if you’re spending $325,000? You’re no better off than anyone else.
TFT: With Columbus Day weekend upon us, share tips for shopping smartly, especially as Thanksgiving, Christmas and Hanukkah approach as well.
SE: Food is easy. Almost every holiday has special foods that are discounted.
AE: Gifts are another story. Make a list of all those you want to buy gifts for and assign a dollar amount for each one. We break it down by category: spouse, kids, grandparents, extended family, and friends. And what about teachers and coaches? Having a gift budget is essential to reducing stress and saving time.
TFT: What about using coupons?
SE: Once you’ve made your list, start watching for sales and coupons. Check out the Black Friday websites — last year we got some great deals. Check the Sunday newspapers. Check manufacturer and retailer websites to sign up for email deals. Starting early is a great thing to do. Buying the things you need from non-retail sources can save a lot of money. We use Ebay, Half.com and Amazon.com to buy used books, textbooks, movies, CDs, and loads of other things, paying only a fraction of the retail price. We use Craigslist to buy larger items like cars, furniture, landscaping materials, Christmas decorations and more. Don’t forget garage sales — bargains and hidden treasures abound there.
TFT: Naturally all of this takes time and patience, which is at a premium today.
AE: Patience is your greatest money-saving tool. Make a list of the things you want to buy, then do research. You’ll eventually find someone who wants to desperately get rid of the very thing you want. Find that person — and you’ll find your deal.
TFT: One last question: How do you keep your energy up?
SE: Really? Our problem is trying to stay calm! The better the deal, the more excited we get. We also get a lot of exercise — yard work, weight training and walking at a nearby park. We enjoy free concerts at local parks. We go bowling with 99-cent coupons. We play board games at night with our kids during ‘family nights.’
AE: We are proof that you can live life to its fullest and not spend a fortune.