This week, I’m interviewing a close friend of our family named Carrie. It was Carrie’s earlier guest post on cloth diapering that inspired us to try it. Carrie is a stay-at-home mother with a husband whose career pays irregularly, meaning they tackle a very uneven rate of pay along with many opportunities for saving money. Beyond that, her family has adopted a huge number of green-oriented solutions for food and household care - they eat organics, do cloth diapering, and so on. Even more so, many of these ideas are guided by her faith. Thus, I thought it’d be interesting to have a conversation with Carrie about some of these issues - and you’ll also find that Carrie’s perspective and mine diverge in several areas.

What were your reasons for choosing to be a stay-at-home mom?

I think it’s important for a child’s parent to be able to be the primary daytime care-giver for young children. I was strongly influenced by my family situation growing up, where even though both my parents worked or were in school full-time, we were always in the care of one of them. So, I’m not personally tied to being the primary caregiver, but (here comes reason 2) since my husband’s work schedule is usually unpredictable and takes him away from home, it makes sense for me to stay at home, both so our child(ren) can have a parent available at all times, and so we can have the flexibility to spend time with him when his schedule suddenly opens up, and he is home unexpectedly. Finances were not a significant factor in making this decision.

Do you feel that the stay-at-home choice is causing an economic disadvantage for your family?

No, I don’t feel like we’re at an economic disadvantage. While we would most likely be bringing in more money if I were to work outside the home, our current situation fills our needs. I think that perception of economic disadvantage is highly situational, and personal. If we were in a situation where my husband was making a significantly smaller income, then strictly from an earned income point of view, we might indeed be at a disadvantage, compared to others. Some families are in a situation where even after the costs of daycare and work related expenses are accounted for, the extra money, even if it’s just $1000 a year, makes huge difference. Considering my educational training, I know that I could make substantially more than the cost of high-quality day care. That is not where my values lie, however. For some people, not having enough money to travel to foreign countries, or even to buy an expensive, but high quality tool, would cause them to feel at a disadvantage, especially when you know that you could be brining in more income as a family. Although I would love to travel, I don’t place a strong personal value on that. Other people might say that we’re at a disadvantage, I would say we have different values.

What things do you do to recoup that loss in income?

Since I don’t perceive a loss in income, there aren’t things in my life that I do from the mindset of making up for lost income. I shop for bargains and make frugal choices because I believe that it’s a proper use of my resources to do so, not because I feel the need to make up for something.

Once your child/children grow older, do you see yourself returning to full-time work?

I suspect that once my children are all out of the house and on their own, I will return to full-time work that earns money.

This question makes me think some about the perception of stay-at-home parents and how what they do is classified. For instance, I don’t always think of myself as a stay at home mom, even though common use of the term would put me in that category. I spend many of hours throughout the month working on youth ministry volunteer work, and I have occasional - very occasional - think less than 3 jobs per year - contract work. I guess I’m saying that even though I’m not making a significant direct financial input into our family, the volunteer work that I do is significant enough that some people get paid to do it. We’re blessed enough to be able to donate the time.

But back to the question - I know that I enjoy working with people, and I love the challenge of deadlines and creative work. I look forward to the opportunity to apply myself in a way that adds to our income, but I have no idea what I’ll be doing when the time rolls around to get back into the workforce. My interests have changed, and I’ll probably go back to school once I settle on whatever it is I think I want to do!

I’ve observed that you eat organic foods, do cloth diapering, etc. Why? Are these things a “green” choice or are there other reasons?

The “green” aspect of our choices - as in, a positive benefit for the environment, such as a smaller carbon footprint, fewer chemical contaminants in our water and air, less junk in the landfills, things like that - is one reason why we choose to eat organically, use my cheap car that gets great gas mileage, and cloth diaper, and lots of other things. I have been conscious of the impact we have on the environment since I was in high school. I think the thing that really started me in this direction, though, is my belief that it is, in general, healthier for my body, and that such choices can reduce the risk of many of the chronic ills faced by our society. I’m all about reducing chemical exposure. So I suppose, I’m green because I’m selfish.

Thankfully, there are side benefits, like direct savings of less money spent on diapers, and indirect cost savings of less money spent on illnesses.

Your husband’s work is contract-based, meaning that you make plenty of income but it’s irregular. How do you guys manage that irregularity in the face of regular bills?

My husband was doing his line of work long before we got married, and he had already established patterns that now help us get through the year. As our lives have changed - adding a child to the mix changes lots of things! - we’ve adjusted our patterns. Essentially, we’ve taken the time to figure out how much of a paycheck actually stays in our hands on average, with the rest going to business expenses and taxes, and we know how much we spend during the months when income is significantly less. Sometimes we get paid every week, sometimes, it’s less than once a month. We make sure that we set aside enough money over the course of the year to get us through those leaner months. We don’t carry any debt right now, and we make sure that we have a good-sized emergency fund saved up. I suppose that because this is the financial life we have known our entire marriage, it doesn’t seem that strange or irregular.

What role does your faith play in your personal finance choices?

My personal beliefs plays a huge role in my choices. While the organized religious group that I participate with addresses the concept of stewardship, I wouldn’t say that as an organization we are all living green and making sound financial decisions. My personal finance choices are a reflection of my interpretation of scripture, and really, it extends beyond managing money. The concept of being a good steward is central to my interaction with everything around me - the money in my hands, the earth around me, and my relationships with others.

I know Carrie will be reading the comments here, so feel free to add in any additional questions you may have.

Over the next few Sundays, I’m going to post a conversation I’ve had with a person I know who has made interesting financial choices in their lives. Hopefully, these discussions will be enlightening and entertaining.

This week, I’m interviewing a close friend of mine named Rachel. Rachel is one of the most intelligent people I know - valedictorian of her high school class and so on. When she went to college, though, she made an interesting choice - she chose to go into social work instead of into a lucrative career. This always interested me - why would she make such a choice when it meant a lifetime of financial challenges? So we talked about it - I hope you’ll find the conversation interesting. I encouraged Rachel to read your comments and (hopefully) answer any questions that might come up.

You made an active decision at some point to pursue a life oriented around social work. What inspired you to make that choice?

I think the easy answer to is say, “Because I want to help people.” But really, how cliche is that! Also, it might have been an answer that could have gotten me to this point, but it certainly wouldn’t have been enough to keep me here. What keeps me here, simply put, are the people, both the ones I work with and the ones I “care for”. There’s just something very human about this work. Sometimes I think about looking for a job that pays better, but then I think about how much I’d be losing just so I could be “financially secure”. At this point in my life, not to say that it won’t change someday, I’d rather have the people than the money. My job isn’t something I do to make money. I do it because I love it and it happens to also make me enough money to pay the bills. Mostly. Well, at least all of us here are in it together and you know that no one is there for the money!

Do you feel any regrets about making that choice? Would you do it over again, knowing what you do now?

I don’t have any regrets about the path I’ve chosen. I love my job. I love the people I work with. I don’t think there’s a higher concentration of just honest, good people in the same place anywhere. If I had to do it all over again, though, I think I’d be more mindful of my finances at a much earlier point. No one tells you when you first start out that you ought to be thinking about your retirement fund as soon as you get going. Or that your benefits matter as much as your paycheck. Also, I think I would have tried to ask more questions about how slightly more complex financial matters work while I had the resources (such as my parents) right in front of me. You know, things like IRA’s and investing and CD’s and whatever else. Things that might not make me money now, but will in the future.

If someone is considering a career in social work but is concerned about the low pay, what advice would you give them?

Learn to eat lower on the food chain, for starters. It’s a good way to save a few bucks, eat a bit healthier and be more environmentally friendly. Other than that, meet some new people and learn how to have some free fun. Honestly, look into some of the various volunteer corps around the country. I spent a year in the Lutheran Volunteer Corps and much of the year was geared around how to live frugally. How frugally? After paying for food and shelter, I took home $100 a month. But those sorts of programs provide a great environment to learn how to live differently with other people going through the same thing. You don’t have to do it alone. And having company makes the poverty very nearly enjoyable! Just as an aside, Americorps is very similar in this way, but lacks the communal aspect, which, for me, was really important in my learning curve. And once you learn the lessons and learn another way to live, there aren’t many jobs that will pay you less than you make as a volunteer.

Do you feel any concern about your long term financial future? Why or why not?

Of course I do. Sometimes trying to plan for my financial future feels a bit like trying to get blood from a turnip. Statistically speaking, I have about 4 months of a salary saved away, but my salary is so low that realistically I could probably only live off of that on my own for maybe 2 months. It really brings back that whole people aspect, which is the big reason I’m still choosing this life. I don’t really have the financial reserves as this point to feel secure about my long-term future, but I do know that I have an amazing social support system that won’t let me fall through the cracks. Even if I wanted to, I think. The incredible thing is that it’s not just one circle around me, but many layered circles. I’m not confident at all that I’ll be able to retire early or own my dream home or own my own home at all, but I am entirely certain that I’ll never be homeless or starving or without company. There is a lot of freedom in having a lot of money. There’s also a lot of freedom in not needing a lot of money.

Are there any particular moves you’ve made to help secure your financial future, even while earning a relatively low income?

I’m in the process of working on that right now. Two of my goals for 2008 were to become debt free and to open some sort of IRA and/or investing portfolio. I’ve accomplished my first goal and am just beginning to hammer out the details on the second goal. (I just did the math in my head and realized that I’ve paid off about $25,000 in undergrad, graduate, and car loans in under five years. That’s pretty cool.) I know there’s a lot of debate about whether or not debt ought to get paid as quickly as possible or if it all depends on interest rates or whatever, but for me, it was important to have that off my back before I could even begin to think about spending more money someplace else. You know, it’s one of those mental things. Kind of like eating mushrooms. I really don’t care what they taste like, I don’t want to be eating fungus on purpose. So the next step is to start educating myself on those other things. I’ve still got eight months before the end of the year. Any suggestions on how to get started? And think really, really basic. I’m new to this arena.

Do you feel guilty if someone helps you financially? Does that answer depend on who it is, or their reason for doing it?

I know I have people in my life who can be financial resources for me and who I can depend on to be there for me if I ever really needed money. But I definitely won’t tap into those resources until or if I absolutely need it. And yes, I would feel guilty about that. I don’t think it would matter who it was from or what for. That’s not to say that I would rather live on the streets than ask for help, but it would be a hard thing to do. I am more than willing to ask for help in how to manage my finances and get advice in those matters, but asking for actually money is a different beast all together.

Have you had any non-family mentors that have helped guide you to your current place in life? How did you find these people?

Absolutely. I don’t think I would have ended up or stayed where I’m at without some really critical people in my life. Probably the first really influential, non-family person in my life was the chairwoman of the social work department where I went to school. She pushed us to see social work not as a profession, but a perspective, something that we don’t do from 9 to 5, but we live it in everything. She taught me that being a social worker isn’t about the job you hold, but about how you live your life. I believe that how we live matters. How we spend our money matters. That whole “no man is an island” thing, I buy that. I fail often, but I try to be mindful of my impact on others in all things. My diet, my driving habits, my spending habits, my social interactions all have the ability to harm or to help. And I didn’t learn any of that on my own.

Over the next few Sundays, I’m going to post a conversation I’ve had with a person I know who has made interesting financial choices in their lives. Hopefully, these discussions will be enlightening and entertaining.

This conversation is one that’s been long awaited by my readers. This time, my conversation is with my wife, who basically answered most of the questions that readers have tossed in her direction over the past few months. I hope you’ll find that she’s as eloquent and thoughtful as I do. I think she also reveals the true reason why I made a career change recently and tosses out a bit of personal finance advice, too. If you have more follow-up questions, ask in the comments - I’ll encourage her to read them and perhaps add her own thoughts.

You currently live in a situation where you work outside the home, while your husband works inside the home. What are the advantages of that, as you see them?

Trent working at home really hasn’t changed our day-to-day routine that much. We still send the kids to daycare, I still go to work, and Trent still works. The only change is the location of his office.

The real benefits have been in the amount of time Trent has freed up in the evenings and on weekends. When Trent was working and doing The Simple Dollar, he would come home and write every evening until supper was ready, and then write again after our son was asleep and I was nursing our daughter. Trent also spent a lot of time writing during the weekends. Now he makes supper some nights, he helps more with cleaning (he’s been doing the greater share of that lately), and he has time to talk to me in the evening, as well as play with the kids. And weekends are much more enjoyable now. We spend time as a family, instead of me trying to find ways to keep the kids entertained and out of Trent’s hair so that he can write.

What are the disadvantages of that, again, as you see them?

There’s the obvious worry of whether or not we’ll have enough money, since we’re losing Trent’s other source of income. And my paychecks are smaller now, since I have to carry his insurance as well as mine and the kids’. And I wonder what will happen if The Simple Dollar loses popularity and stops bringing in income.

Also, there’s a perception by some people that Trent isn’t really “working”, and they treat him that way (including myself and Trent). Some people have asked why we’re keeping the kids in daycare if Trent’s at home. My family is coming in a couple of weeks, and Trent volunteered to go pick up my sister at the airport during the day, if necessary. Some family and friends have come to visit recently, and Trent ended up spending time during the day, which should be work time, cleaning house instead. Trent’s family came last week, and they arrived on Thursday night, instead of Friday. Trent spent Friday morning writing, but then spent the afternoon with them.

Another change that’s more of an annoyance than anything is that I now drop the kids off and pick them up from daycare. That means I have to leave about 15 minutes earlier in the morning. It also means that I’m the only one to remember important things about daycare. Like which kid needs new diapers, when picture day is, or when book orders are due.

Do you feel jealous of your husband’s opportunity to work from home, or are you happy with the way things are?

I’m pretty happy the way things are. I like my job, and I like interacting with my coworkers and students. I am jealous of Trent’s lack of a commute, though. I drive about 35-40 minutes one-way. My total one-way commute, including dropping the kids off, is about an hour.

It’s crazy to live with two young children at home. What are the best ways you know of to save money with kids? What sorts of shortcuts do you use to maximize the quality time with your kids? Do you feel like the splitting of household and parenting chores with your husband is fair? Why/why not?

A big money-saver is to just not give in to the temptation to buy your children whatever you think they need or want. That may seem obvious, especially to people without children, but we parents really love our children. We want them to have things that make them happy. Even if that’s the Spiderman umbrella that they don’t really need, but you can argue to yourself that it really would be useful, and he would really like it. So my first piece of advice would be to consider what your child or children really need, as opposed to what you just think would make them happy. There are a lot of ways to help your kids be happy, and most of them don’t include spending money.

Another money-saver for Trent and I has been to choose breastfeeding over bottle feeding for both of our children. That has saved us a lot of money on formula, and I truly believe that it has kept our kids healthier, which saves us money on doctor bills.

Do you feel there are any major differences between how you and your spouse spend money? Do you feel he is “cheap”? Do you feel he spends too much on personal expenses?

I think Trent budgets everything much more tightly than I do. I don’t think I really spend much more or less than he does, but he has a better idea of where his money has gone.

In the past I would have said that Trent eats out more than I do, but that has changed this year. Since Trent works at home now, he eats leftovers, which I used to take to work. On the other hand, I don’t have time to eat at work much lately with breastpumping, so I’m finding myself stopping at a fast food place on the way home from work more often. I pick up something relatively cheap (usually a kids’ meal) once or twice a week now, and I used to never get fast food. So that’s something I really need to correct.

Do you feel that one person in a marriage should be the “money leader” - in that one person should be managing the finances, paying bills, allotting spending money for both partners - or that it should be more balanced?

I think that really depends on the couple. Each person has their own areas of strength, and each person has a level of control that they want to have over their finances. I truly don’t believe that there’s one right answer to that question.

Do you feel that traditional budgeting in the traditional sense - listing expenses and putting tight caps on specific areas of spending - is worthwhile?

I think that it’s worthwhile to know where your money is going (which I’ve already said I don’t do nearly as well with as Trent does), and to not waste money on extraneous things. I’m not sure how “tight” the caps have to be. I think it’s okay to go over your set caps sometimes, as long as there are other times that you’re staying under them.

I also think that listing expenses and setting caps doesn’t work for everyone, and shouldn’t be considered the only “right” way to budget. Particularly if a person lives alone (no family) and isn’t overspending their budget, and is able to save some money besides, there’s no need for them to budget tightly. If you’re married, though, it can be important to keep more of a traditional budget, so that everyone knows where the money’s going, and how much you have.

Do you feel that your financial situation has improved over the last three years, even with the birth of children? What are the causes of that?

Yes, because I think that both Trent and I are more money-conscious. We definitely spend more now that we have children, but we also spend our money more wisely. We also both make more money than we did three or four years ago, and we have more tax write-offs (a new house, two kids).

Do you try to talk your husband out of spending unnecessarily? If you do, what sorts of tactics do you use? Does he do the same to you (that you notice)?

I think that both Trent and I can talk to each other about unnecessary spending in a pretty straightforward manner. If I were concerned with some particular area of his spending, I would tell him about it. And I think he would do the same for me.

Don’t get me wrong, we’ve had arguments over money, but not many, and not too serious. I think we’ve also had fewer arguments in recent years, probably because we’ve been slowly shifting towards Trent managing more of our money. As I’ve already said, I don’t do a good job of watching where my money goes. But neither one of us spends extravagently, and we nearly always agree on the things that we do spend money on.

If you could offer one tip on saving money that’s been the most useful to you during your married and parental life, what would you offer up?

Talk to your spouse about money. And I’m not just talking about budgeting and spending caps and how much you’re putting in savings. I’m talking about deciding together how much you both think it’s appropriate to spend on children’s toys, or how much you want to spend on Christmas presents for extended family. And how often you want to eat out or pick up supper on the way home, as opposed to making it? If you want to give to a charity, don’t just do it (as generous as that is), check with your spouse first. It’s their money too, and you can’t just give it away.

Finally, keep in mind that nobody’s perfect. You won’t always spend wisely, and neither will your spouse, children, parents, or even grandparents. If you make mistakes, learn from them (and try not to repeat them).

For the next few Sundays, I’m going to post a conversation I’ve had with a person I know who has made interesting financial choices in their lives. Hopefully, these discussions will be enlightening and entertaining.

To kick off this short series, I had a conversation with John. John is one of my oldest friends and my closest friend over the last several years (besides my wife, of course) - he even served as best man at our wedding. John is a single male in his early thirties and he works in quality control in a technical industry, earning a pretty solid income. What sets John apart from the pack is that he spends far, far less than he earns, and he’s been doing this for as long as I’ve known him. The end result of that choice is that he’s now in his early thirties and is beginning to build up quite a bit of money in the bank - he’s nearing “walk away from it all” money.

Here’s the conversation I had recently with John. I thought it would be interesting to highlight someone who is living by the mantra “spend less than you earn” - and living by it hardcore.

You spend significantly less than you earn. Why?

For one reason, it seems shortsighted to spend significantly more than one earns. Unfortunately many people seem to be doing just that by accruing credit card balances and other debt.

I take the long view. Is there anything I really need today, be it extra excitement, gizmos, food, drugs, sex, rock & roll, or so on? I’m not afraid to spend an extra buck to try a new restaurant or a few hundred to jump out of a plane. But I don’t need to do those things every day or every week. The financial security of tomorrow is more important to me than a large high definition television.

About what percentage of your income do you save each month?

Against common advice, I don’t have a set amount of money budgeted to save each month. The reason is that I am not lost adrift in my finances and looking to get a foothold on saving. I don’t have bad habits that need to be broken. My general mindset is not to save as much as possible but rather to manage my expenses. It just comes as a pleasant surprise to realize how much is left over each month. And instead of spending the surplus, I save it. With my current lifestyle I ended up saving about 53% of my net income for 2007. In essence, about every other paycheck went into savings.

Recognizing that this is something different than what the average twenty- or thirtysomething American is doing, is this something you learned from your parents, or is it something you figured out in adulthood?

I don’t think I learned it from my parents in the sense of talking about money or watching them deal with money. I think it was more due to growing up below the federal poverty level and knowing the value of every penny. I know I’m showing my age, but finding a nickel on the ground was a cause of celebration because it could be spent at the local gas station for either five pieces of bubble gum or one large jawbreaker. It was only the mid-1980s, but I’m sure it sounds like the twenties. I learned to be frugal by simply enduring some financial hardship in my youth.

What are you doing with that extra money? Why?

The extra money is sitting in low risk investments. I’m not risk tolerant so I don’t go after the potentially high return investments. Yes, this means that I might not have as much money as I could have had, but I will have money in the future. I also don’t like to tie up money. The thought of being able to call up thousands of dollars immediately without having to borrow or suffer penalties, i.e., being liquid, is actually quite comforting. This gives the feeling of being my own master, answerable only to myself.

Within just the last two months, I put this liquidity to practice and paid cash for my car. It wasn’t a terribly expensive car, but I didn’t have to prove I had a job, give out my social security number, or dance through hoops to get a significantly better vehicle than my old one. If all goes well, I’ll be able to drive this one for as many years as my 1993 car lasted.

Do you have any spending weaknesses? Things that you spend money on that probably don’t make sense? How do you curb that from going wild?

The only spending weakness I have is gifts. Relative to what I would spend on myself, I spend much more on others. This isn’t saying I give many or expensive gifts. While I have spent $300 on something as trivial as a globe, this a lot more than I would spend on myself. A nice gift is one of the few outlets I have to let people know that I care. I usually counter the impulse by just getting one relatively nice gift and keep my personal bank account threshold in mind.

Do you have any long-term goals for the use of your savings?

One day I’d like to pay cash for a house. Not the down payment - everything, including closing costs. I don’t know if home ownership is in my future, but that won’t stop me from saving up for just such an occurrence.

Does having this kind of cushion change your future plans? In what ways?

Having financial flexibility hasn’t changed my plans, but it has changed my perspective. I’m much more apt to consider taking a new job or willing to move to be with another person. It really is the freedom to move about as life comes.

Do you ever feel compelled to spend more money than you do? If so, how do you curb that desire?

I am quite comfortable with myself - I don’t need to buy to feel happy, love, or acceptance. Be grateful for what you have, and you will always be happy.

What do you envision retirement to be like? Will you actually quit and just pursue hobbies, or will you take up a job that’s just for pure enjoyment? How old will you be?

I love what I do for work right now. It is difficult for me to envision retirement in the traditional sense because that seems like something that would bore me to death. Sure, I like to do some hobbies, but I find I usually need a break from them as well. I’ve spent a year living that life as an adult, and it did not make me a content person. There probably will be no such thing as retirement for me, as I’m the kind of person that enjoys having an objective. Ideally, I’ll be a 987-year-old brain in a robot when I’m incinerated upon a freak reentry accident to Mars - killed doing what he loved, performing null gravity experiments.

If you have any questions/comments, I encouraged John to peek in on the comments section here and answer anything he felt comfortable answering.