Money-Saving Tips from Real Families

How three families are making it in tough times


Staying Modest

Emily and Josh DeVoll, Glendale, Ariz.

"We hope for the best for our kids but don't dwell on it. We just kind of take care of ourselves and make the best decisions we can."

When Emily DeVoll and her husband, Josh, decided to have a second child, they knew they'd be making some sacrifices. "We're by no means in a high income bracket, and we were in the process of buying a house when I got pregnant," says Emily. Their 1,350-square-foot home in a modest neighborhood north of Phoenix is a little squeezed for the family, with no yard space or room to add on. But living in a small house means lower spending on furniture, maintenance and utilities, says Emily, which helps stretch Josh's salary as an architectural designer.

Before Knox (now 5 months) was born, Emily and Josh got their financial house in order: "We looked at our bills to make sure we didn't have any wild expenses, and we made sure we'd be able to use our tax refund to pay off the hospital bills," says Emily.

The couple also changed Josh's payroll withholding, increasing their net income by about $350 per month. And they agreed to maintain their frugal lifestyle—driving a used minivan, avoiding credit card debt and placing a priority on tithing at their church and saving for retirement.

Deferring Dreams

Melanie and Jon Margolin, Cranbury, N.J.

"We want that big house, that big kitchen, but we don't want our kids not to be able to afford to play soccer or piano or go to college."

For Melanie and Jon Margolin, family financial planning began long before the birth of their son, Alexander, now 8 months. "We started planning to have children before we bought our first house six years ago," says Melanie. Between her New York advertising job and Jon's income as a clinical pharmacy chief, they could easily have qualified for a bigger mortgage, but they resisted pressure from real estate brokers and settled for a home they could afford on one salary—just in case—despite their high-priced location.

Melanie did stop working after Alexander was born, and the couple found themselves keeping a closer eye on spending to offset the new expenses. "When I was working in the city, I'd occasionally go to Barney's and buy something for myself," says Melanie. "Now, when I want a new top or something, I go to Target. And we were never coupon clippers, but now we have a folder full of coupons for diapers, wipes, formula—I'm always figuring out the best prices on things for the baby." The couple also plans to swap cars to save gas money—Melanie will use Jon's SUV for errands close to home, while he'll use her Jetta for his 40-mile commute. ("He's still learning to drive a stick," she laughs.)

Getting Creative

Samantha and Tim Dionne, San Francisco

"We have lots of nice parks for recreation, and we try to get out and do fun things with the kids and each other that don't cost a lot."

"San Francisco is a really expensive city, so money is definitely near the top of our worry list," says Tim Dionne, a software engineer and father of Griffin, 4, and Milo, 1. The No. 1 concern in my life is our home and where we're going to stand in five years," Tim adds.

He and his wife, Samantha, spent almost $200,000 remodeling their ground floor into a facility for a preschool that Samantha runs. That saves money on child care, but the Dionnes' big concern now is their mortgage: "We're the prime example of a risky mortgage," says Tim. "We actually have a loan where the principal owed on our house is growing, and we have a couple of years left until the payment goes up, so we're trying to make at least the interest-only payment." With Samantha's business tied to their investment in their home, they're planning to do whatever they can to hold onto it.

The Dionnes keep expenses in check as much as possible by getting creative: "We go to baby exchange stores to buy, sell and trade things like clothes and toys, and we use Quicken software to manage our incredibly tight budget," Tim says. "We also maintain memberships at local fun spots like the zoo, the Academy of Science and the Bay Area Discovery Museum," he adds. "You can go on any given day without worrying about the entrance fee, and we typically make lunches to bring with us."

Find out more about how your neighbors are making it work, and make sure you're prepared for a financial crisis: Babynomics: With the right strategies you can have a baby without breaking the bank. Protect Your Family: Smart Financial Planning