An intrepid reader of this blog has offered to open up her finances as a case study so we can learn together from her situation. Through this post, keep in mind that I’m simply sharing my opinion on the matter and not rendering professional advice.


Sophie (a pseudonym) is a schoolteacher in a small rural community in the Upper Peninsula of Michigan. She has no debt, is in grad school, and is working while studying without taking any student loans. (Big kudos to her for that!) Retirement (6%) and health insurance is automatically withdrawn from her paycheck.  However, lately she’s been cashing out CDs she’s had in emergency savings to cover her tuition and wants to know what she can do to minimize her expenses and still accomplish her financial goals.

Her Goals

  1. Fully pay for graduate school with no loans – Estimated to be around $12,000/year or $1000/month.
  2. Fully fund a 6-month emergency fund – Based on her recent monthly expenses (plus a little buffer) around $10,000.
  3. Fully fund a Roth IRA – Currently the contribution limit is $5500/year if you’re under 50, and $6500/year if you’re over.

July 2014 Expenses

Tithe $xxx 10% of income
Back tithe* $300 Repaying tithe from before
Rent $400 Apartment above a garage
Vacation* $200 Gas for 8-hr trip to brother’s house
Utilities $100 Includes electricity & water. Is a flat rate paid to landlord regardless of actual usage.
Gas $83 Lives in town but has to travel 30 miles away once a week.
Union dues $70.71
Cell phone $32.89 Straight Talk non-smartphone prepaid plan for 1000 voice minutes.
Food $130 Goal is to hit $90/month by end of the year
Car insurance $83 Meemic Car Insurance for teachers, paid in 6-month increments. 2002 Dodge Neon, full coverage.
Entertainment $50 Movies, restaurants
Gifts $50 Wedding gift
Personal $25 Clothes, hygiene products
Household $25 Cleaning products
Expenses $1549.60 Doesn’t include tithe.

*The back tithe and vacation expenses won’t be recurring, so immediate savings next month will be $500.

Housing & Utilities

Because rent and utilities combined make up 54% of all of her expenses, these are some of the first expenses she needs to work on.

1. Get a roommate: It might seem unconscionable, but oftentimes this is the best way to save on housing. Split the apartment with one other person and housing expenses are cut by 50%. Once grad school’s over and/or her goals are reached, she can go back to living without a roommate.

2. Negotiate utilities: $100/month flat rate for utilities seems astronomical for a single person who’s out much of the day for work. Negotiate with the landlord to see if there’s a way to pay for what’s actually used. If it turns out that usage is MORE than $100, then a look at our previous post on how to save electricity is in order!

Potential Housing & Utilities Savings = $230


Drop the food budget down to $1/meal ($90/month). Don’t worry, you’ll still be able to eat well and will develop good habits of eating simply and healthfully. Check out these posts to see how to do it:

Potential Food Savings = $40


Sophie is on the right track by using a pre-paid plan and ditching the landline. She’s even more hardcore than I am by using a basic, non-smartphone! However, her cellphone service provider, Straight Talk Wireless, is one of the most expensive in its class. Try to find a cheaper cell phone plan that will still do the job. Here are a few suggestions:

  • FreedomPop: If you are indeed a light cellphone user and you’re within Sprint’s network range, it is possible to get a free cellphone service. Yes, FREE. Check out FreedomPop to see for yourself. (Beware of the fine print and the attempts to upsell you.)
  • Other Carriers: FreedomPop isn’t for everyone, but to move up slightly in price, carriers like AirVoice Wireless, Ting, Republic Wireless, Cricket, and many others have a variety of plans for heavier needs. Prices range anywhere from $5-25/month, so even the high-end, all-you-can-eat plans are still cheaper than the Straight Talk Wireless plan Sophie has now.

Max Potential Cellphone Savings = $32.89


1. Personal: I have to commend Sophie here–$25 for personal effects, INCLUDING clothes? For a lady? I’m impressed! I have nothing to add to this one, Sophie should keep up the good work.

Potential personal savings = $0

2. Household: The $25 on household supplies could be split with a roommate.

Potential household savings = $12.50

3. Gifts: Gifts are a very personal thing, and since Sophie’s not blowing her budget on this, I’m not going to tell her how much she should be spending for a wedding gift. Just don’t be afraid to admit it if your financial situation doesn’t allow you to buy the best, most ideal gift for your loved ones. Be creative in finding a meaningful gift with a lower price tag.

Potential gifts savings = $0

4. Entertainment: Entertainment is a purely discretionary expense and never registers high on my Crumb Saving priority list. You’ve got to think carefully whether that $10 movie ticket or $15 meal at the restaurant is more important than paying off your student tuition. In my humble opinion, this is an easy one. Enjoy the free amusements in life at least until grad school is over, and probably by that point you’ll find that most common amusements aren’t all that essential anyway.

Potential entertainment Savings = $50


Vehicle purchases and driving habits are probably some of the biggest expenses for most people, but Sophie’s actually done a great job here. She only owns one car and it’s an old, relatively fuel efficient Dodge Neon and she doesn’t put very many miles on it (approximately 8000 miles a year.)

But Sophie is currently paying $83/month for insurance, which translates to $500 every six months. According to Kelley Blue Book, her 2002 Dodge Neon is worth around $1000-1500 (the top end is for excellent condition). So right now, she’s pretty much paying more for insurance than her car is WORTH every year! Her insurance company is getting free money!!!

My inner Crumb Saver is weeping tears of sorrow, so let’s see what we can do about this.

A quick quote from GEICO (the company I use for car insurance) with a healthy liability policy, NO collision, and NO comprehensive coverage costs $25/month. For a car that’s worth almost nothing already, basic liability coverage is all that’s needed. Sophie’s better off socking the extra she saves into a car fund so that she’s ready to replace her Neon whenever it decides to give up the ghost. Looking on the bright side, she won’t have to save up much to upgrade from a 2002 Dodge Neon. Just about anything would be a step up!

Potential Car Insurance Savings = $58

Adding it All Up

So the moment of truth.  Let’s add up all of the potential savings that we’ve unearthed today to see where we end up.

Back Tithe & Vacation -$500
Housing -$230
Food -$40
Cellphone $32.89
Household -$12.50
Entertainment -$50
Car -$58
Total Potential Savings -$923.00
Current Expenses $1549.60
Expenses After Potential Savings (less tithe)   $626.60

So under the best-case scenario, Sophie can be spending nearly $1000 less each month than what she did in July.

Hitting The Goals

  1. Graduate Debt Free – With these changes, Sophie is saving just about the average monthly amount for tuition. With the little cushion that she has from her CDs, she should be able to hit this goal.
  2. Emergency Fund – I am definitely a proponent of having an emergency fund, and I don’t recommend anyone draw down emergency savings to anything below $1000, even as she pays for her schooling right now. Who knows, she may need it if her trusty Neon bites the dust. After tuition is covered and she’s done with school, she’ll want to pick up the savings to make her target amount.  With a reduced lifestyle, the total for a 6-month fund won’t need to be $10k anymore, but somewhere closer to $6000.
  3. Roth IRA – Sophie already has a 6% automatic withholding from her paycheck for retirement, so it isn’t as urgent to max out her Roth IRA. It’s important to hit the first two goals before moving on to this one.


As you can see, Sophie’s already saving the crumbs quite well in many areas—no debt, working her way through school, driving an old car, no landline, etc. She’s got some great financial goals, but there certainly are ways to tighten things up to make those crumbs go farther in order to hit those goals faster.

A special thanks to Sophie for letting us take a peek into her finances! Best wishes to you as you press forward toward your goals!