A single Latina 41-year-old mother of two sons 17-year-old and 4-year-old manages on $32,000 per year in New York City while trying to keep her business afloat. Her biggest expense is not on food or gas but rent. She rents an apartment in New York City for roughly $751 per month which includes gas and water.

Since she is working from home on her own business she does not have to worry about expenditure on fuel and eating lunch outside. She explained that “I’ve had to cut all spending to the bare bones. The good thing about working for myself is that I work from home and don’t have to worry about transportation ($121 Metrocard) or eating lunch out. We used to eat out at least twice a week. Now it’s twice a month — if that — and only things that I can’t make at home.”

“I use coupons for everything and am a member of points clubs at my local supermarket (which allows me to get items for free using my points), as well as Duane Reade, Rite Aid, and CVS. I also save money by not keeping my credit card in my wallet and using the 24-hour rule to make any big purchases. Sometimes, I take 48 hours or more to decide. It has served me well.”

She knows how to take care of the health of the family with whatever she has in her hand which is why she has enrolled her family health care in a program called Marketplace to eliminate out-of-pocket costs. She also sends her little guy to Universal pre-K for schooling. But still, there are some expenditures which she cannot avoid such as phone bills, gas, water, and her elder son’s tuition fee.

She confessed that “My biggest financial fear is not being able to make a decent profit from my business that I can support myself and my boys. I wish I could change my credit card debt. In 2012, I was out of work for four months, and rather than take money out of my 401(k) then, I racked up $7K in debt. I see now that even though there is a tax penalty for withdrawing funds early from my 401(k), it would have been much cheaper to do that than use my credit card. An expensive lesson learned.”

Single mother and financial planner Nicole Middendorf advised the single mother that “She’s putting money into savings, so she could consider paying down some of the debt. That should be her focus. If you have a credit card charging you 17 percent interest, you cannot get ahead. If you have money in savings earning less than 1 percent, then you should take that and pay down the debt. Once the debt is gone, then you can ramp up savings.”

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