Hard way to learn lesson in frugality

Value Judgments

Your Money

March 21, 2004|By JANET KIDD STEWART

AMONG SOARING personal bankruptcy rates, corporate layoffs and major stock market swings within the past few years, a consistently rising standard of living is no slam-dunk.

So how do you get by on instant coffee once you've lived on latte? That's a decaf venti latte with caramel sauce in Jennifer Dulles Jansky's case. Her daily java fix went perfectly with the rest of her life: The affluent upbringing, the white-collar job, the fancy wedding, the one-year anniversary trip to Florence, Italy, in 2002.

And then in a week in January last year, Jansky learned that her salary would be cut in half, that her husband, Jason, would be laid off, and that she was expecting their first child.

"It was a dire change in circumstances," she said. "We were down to a third of our [former] income."

She knew that drawing both salaries from the same Boulder, Colo., public relations agency was risky, but with the industry in a slump when the couple married, they had been waiting for the economy to improve before seeking new jobs. Unfortunately, the downturn found them first.

"Everything is set up for a world that doesn't exist anymore - stable employment," said Richard Schell, an attorney and author of a new book called Quick Cash: A Guide to Raising Money During Life's Planned and Unplanned Changes. "So many Americans are living paycheck to paycheck that all it takes is one strong wave to knock them off."

Five months went by before a trade association hired Jason. They're back on track today - the baby, Benjamin, is a healthy 6 months old, and Jennifer, 33, recently opened her own agency. The couple are relatively debt-free, but there were tense moments as they learned frugality the hard way.

"One memory that really sticks out is not affording potatoes. I was going through the aisles looking for baked potato toppings, and my husband said we better not. I remember thinking, 'Really? We can't afford potatoes?' "

There was the time she shook with envy as a friend talked about paying $250 for a pair of boots. Another night she drove to an upscale restaurant alone and blew nearly a half-month's food budget.

A few stumbles aside, a healthy perspective got them through the emotional part of living with less.

"Our income shrank, but our ability to scrutinize the lifestyle we'd become accustomed to, to ask for and graciously accept help, and to count our blessings grew exponentially over those months," Jennifer Jansky wrote me in an e-mail after we spoke. "We learned a lot about what was really important to us, refocused ourselves and emerged much happier - albeit in a lower income bracket."

Other ways to cope include volunteering to help the truly needy and keeping at least one day of the week for reflection with no shopping allowed, as in the Jewish tradition, said Rabbi Steven Leder, author of More Money Than God: Living a Rich Life Without Losing Your Soul.

For the practical realities of living with less, the Janskys sprang into action as soon as the layoff came. They sold one of their two cars, negotiated a less expensive lease on the other and suspended their whole-life insurance policy. They canceled cable television and met friends for coffee instead of dinner at restaurants.

Jennifer Jansky let her hair grow long, skipping $175 haircuts, and he sold his vintage comic books over the Internet, netting $2,000.

Last on the list was raiding retirement accounts, and the couple never had to go that far.

"No one can count on a lifetime employer, so you have to have emergency savings," said Sharon Oberlander, a Merrill Lynch & Co. Inc. financial adviser in Chicago.

Although the couple is back to a second income, Jennifer Jansky is still forgoing the latte life and finally trying to build the savings safety net.

"I'm connected to every cent," she said. "It's like a game to me now to see how little I have to give away."

E-mail Janet Kidd Stewart at yourmoney@tribune.com

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