July 9, 2006 in City

Debt defying

By The Spokesman-Review
 
Photos by Dan Pelle photo

Every two weeks on payday, Cassie Breithaupt will retreat to her bedroom and divide a set amount of cash into eight envelopes for groceries, gas, haircuts, babysitting, clothes and shoes, restaurants, entertainment and recreation, and “blow,” which she refers to as her husband, Matt’s, mad money.
(Full-size photo)

A year ago, Cassie and Matt Breithaupt did something unusual for a growing family.

They bought a smaller house.

Using the proceeds from the home sale and a radical change in spending habits, they’ve paid off all debt but a mortgage, and they’re working on building their savings.

“We were living paycheck to paycheck, but we denied it,” said Cassie, 30. “We just weren’t being honest with ourselves.”

Now the Breithaupts closely track every expense and have their eye on the future. Like others in the tribe of the superfrugal, they put the lie to the impression that Americans are drowning in debt. Some Americans are drowning in debt, of course. But some are kicking debt’s butt.

While overall consumer debt just grows and grows, a large proportion of people don’t have any credit card debt at all – roughly 40 percent don’t have a card, and a significant proportion of those who do don’t carry balances month to month, though nailing down an exact figure is difficult.

The Breithaupts, who raise four children in their north Spokane home, had accumulated $5,000 in credit card debt about a year ago, on top of $10,000 in student loans and $13,000 on an auto loan. A year after selling their 2,800-square-foot home and moving into a house with about a third fewer square feet, they’ve paid that off. They’re following the financial plan of nationally syndicated radio host and author Dave Ramsey, whose Total Money Makeover program focuses on getting out of debt and building financial independence.

Matt, 28, works full time as a nurse at Sacred Heart Medical Center, and Cassie works several hours a week cleaning houses. Their annual income is roughly $65,000.

Like most very frugal people, they emphasize the importance of careful budgeting – they use a series of envelopes that hold the weekly cash for groceries ($125), gas ($35), entertainment ($40), restaurants ($20) and other expenses. When the envelope’s empty, the money’s gone.

Others see frugality as something of a challenge. Kevin and Alodia Helbley of Spokane are the classic DINKs – double income, no kids. He’s 28, and she’s 27. But unlike a lot of their peers, they’re not spending their money on travel or fancy toys. They’re cheap, and proudly so.

“We live like we’re on welfare,” said Kevin.

Most of the Helbleys’ annual income goes toward savings and the mortgage on their home, which they purchased recently for about $250,000. Their cars are 10 and 20 years old, their TV is 20 years old. They’ve learned home and car repair and have become expert bulk shoppers.

Their dedication to a simple life is influenced by their faith – both are members and employees of the Seventh-day Adventist Church. They tithe 10 percent of their income to the church and believe they are blessed by that.

Kevin said the couple spends $100 or less a month on groceries, though they could spend more. There’s not much they can do about the rising cost of keeping their home warm in the winter, though – the biggest bill went from $180 two years ago to $220 last winter.

“And we keep it cool,” Kevin said. “Like 63 degrees.”


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