At one point, Isra Albinali drove a Mercedes-Benz sports car, vacationed in Europe and Asia, ate at the finest restaurants, bought designer clothes and lived on the top floor of a five-story apartment overlooking the scenic Charles River in Boston.
Ah, the American Dream.
Now she shares a Jeep Liberty with her husband, Fahd; does “staycations” in Boston instead of vacations; eats out once a month (if a coupon is available); and her family of five has a two-bedroom apartment on the middle floor of a three-story house they share with college students in Cambridge.
Ugh. Is there such a thing as the un-American Dream?
“I don’t think so,” Isra said, chuckling at the suggestion. “I’ll admit, I was living the American Dream. I loved shopping, loved buying new clothes, loved living fancy. I just couldn’t afford it.
“When you can’t pay the rent, the car payment is overdue, the credit cards are maxed out and you can’t even afford to go to the grocery store for bare essentials … well, it’s time to get a little frugal.”
Isra got a lot more than frugal. She did a financial 180. She pulled her family out of a $56,000 credit card debt hole.
That prompted her to start a blog, appropriately called theFrugalette.com. On it, she offers a persuasive argument that life on the cheap is a step in the right direction toward realizing the American Dream.
Learning to Live on Less
“People equate having stuff – nice home, nice car, nice clothes – with being happy, but it’s hard to be happy when you’re stressed out every month over how you’re going to pay for that stuff,” she said. “I wanted to get rid of that stress, so I learned how to enjoy life on less.”
Life with less definitely was not easy for Isra and Fahd. The couple had both grown up in wealthy families where “less” wasn’t part of the vocabulary. Want more? Throw down a credit card, and you got it!
Then one night, they went shopping for diapers and discovered there is a limit to more.
“I pulled out my credit card to pay for a bag of diapers, and they said it was declined,” Isra said. “I had five credit cards in my wallet, so I started handing them over one at a time and every single one got rejected. They were all maxed out.
“I was standing in line at a drugstore, and I couldn’t afford to buy my baby some diapers. You can’t imagine how embarrassing that was.”
Steps to Live a Frugal Life
Things didn’t get better when she and Fahd got home, pulled out all the credit card bills and discovered they were $56,000 in debt. Isra’s mother offered to help out, but the couple refused. They dug the hole, and they wanted to get themselves out.
They made a plan. Step 1 was to trash all five credit cards and pay for everything in cash.
“If I have to pull $30 or $40 out of my wallet to pay for something, it hurts when I hand that money over,” Isra said. “It feels like I’m giving something away that’s mine. There’s a real emotional attachment involved.
“But there is not a lot of emotion when you just sign your name on a receipt and figure you can pay for it another day. Getting rid of those cards was the best thing we ever did.”
The next step was to vacate the top floor of the apartment building and move to the bottom floor, a rent savings of $600 a month. When the lease expired, the family moved into the second-floor home in Cambridge with students from Harvard living above and below them. That cut another $500 a month off their rent.
Isra quickly joined the legions of coupon shoppers, turning it into a 10-step science, as she details on her blog. That led to creative cooking nights at home – menus reflect what’s available with the week’s coupon supply – and a huge savings on the monthly budget. She fed the family of two adults and three children on $65 a week.
“We eat every meal at home, and I had to creative, but it was worth it,” she said. “I cut out all the snack food and sodas and bought what we needed with coupons, so I ended up saving us about $1,000 a month.”
Not Everyone is on the Team
The final step was to apply every bit of savings to retiring the balance on the credit cards. That seems obvious, but it wasn’t easy. Isra says she couldn’t have pulled it off without Fahd.
“You absolutely need a team to get this done,” she said. “When we started saving money, I’d want to go back to my old ways of spending, but he would remind me that we still had debts to pay. It took three long years of sacrifice, but we paid it all off.”
The strange thing about living on the cheap is how hard it can be to get family and friends on the team. Isra’s social circle knew her as the Queen of Spending — not the as the Queen of Saving.
“My mom was not thrilled, and neither were my friends and other family members,” she said. “It was like I suddenly became a different person to them. They were like, ‘Are you headed for the poorhouse? Are your kids going to be OK?’ It was a delicate little dance every time we got together. They were very uncomfortable with my new lifestyle because none of us had ever been around anyone who tried to live this way.”
Now that the debt has disappeared, Isra says everyone is getting more comfortable with her decision to save a buck, rather than spend a buck.
“We tried to keep up with the Joneses, but the Joneses went broke and so did we,” Isra says. “Now, we’ve turned it around. Instead of looking at credit card balances and dreading it, we look at our bank balance and say ‘Wow! That’s all mine! I am living the American Dream!’ ”
Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it in 2012, helping birth Debt.org into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering the high finance world of college and professional sports for major publications, including the Associated Press, New York Times and Sports Illustrated. His interest in sports has waned some, but he is as passionate as ever about not reaching for his wallet. Bill can be reached at [email protected].