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Over your head in debt? 5 extreme budgeting ideas

Become a DIY expert, eat weeds or rent out your house

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For many people struggling with unemployment, underemployment or other financial calamity, just cutting back on expenses is not enough. After clipping coupons, brown-bagging lunch and cutting cable TV, they're still coming up short of cash. Now they're looking for extreme ways to save money -- preferably lots of it.

Personal finance expert Dave Ramsey believes all of us can save money, if only we are willing to do things other people won't. To prove it, he asks, "Could you save $5,000 in a year, without borrowing, if your child's life depended on it?" Of course! If we could come up with that much money in a life-or-death situation, why can't we apply that kind of intensity to saving our financial lives?

Here are some extreme and unusual budgeting measures people have used to get out of a tight financial jam:

Doubling up households1. Doubling up households
In 2010, 1.6 million more households consisted of more than one family than in 2008. That's an increase of almost 12 percent in just two years. Presumably, many of those families find someone to share living expenses with -- or live with relatives rent-free -- because of economic hardship. It's a smart move when you consider that, for most people, housing is their largest expense.

For example, when Ryah Dietzen and her husband faced the seemingly impossible task of paying down their debts, her parents came to the rescue. No, they didn't offer money. Instead, they let Dietzen and her husband convert their 400-square-foot garage in Gig Harbor, Wash., into a dwelling. "In less than two months, we had rented out our home and turned their hard-working 20-year-old garage into a little fully functioning house."

Dietzen acknowledges it's a big bite of humble pie to move from their own 1,600-square-foot house into a garage -- and with two small children, it's cozy. "But," she says, "there is something to be said for living simply." They have no regrets. "In the future, we will laugh about this!" she says.

Rent out rooms2. Rent out rooms
In 2000, psychiatrist Stuart Jeanne Bramhall's Seattle practice was struggling and she was on the verge of bankruptcy. Most people consider cars and houses off-limits from the budget ax. Not Bramhall. "I had to sell my car and use the bus and my bicycle for transport, as well as move into the basement and rent out both my bedrooms in order to pay my daughter's first-year tuition at university." Fortunately, Seattle had just launched a car-sharing program, so Bramhall could use a vehicle once a month to haul the 50-pound bags of food she bought in bulk.

If your local laws allow it, consider renting out one or more rooms to help make up your budget shortfall. You may be the most comfortable if your living quarters can be completely separate, with different entries. You'll give up some space, but maintain your privacy. If that's not possible, or if you don't mind company, you can rent out a room and even share the kitchen. It's an extreme measure, but one that's sure to be interesting -- and perhaps even remind you of your college days.

Downsize3. Downsize
Moving into a smaller house or apartment can be a huge money saver. By cutting back on square footage, you should reduce not just monthly payment or rent, but property taxes, utilities and upkeep expenses as well.

Angela Isom of Cleveland, author of "Quitters Never Win & Winners Never Quit," downsized drastically when financial difficulties forced her to file for bankruptcy in 2007. "To make ends meet, I moved from a six-bedroom home to a two-bedroom. I then worked three jobs so that I could pay off the two-bedroom house ASAP." Her new house is near a grocery store and a library, so she and her family get exercise carrying books and groceries in their book bags.

Before you decide to downsize, be sure to consider expenses as well as savings. Generally, selling a house to buy a smaller one makes sense only if the replacement home costs at least 20 percent less. Otherwise, your savings could be eaten up by real estate commissions and other buying, selling and moving expenses.

Become a do-it-yourself expert4. Become a do-it-yourself expert
Suzanne Meadows, formerly of Brooklyn and now living in Amman, Jordan, didn't always know how to remove a computer virus, exterminate bugs, do taxes or caulk a sink. But she learned how when she was unemployed for 13 months. She figures she spent 40 hours -- during which time she barely ate, showered or slept -- to get a nasty virus off her computer herself. To get real bugs out of her apartment, she went to a commercial dealer and bought over-the-counter products. Meadows always had paid an accountant to do her taxes, but she figured those out herself, too. Caulking the sink turned out to be fairly simple. Meadows eventually rented out her Brooklyn apartment and moved to the Middle East to fulfill a lifelong dream.

A generation ago, few people paid someone to walk the dog, paint their toenails and fertilize the lawn. If they needed a fence, they probably built it themselves. We may have forgotten some of those skills, but as Meadows demonstrates, that doesn't mean we can't learn.

The best do-it-yourselfers get expert advice, so they don't have to make every mistake themselves. Between the Internet, sales representatives, and friends and relatives, get all the information you need before you start.

Add up the small (and not-so-small) stuff5. Add up the small (and not-so-small) stuff
Food and heat are necessities, but you still can find extreme ways to save money on them. Deborah Chamberlain and Markus Rothkranz have taken money-saving measures to new levels.

We've heard the advice of turning down the thermostat to save money, but could you live with your house at just 56 degrees -- in Wauatosa, Wis., in the winter? That's how Chamberlain saved money to send her daughter to college. She nails a quilt over her office doorway so she doesn't have to heat the whole house, wears a coat inside and hangs her clothes up to dry instead of using the dryer. She drinks only water and cuts her food into smaller portions. "Hey -- I needed to lose a few pounds anyway, so it's become a little game," she says.

Not many people look at the weeds growing around their house and neighborhood as a food source when they're hungry and have run out of money. However, Rothkranz, creator of the documentary "Free Food and Medicine," did just that. "My health radically improved," he says, "and then I found out people were actually doing this all over the world as a lifestyle. So I filmed these people and made a documentary." Rothkranz says you don't need to buy expensive superfoods. "A real superfood is something you pick out of the ground right then and you eat it." He now travels extensively promoting the concept of eating wild and foraged foods.

Other extreme budgeters stretch their budgets by gleaning leftover or neglected crops such as apples (be sure to ask whether the tree is on someone else's property) or helping at food banks so they can eat for free with other volunteers. Even a low-paying babysitting job helps if you have permission to raid the refrigerator. Small savings on everyday expenses like food can make a big difference during tough times.

By taking tips from extreme budgeters, we might all save some money. We might even find we like salad made from lamb's-quarters (a common weed). Don't laugh until you try it.

See related: Protecting your credit score when paying down debt, A generic budget: Guidelines for spending categories, What to expect when filing for bankruptcy, Extreme ways to tackle debt

Published: October 14, 2010



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