Stretching Dollars Further

Often, life is about trade-offs. Theresa and Tony Adams had to make a tough decision two years ago. Who would care for their infant son, Corey? “I wasn’t impressed with what was available for child care for little babies,” says Theresa.

Without extended family to turn to for caregiving, the couple, who also have a 10-month-old son, Bryce, was in a bind. Theresa, 36, worked full time as a credit analyst, and Tony, 44, worked full time at night as a supervisor at a packaging company. They decided that Theresa would stay home. “I had to convince Tony that this was the best thing to do. He wanted me to work because we’re better off with two incomes,” says Theresa.

She felt that they would be able to make it on one income if they were willing to cut back on leisure spending. With their combined $97,000 income, they were able to save $35,000 to help pay for their home and afford luxuries like $80 dinners and $60 on movies each month.

With Theresa as a stay-at-home mom, the results are bittersweet. On one hand, their two children receive quality care. On the other hand, Tony and Theresa really miss the $47,000 salary, plus $5,000 minimum bonus, she earned at Capital One Bank. The Richmond, Virginia, couple has had to stretch Tony’s $50,000 salary until it hurts. “We do get by. We can pay our bills, but there’s not much left after that. We have food, clothes, the necessities, but no extras,” says Theresa.

“I’m the only one working, so I definitely need to find extra income,” says Tony.

The couple hasn’t been able to save much. Tony has $20,000 in his 401(k). He contributes about 4% of his salary and hopes to increase it to 7%. Theresa has $38,000 in the 401(k) she had at Capital One. They also have $200 in a checking account and $5,000 in a money market account. Fortunately, they don’t have much debt. They owe $2,000 on credit cards and $5,000 on a 2004 GMC Envoy. Their 1998 BMW is paid off. They have first and second mortgages on their home that add up to $200,000.

To help out, Theresa has put her skills as a budget shopper to good use. “I do coupons. When it comes to clothes, it’s markdowns and clearance sales,” she says. “We just use credit for things we absolutely need that we don’t have cash for. The card will be used for gas, or Tony’s blood pressure medicine.”

As the Adams family looks ahead, the goal is to survive without losing critical financial ground until Theresa can return to work full time in two or three years. To increase his income, Tony says,”I’m trying to get a management position at my job. I have to be patient.”

They are both optimistic.

We connected the Adamses with Walt Clark, president and CEO of Clark Capital Financial ( in Columbia, Maryland, who says the couple has managed their financial situation very well considering they now have two children