Forum: Not how much you make, but how you handle it

It seems everywhere we look these days, we see something telling us how bad the economy is and how tough times are. Things have become more difficult for some, but this a great learning opportunity.

I'm a school teacher with a family of four to raise on my salary. My wife, Tracy, is a former teacher and now stay-at-home mother to our two young daughters. Despite earning a moderate income, we have no debt except our mortgage, have a 12-month emergency fund, invest so that we are on track to retire with a sizable nest egg, and live a financially secure life on a teacher's salary.

I recently wrote a book, "How to Survive (And Perhaps Thrive) on a Teacher's Salary," to show others how they can make the most out of their salaries. Here are some tips that have enabled my family to live on a teacher's salary:

► Make your own Halloween costumes: Tracy has made my oldest daughter's Halloween costumes the past two years. Two years ago, our daughter Ava saw a skeleton costume in a Pottery Barn catalog and wanted that to be her costume. Instead of buying it, Tracy made an identical-looking costume using a T-shirt and felt material. This homemade costume saved us $50.

Tracy did the same thing last Halloween with a butterfly costume.

► Get a new cell phone plan: This might not apply to everyone, but we only use our cell phone for emergencies. A few years ago, we had a plan in which we were paying $50 per month and barely using the service. We switched providers and now spend an average of $10 per month.

► Use cash: Cash is king these days. Most stores are hurting and are willing to negotiate prices - especially if you are using cash. I recently had a friend who wanted to buy a new TV priced at about $1,000. I told her to walk into the store with $700 in cash and say she really wanted the television, but could spend only the money she had. Well, after some talk, she walked out with the TV

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