The costs of living

Monica Davis said she hasn't reached a point yet where she had to decide what bills to pay and what to let slide for just a bit longer.

But those days may be coming, and she is trying to get ready.

"We have been blessed that we haven't gotten to a point where we couldn't make it, but we have had to give up some things and cut back on some spending to keep from getting there," said the 31-year-old mother of two.

For Davis, some tough choices have been made. She's still driving the mini-van that she had hoped to trade off two years ago and given up some of the time on the road that hurt her pocketbook in fuel costs.

"That's one of the biggest things," she said. "Gas has gotten so high that we try to not to go too much."

Prices at the pump across the Shoals are averaging $3 a gallon and are putting a strain on consumers.

"It's something all the time," said Jimmy Street, as he put gas in his truck's tank. "But, I don't know what we can do because we have to have it."

Rising fuel costs impact the costs of many other items because transportation fees have to be included. But Americans have been dealing with the additional costs while still adding other expenses.

Davis said she has two cell phones and the Internet at home that add more monthly bills.

"They are just payments we are used to making now, like all the others," she said.

Additional bills are things that have become commonplace in most all American homes.

"Everything is all out all the time," said Jan Brakefield, an assistant professor in the University of Alabama's department of consumer sciences.

Brakefield is also a certified financial planner and believes that there are several things Americans can do to be better prepared.

"People fail to plan," she said. "I don't believe anyone plans to fail."

She said setting goals and strategies for family finances should be done and should include everyone in the family.

"Recognize what things are coming at certain times and budget money for those times," she said. "We know Christmas is coming in December, so begin planning and budgeting for that in January each year."

Sometimes the day-to-day costs of living are not what set people back. It is the added luxuries that almost seem like necessities.

"It's almost like you have to have the Internet at home and that's a bill," said LeAnne Parker, of Muscle Shoals. "My husband wanted a bigger (television) so we ended up adding more channels and high definition to that. That's a little extra money we didn't plan on spending. We just thought we were getting a better TV."

Northwest Alabama continues to be one of the most affordable areas in the state to live. The cost of housing in Alabama is about 38 percent less than the national average and the state has some of the lowest property taxes in the country.

Still, the median household incomes in the area can get stretched thin without sound financial plans. The average household income in Franklin County is $31,581, while Colbert and Lauderdale families average close to $38,000.

According to results from the Consumer Expenditure Survey released by the Bureau of Labor Statistics of the U.S. Department of Labor in October, the average annual expenditures per consumer unit, which is similar to a household, rose 4.3 percent in 2006, after an increase of 6.9 percent in 2005.

Increases in spending on housing (7.9 percent) and on food (3 percent) contributed to the overall increase in 2006, according to the study.

Brakefield said some of the problems lie in what Americans want.

"We are a buy now, pay for it later society," she said. "If other people are doing it, it must be OK. We have this 'everybody is doing it syndrome' so I have to, too."

According to the study, spending increased for essential items such as health care, transportation, personal insurance and pensions. Spending decreased for apparel and services and on entertainment.

Parker said her family has learned to decide what they want to do most and have cut out things they had been "wasting money on."

"We still do all we can," she said. "We want the kids to be able to do things they like, but you have to look at cutting some things or reducing payments."

She said she recently changed cell phone packages to help use minutes and money more wisely and has begun waiting until she has several errands she can do at one time, rather than making several trips and using more gas.

"Everything costs so much more and there is a lot more to spend on than there used to be," Davis said. "It gets hard just to get by. Sometimes you almost feel like, what would I do if something happened and we missed a paycheck or two. It's scary."

Jonathan Willis can be reached at 332-0140 or jonathan.willis@timesdaily.com.