Not everyone is frugal--fast and easy is often what people need (whether by choice or necessity). Saving a buck is not everyone's priority and, if they are able to afford it, to each their own. Personally, I think of saving money as a challenge. I like to see how far I can make a dollar stretch. I am not extreme about it because we are not in a position where I need to be. But if push came to shove and we could not afford the luxuries that we allow ourselves, I am very comfortable scaling back on our budget and saving for a rainy day. We have had those rainy days before and one must always assume that they will return.
Most of the time, we could afford to spend what we want and still get by. but the truth is, I've just never been comfortable in the mindset of "having what I want, when I want it". Perhaps because I have simple, practical tastes or perhaps because I was raised very frugally, it is not my nature to ever spend without planning and thinking it through. I have written about our budget
before and I do not wish to be repetitive, but here are some more recent things that I have been doing to budget our money and
pay off debt.
The first thing you must do is track where every dollar is being spent. Write out what your income is. Write out all your expenses. Compare the two. I recently did this using a template that I found here. Once I knew how much is left over after payments and bills, I can build a strategy to tackle debt (in our case a mortgage and a camper payment).
Now that I can see how much money we have left every month, I am looking for ways to
increase that amount--either by making more or spending
less. It crosses my mind to take a part-time job but for now I choose to stay home with my boys. We recently rented out our basement bedroom to a working friend who needs a place to stay when working in the area. To me, this is free money and I've used it to fluff our emergency fund and I am now applying it directly to our highest interest payment: our camper. Are there any ways that you might be able to bring in more income?
While doing that, are there any ways to reduce your spending?
* reduce or remove all possible service charges from all bank accounts and credit cards. Reduce the number of accounts that you have--for example do you need cable if you mostly watch netflix, etc.
* automatic monthly transfer from chequing account into savings. This enables an emergency fund to grow without effort on my part. It is easy to access should we need it.
* pay off whatever you are paying the most interest on. I know that is easier said than done. If you are under-employed and unable to bring in as much as you spend, it is hard to pay off debt. It is crucial to brainstorm ideas to make more money. Can you do odd jobs? Can you rent out a room? Have you got things that you can sell? Can you trim your spending on groceries/eating out or other entertainment?
You must know how much money you make, how much you are spending, and get in control of your finances. This may mean a temporary second job, it may mean doing a job that you feel beneath you. It does not have to be forever, but the extra income may mean added security for yourself and family. That in itself is well worth the effort.
* we collect airmiles with our credit card. It only makes sense to do this if you are paying your card off in full every month. Paying interest to collect any kind of points is lunacy. We do use our airmiles to travel, but we may also use them to buy gifts in the future. It is just another way to get more out of the money we spend.
* check the reduced rack in the produce aisle. Quite often I get peppers and mushrooms at 50% off because the new produce arrived and the old had to be put on sale. Check the quality and if it looks good enough to eat in the next day or 2, why not save that money for other things you need?
* buy some extra canned goods when they are on special. For instance I never buy canned tomatoes or crushed tomatoes full price. When they are on special I buy extra.
* I buy bags of frozen peas, corn, Brussels sprouts rather than buying fresh through the winter. This supplements the fresh vegetables that I do buy, and gets us by in a pinch if I can't make it to town for groceries for some reason.
*a major area for me to improve upon is letting food go to waste. I grew up using all leftovers to make soup for lunch everyday. My kids won't eat soup and I find that I throw out food that should have been eaten. Likewise with fruit. I try to freeze berries that are about to spoil and make desserts with apples or pears that are overripe, but I need to be more diligent.
* check for in-store coupons. I shop at superstore and the bulletin board inside the door has all their current coupons. Also at the door is the weekly flyer, usually with a weekly special such as spend $250 and receive a free gift. If I'm going to be near that amount anyways, I buy extra coffee if it is on special or a few extra items (that are on special) that we will need (NOTE: I don't buy extra stuff that we don't need or can't afford just to get the free gift. I buy things that I might end up getting the following week for full price. You have to resist the temptation to spend more under the illusion that you are saving). Some of the "free gifts" from last year were saved and given away as Christmas presents, for example a flashlight and batteries set and a ladies skincare bundle. If money is tight the last thing you can do is intentionally spend extra. But I look at it as buying my coffee when it is $8/can instead of $11, in order to get the $25 value sunscreen package for free (or whatever the deal may be).
* I signed up for the PC plus points card. In addition to the in-store coupons and weekly free items, I also get cash off my groceries. So far I think I've redeemed about $80 worth of free groceries. I plan on saving them all year and having a free grocery bill in December when we are spending extra on other things. A good way to save some money is signing up for free points programs and redeeming your savings when you need to.
* use bars of soap instead of liquid hand soap or shower gels. You can get six bars of soap for around $2.50 where I live. Most shower gel is around $7 a bottle. It's a no-brainer.
* ditch the novelty items for your kids. At times we get the Lightening McQueen foaming hand soap, don't get me wrong. But it's also around $7/bottle and completely unnecessary. In fact, my two-year old usually pumps it straight down the drain. Likewise with the kid's mouthwash and bubble bath and the list goes on. Add up all the little extra things you buy your kids and consider putting that money on your highest bill instead, or save to take your kids on a vacation. I am steadily trying to reduce the amount of "stuff" that we bring into our home!
* I am very fortunate to be given most of the clothes that my kids wear. I spend virtually nothing on their clothes, winter clothes and boots, shoes etc. When they need something that is not coming for free I hunt the thrift stores first (super good quality items can be found in like-new or new condition for a dollar or two) and then shop the sales racks as a last resort. If you do not receive hand-me-downs, have you considered putting outgrown kids' clothing on consignment and buying second-hand to save money?
* what activities can you do for free? Rather than taking our kids out to movies we tape them on our PVR and plan a pizza and movie night at home. We use the library for crafts and story time, and as often as we can we pack our own drinks and snacks. I cook from scratch and do most of our own baking, both to control our salt and keep the cost down.
* Likewise, I bake our birthday cupcakes and make a home-cooked meal to celebrate our getting older. I know that outings might be unavoidable once my kids are older but, while they are small, their birthdays are simple and don't cost much more than a regular day. I've heard of people renting facilities to host the birthday party of a child, sometimes for $80 or more, and for now I consider myself lucky to avoid those extra costs.
* tooth whitening paste is more expensive and, in our case, makes our teeth super-sensitive to hot and cold. We use the 99 cent stuff. If you are of the persuasion to use health store brands, you might consider making your own or trying coconut oil as a frugal option.
Lastly, I think that to be successful at changing your lifestyle and adopting more frugal habits it is a good idea to make it part of your language. I enjoy reading frugal blogs. A couple that I highly recommend are Notes From The Frugal Trenches and Mortgage Free in Three. Another helpful site is Gail Vaz-Oxlade Debt-Free Forever. Do you have close friends that know what you are trying to achieve? If so, have you discussed your ideas and made the necessary adaptations to your routine? Don't expect rapid results if you refuse to let go of your beer and wing ritual on Friday nights. Decide what you are willing to sacrifice and what you feel you must retain, then record your monthly results. In February I plan to begin posting my monthly grocery spending on this blog. I estimate that my family of 2 adults and 2 children spends approximately $800/month on groceries, not including the very rare meal out. I hope to shave that number by 10% to start, and see how much I can further trim it as the year progresses. Please join me in the comments if you would like to reduce your spending or if you have any suggestions to add.
These are some ideas I have on how to reduce what is spent every month. I won't always be around to guide my children through hard times. I'm trying to teach them now the difference between "want" and "need" so that, if they encounter hard times, they are equipped to survive and thrive no matter the economy.
This post is just one person's point of view on how to reduce spending in an age where shopping is a pastime and collecting "stuff" is a way of life. If you are looking to make a change and reduce your spending, I hope these thoughts will help. Have you got any money saving strategies to share?
