Last week there was a big change to our financial situation (hopefully only temporary) and last night I spent the evening redoing out budget. I took a look at this budget and said to myself, this is going to be HARD.
I won't give you the details but our income has dropped by about half. At first glance I thought this was a tragedy, I started sweating, I started contemplating sleepless nights and my already deep frowns lines becoming crevases in my face.
Then I had a flash back, of my uni days. When I had $10 in my pocket and no food for the week. Instead of freaking out then, I calmly walked to the supermarket and lugged back a 10kg bag of potatoes and ate that for the next 7 days. Mashed potatoes, boiled potatoes, fried potatoes (don't get me started on the million ways to cook potatoes). Although not nutritionally good for me it was easily doable. And back then I just laughed in the face of adversity and was stoked when I found $2 down the side of the couch and could by an instant pasta snack to mix in with my mash.
Our halved income is alot more than that $10, in fact we aren't even struggling. I am just being a sook, in fact there are people in the world who have real money issues and here I am freaking out because I may have to become accustomed to a less extravagant lifestyle. Slowly while our incomes have increased over the last six years, I have become a woman with champagne tastes. We would easily, fly to Brisbane to watch a concert, never say no to an invite, take money out of our account to spend on a night out and not blink an eyelid. It happened so gradually that I didn't even notice that I have been frivilously spending our money without realising. Things needs to change.
I went through our budget and took a look at what I was spending to find some cost cutters. Below is a list of things that I did to cut down our costs, well mainly mine. Nick seriously doesn't spend money on anything, I'm the one with the spending issue.
- Go through your insurances and current utility bills. Can you find a better deal with someone else? Do you really need half a mill life insurance? I cut our life insurance from 500k to enough to pay back the mortgage. Changed our phone and internet plan and made quite a few decent savings.
Saving per month: $105 - Cancelled my gym membership. Last year a bought a couple of workout DVDs for home. I either walk outside or do yoga at home in the spare room downstairs and yet I was paying for the gym in case I wanted to go to a pump class, which by the way I never did.
Saving per month: $75.83 - Stop buying clothes. This one is pretty hard for me at the moment because as my baby gut gets bigger, I'm finding less and less that I actually fit into, but why buy a $200 pair of jeans when I can buy one for $20. yes they will wear out in a year or so and I'll have to buy another pair but who cares, for now they will do.
Also when was the last time you went right through your wardrobe, pulled everything out of your drawers and took a look at what you have? I do it quite frequently and throw out things I haven't worn in 6 months. It makes you realise, you do have heaps of clothes, I do not need the new dress.
Savings per month: $180 by buying the cheap pair of jeans. - Downgrading my hair products. I spend alot on my hair, Alot. Like $100 a pop on shampoo and conditioner, it actually disgusts me to say that and I don't usually tell people. Once my products run out, I'm going back to supermarket grade stuff. And instead of getting the foils redone quite regulalry, my hairdresser just advised me to come in for a toner touchup instead. This will lengthen the times between getting it done properly and make the dreaded regrowth more manageable.
Savings per month: $45 a month - Buy less processed food. Did you know that the processed foods are all the expensives ones? If you stick to fresh meats, vegetables, fruit, diary, bread and less processed cereals (e.g. weetbix), you can save a bundle on your food bill. Biscuits, chips, sugary cereals, processed dessert, frozen foods cost at least $4-8 a pop. Cut these out and your food bill will plummet.
Savings per month: approx $200 a month - This is my biggest piece of advice and one that I still find hard to follow but always works when I do. Give yourself spending money at a set amount, go to the ATM and withdraw the cash. Then put your card away somewhere safe. Whenever I spend on my card, I always go over my spending money! When I have cash in my hand and I see that I only have $20 left I will put the chocolate bar down. Well most of the time. But at least I can see where it is all going and what I have left in realtime. Instead of finding, when I next check my bank balance, that I "accidently" spent half of my savings for the month.
Savings per month: Totally depends on how crazy I get with my card
Disclaimer: If these tips don't work for you, don't blame me. This is just what I have found helped me in my life. Is this enough of a disclaimer so that I'm not legally responsible for making your bankrupt by listening to my advice???
