As everyone knows these days, money is tight. Even my two-income family has been struggling to make ends meet. We are the very definition of living “paycheck to paycheck”. With no emergency savings fund, we decided it was time take control of our financial situation by using some of the strategies below and by creating a simple budget.
1. Organize – The first thing we had to do was sit down and honestly discuss our finances. While up to this point it had been easy to say “oh we’ll talk about it later”, but now it was time for action. We created a chart that showed both incomes versus what we thought we spent each month. We had separate categories for rent, utilities, credit cards, gas, groceries…anything we spent money on during the month. We even had categories for purchasing music on iTunes and a night at the movies.
2. Track – Now that we had our “estimates” in place, we kept track of every nickel we spent for a full month. We had no budget in place at this point, we just wanted to see how close our estimates were and what our spending habits looked like. Boy were we shocked! Our actual spending came in at over $500 more than what we thought we thought we’d been spending, The biggest culprit being take-out restaurants.
3. Make the sacrifices: Now that we had a more realistic idea of where the money was going, we came up with a plan to lower that amount. While there wasn’t a whole lot we could do with the rent or the utilities, we still found plenty of places to make cuts. After looking at our budget we determined we were spending $100 a week on groceries, and nearly $150 a week on meals out! That came out to nearly $600 a month. We decided to increase our grocery budget slightly, and vowed to cook at least 6 nights a week. The financial goal was to limit the $600 restaurant bill to under $200 the first month. It was hard at first, but then it started becoming fun, trying to find new recipes to cook and often cooking meals together. We didn’t even have to increase our grocery bill that much, just make smarter choices. We started finding foods and recipes that we could get more than one meal out of, or fresh ingredients that would last for multiple meals.
Brown bag it – Another way we cut the food bill down, was taking our lunch to work. Many people do this already, but with our busy schedule it was just easier to have food delivered to the office or to grab a quick lunch on the way back from an errand. Just like in elementary school – we started packing a lunch box every morning. While it was tough at first (especially with pressure from co-workers!) I actually became quite used to it. It really became a part of my routine. Plus, with being able to eat a packed-lunch in my office, it freed up my lunch hour for important tasks or errands.
After one month, we went back to our little chart, checked our online bank accounts and tallied our receipts. The results were shocking. We averaged around $130 a month at the grocery store, and cut our restaurant tab to $165 for the whole month! An added bonus? By losing the take-out, I lost 12 pounds!
No more date night – As a woman, this one was difficult! Nothing kicks off the weekend better than dinner, drinks, maybe a movie with your sweetie. The problem was the price tag. A nice meal our followed by drinks and a movie could easily total $80-$100. Multiply that by ever Friday or Saturday night and you’ve just practially doubled your rent. So, we compromised. We loved our date nights together, so we decided that instead of one every week, we’d cut that to once a month. We then created what we called “mini-date nights”, where instead of dinner and drinks, we’d cook a semi-fancy meal together at home, and do something together like a nice long walk outside, or a competitive night of Mario Kart Wii. We saved nearly $250 a month by doing that, and it made those nights where we actually did go out even more special. We had gotten so used to going out every weekend that we had forgotten why we were going out in the first place!
DIY – Another thing we found from our chart was that I had been spending close to $60 a month on manicures and pedicures. While $60 a month may not sound too bad, total that up for a year and you have $720 dollars. I can think of better uses for $720 than nice nails! So, I bought a nice manicure set and some pretty colors all for around $15, and began doing them myself. As I quickly found out that while I am not as skilled as a professional manicurist, I at least can make them look presentable. Now I go to the nail place maybe once every six months, as sort of a “treat” for good saving behavior.
At the end of a 6 month period we were able to pay off our remaining $600 credit card debt, and save up an additional $1500. We are still making adjustments to our budget constantly, but are planning on using some of our savings to take a much needed summer vacation!
