cut spending

Small Changes That Will Make a Big Difference to Your Wallet

February 23, 2016 By Amanda Blankenship 1 Comment

You have probably heard about people making small changes that changed their entire lives. Whether it be cutting your grocery bill down by switching to a cheaper store or getting rid of cable and saving the cash every month, there are a lot of little habits you can change to make a difference in your financial life.

Saving money can be extremely hard, however, if you are having difficulty, you can take a few steps to make it a little easier on yourself. Some of the ways to save more money is to simply cut your bad habits.

Stop Wasting Time

If you get into the habit of simply doing something when you say you are going to do it, it can really help with your financial goals. If you keep saying that you want to stop buying groceries from the more expensive (but more convenient) supermarket, why keep putting it off? If you say that you want to stay in more and spend less, why put it off any longer? When you continually put these things you’ve been wanting to do off, you can really put a harmful dent in your long-term financial goals.

Spend Time Not Spending

Instead of spending time doing things that will make you spend more money, why not spend your time doing things that cost no money at all (or help you save money). There are plenty of free days at national parks, you can go to the public library or even look up cheap arts and crafts on Pinterest to pass the time. Of course, no one wants to sit at home and do nothing, but you don’t have to spend a ton of money.

Cut Down Your Activities

Sometimes you like doing an activity for fun. However, that activity is not always a great way to save money. Everyone has something they like to do, but when you stop to think about it, if you participate in the activities you really like all the time, they become less special. Many of these activities also hold very little long term value, so you aren’t getting much from it. If you are participating in something that you enjoy, maybe just dial it down (or cut it out if it is something you can really do without). It can help you save a ton of money.

Find Ways to Make Extra Money

This is another way to change the way you spend your time. If you spend some of your extra time working a second job, blogging for cash or even babysitting, you can earn some extra money. During the time that you are earning extra income, you won’t be out spending money. This is like a win-win for your wallet and your savings goals.

Small Changes Make a Big Difference

Even the smallest of changes, like the ones mentioned can have a huge impact on your life (and especially your wallet). It will take some time to form new habits, but it will be well worth it in the end. Saving money can be hard, but once you get into the swing of things, it can really change your life.

Photo: Flickr: 401(K) 2012

Start Cutting Immediately to Save a Sinking Ship

June 3, 2009 By Jennifer Derrick 11 Comments

An acquaintance came to me the other day and told me a sad story. She has been unemployed since December and unable to find work. Her husband also lost his job around the same time and although he has since found another, they went four months with no income and his new job pays considerably less than the one they lost. When you factor in her unemployment, they are now living on about 30% of what they made before. When all this happened initially, she called the bank that has her mortgage and asked for a period of forbearance. It was granted, but now that time is up and their situation has not improved and they have blown through the savings that they had. The family is now in danger of losing the house, has $40,000 in credit card debt, a loan on a second home, and two car loans. There is almost no money left to eat or buy necessities. The ship is sinking fast. (They probably could not realistically afford the life they were living prior to the job losses, but that’s another story.)

She asked me what she should do. I asked her what extras she had already cut out of her budget so I could get an idea of what might be left to cut. Imagine my surprise when she said, “We haven’t cut anything yet. I thought things would get better by now and we didn’t want to alarm the kids, so we’ve just kept things as usual.” I was floored. This is a family who is in danger of losing everything and they hadn’t changed anything about their lifestyle? What seemed like common sense to me was clearly not common sense to this woman and her family.

When you suffer a serious loss of income, whether it’s through job loss, pay reduction or disability, you need to start cutting extraneous things from your budget. Immediately. If you have a warning that you might lose a job, start cutting on the day you begin to feel uneasy. Every single day that you can reduce your spending means a little more money in the bank should the problem drag on long term. What’s the worst that can happen? You slash your budget to the bone and get a job the next day. Big deal. You can always restore things to your budget when things get better, but if you haven’t cut anything and that new job does not materialize quickly, it won’t take long to blow through any savings you have and end up in danger of losing everything.

When you lose your income, you cannot afford to live in denial. It’s painful, but you have to look at the possibility that the life you knew is gone, at least temporarily, and you have to act as though that possibility is reality. The longer you live in denial and try to keep things “normal,” the more money slips away that may be needed in the future. It may not seem like much to continue getting your hair done or going on vacations while you’re looking for work, but those dollars are dollars you might need for food and shelter three months down the road. The goal when your income drops is to get your spending down to the bare minimum and to stash as much cash as possible, not to try to keep everything the way it was before.

This woman was afraid that cutting spending and admitting that they could no longer afford vacations or toys every time they went to Target would somehow alarm the kids. Kids aren’t stupid. Even if you still take them on trips or buy them things, they pick up on the stress in the household. They hear mom and dad fighting over money. They know that mom and dad are stressed about something. Older kids especially know when something is up. And most kids, after about age six, are old enough to understand the basics of finance. They have a general idea about money, where it comes from, and what happens when there isn’t any. Worrying about alarming the kids should be the least of your worries. They already know something’s up and they are probably more able to deal with it than we give them credit for.

I recommended that she get busy cutting her budget immediately. I recommended all the things we normally talk about here on Saving Advice: Stop spending recreationally, cut out all non-necessities, renegotiate the rates on credit cards, eat at home, etc. I also told her that she needed to get busy selling anything that wasn’t nailed down and sell the vacation home. Still, she resisted. She simply didn’t want to admit that the large, fun life they had been living was now gone. I’m afraid that she will end up filing bankruptcy. The situation might be unavoidable regardless, but her inability to admit to and act on changing circumstances makes it almost inevitable. Had she been cutting from her budget since December and been selling unneeded items all along, she might have been able to spare herself at least some of the problems she now faces. She is likely facing a prolonged period of living in reduced circumstances, whereas had she acted swiftly in the beginning, she might have only faced a few months of a reduced lifestyle.

When you lose a job, and particularly in an economy like this one where new jobs are hard to come by, you have to start cutting immediately. Every cut you make early in the game buys you more time later. It isn’t fun to give up all your luxuries and it’s demoralizing to admit that you’re living in reduced circumstances. But you need to stash all the cash you can to weather what might be a prolonged period of unemployment. Ideally you’d have a large cushion already saved but if you don’t, you need to find money quickly. Every day that you wait puts you one day closer to being in this woman’s situation.

A Life Without Debt: Where to Cut When You

April 14, 2009 By Sadie Morris 7 Comments

I’ve mentioned before that I really like saving money. To me it’s like a game to find new ways to reduce my spending. Constantly finding new ways to lower spending keeps me on my toes and protects me from slipping into careless patterns that could lead to debt. It also frees up more cash that I can stash away for emergencies or my old age, making it more likely that I will remain debt free throughout my life.

The problem is that every year it gets more and more difficult to find new ways to reduce spending. Once the obvious biggies are gone like unnecessary cell phones, cable, expensive clothes, and meals out, while employing the usual savings strategies like using coupons, planning meals, and shopping sales. Once this is done, where does someone like me look to cut spending?

The answer lies in frugality. Some might even say extreme frugality. To cut more from an already lean budget requires looking into the areas of the budget I take for granted. For example, I have a budget category for cleaning supplies. But do I have to buy every cleaning supply? Can I make my own for less? I’ve discovered that I can and it saves me a significant chunk of money every year. I’ve experimented with washing plastic bags and reusing aluminum foil. I make my own laundry detergent. I keep a lot of things like jars, spare parts, and fabric to use for money saving projects. I have a budget for utilities, but I try to never spend the maximum that I budget. I’m always experimenting with my utility use and settings to cut a little more from the bill (or at least stay even with the price increases). I repair rather than replace most things. I learn to DIY as much as I can, even if it’s something I’d rather not do. Heck, I’ve even tried making my own envelopes.

Some things that I try are worth it and work out very well. Others result in discomfort or inconvenience that cancels out any savings I might gain. But I never give up. I’m always trying new things and looking for new ideas. Even in an already lean budget I’ve learned that there are still ways to cut down the spending, if I’m willing to move out of the mainstream and try some strange ideas. I enjoy using my creativity and abilities to save a little bit of money. It requires thinking differently from most people. Most people just accept that there’s no way around buying certain items. I’m always questioning my needs, wants, and use patterns.

If you’re interested in learning how to cut more from an already lean budget (or if you want to slash and burn an overburdened budget) I recommend two books. First, The Complete Tightwad Gazette by Amy Dacyczyn is full of frugal tips that range from everyday common sense to things some people might consider extreme. I read it once a year and I’m always amazed that I can find just one more thing to do to reduce my spending.

The other book is Choosing Simplicity by Linda Breen Pierce. Not so much a how to or tip guide, this book examines the lives of real people who chose to reduce their spending and simplify their lives. It’s great motivator and a book that reminds me of the benefits of living simply and remaining free from consumer pressures.

Do I have to constantly look for ways to reduce my spending in order to remain out of debt? At this point, no. We make enough money to allow for buying plenty of cleaning supplies, foil, and other everyday items. But I like the challenge and I like the freedom that cutting spending gives me. Every “small” amount I save provides me with more money for the larger things I enjoy like travel, and for the things I will need in the future like home improvements and retirement.

I have a mindset that I simply do not like spending money that I do not need to, or that does not bring me great joy. And I hate waste in all forms, whether it’s monetary waste or physical trash. I’m willing to go out of my way to find ways to avoid spending money on items that don’t bring me joy and to cut down on waste. I think that’s a large part of what has kept us debt free.