As a single mom, money is on the top of my list of things to think about on a daily basis. You could say that I obsess about it. I balance my checkbook every day, and am never off in my money assessment. I know how much free money I have, and how much I am not allowed to touch so that my responsibilities are taken care of throughout the month. I wish it were different, that I could spend money without abandon and never have to worry about what I will have to give up from my grocery shopping list if I buy a cheap pair of gloves to keep my hands warm. But it’s also a reality. Do I consider myself unfortunate? Hardly. I am lucky to have a home to live in, money to buy groceries, the ability to afford my bills, and enough leftover at the end of the month to add to my savings. There are many families out there that have way less. But our household does live on a tight budget to make things work, and I wish to pass some of the tips we’ve learned your way.
1. Know your balance. I’m not just talking about what your bank account says you have, I’m talking about what your true balance is. Write down every single thing that comes out of your checking account as soon as you spend it. At the end of every week (or more often, if need be), cross check your expenses with what has cleared through the bank. This will help you catch any expenses you may have forgotten to include in your balance. It will also help you be aware of everything you are spending money on.
2. If you don’t have the money, don’t buy it. Paying with a credit card because you do not have the cash on hand does not get you out of paying the bill. You just have to pay it later, with additional interest applied. In the long run, paying with credit is actually more expensive. And it also opens up the possibility of never being able to pay it, ruining your credit. I do not own a credit card. I live solely on the money I currently have, and that’s it. If you find yourself whipping out the card to buy yourself a new pair of jeans, question whether it really matters if you buy them now, or wait until you have the money in hand.
3. Map out your bills. My job pays me twice a month. The paycheck I get in the middle of the month is dedicated to all of my bills, grocery and gas money for the entire month, and a little to put in savings. The paycheck at the end of the month is dedicated to the next month’s rent. Before I allow myself any “free” money, I subtract all of the bills I have to pay with that paycheck. That way, if I’m ever “broke”, I at least know that my bills will be paid.
4. Savings. You’ll notice that I keep referring to my savings. I cannot stress this enough – save your money! Instead of eating out, buying coffee, or enhancing your wardrobe, throw your extra money into your savings account. I have gotten so that putting money in my savings feels just like spending it on something fun. I know the money is there if an emergency comes up. It’s also good for expensive events that are coming around the corner – like birthdays and the holidays.
5. Pack your lunch, and make your coffee at home. Sure, that $6 lunch or that $3 coffee isn’t very much to spend in one sitting. But if you’re doing this on a daily basis, how much is it costing you? About $200 a month! It’s so much cheaper just to keep a steady supply of coffee beans and lunch meat at home for your daily food needs than it is to indulge in a bite out to eat. Plus, the lessened caloric intake from a brown bag lunch will go easier on your waistband.
6. Make dinner, and lots of it! Eating out at night is even more expensive than lunches during the day. It costs so much less to just make sure that your fridge is always properly stocked. And if you create larger meals, you can have dinner for the next two or three nights. Our family loves the Crockpot for this very reason. It’s easy to create a large meal with very little prep involved. Dinner is ready when you get home from work. And there’s enough to stretch the meal over several dinners. Get your family used to leftovers, or just learn how to creatively disguise leftovers so it seems like something different every night.
7. Find alternatives to fun. Want to go to the movies? Rent a movie instead. In desperate need of a manicure? Do it yourself at home with your girlfriends. Need some new clothes? Consider consignment or thrift shops (btw, I totally scored on a cute skirt and shirt outfit for a total of $6 the other day, and no one was the wiser that it was secondhand). Itching for a gym membership? Spring Lake has some awesome hills that will work those quads in no time. Just because you are pinching pennies does not mean you have to give up on having fun. You just have to be frugally creative about it.
8. Nix the bills that you don’t really need. PG&E is a must, so you can’t give that one up. But there are other bills you should think over about whether they are really necessary or not. For us, we decided against a cable bill. Sure, it sucks sometimes not having a TV to tune out with. But it was the least important of all our needs, so we live without it. Is there a bill you are paying for something you could live without?
What are some ways that you are being frugal to stretch your income?