We are moving in two weeks time and will have to stick to a tighter budget, our living expenses will increase, but I will live closer to work and of course I committed to a gym membership.
The first place I lived in on my own taught me the basics for a tight budget, combined with what I had learnt from my Dad when I was young. We always had to grab a blanket before we could have the heater on, we had to dim the lights in summer (because apparently it makes the house hotter therefore increasing our demand on the cooling). I had just enough to pay the bills, get buses to TAFE, stock up the fridge and get credit for my prepaid mobile I had at the time.
Our new budget won’t be quite that tight but we will need to remember what we’re doing it for, and that the sacrifices we make now will help us reach the goal sooner. I’m also hoping this new budget will help us reduce the amount of fast food we eat, I figure if we do the shopping and having something at home ready to be cooked we’ll be less likely to be reaching for last minute options. We do a lot of that now, and I know it’s hindering my health goal for the year, but I hope to fix all of that in the next few weeks.
For me I like to make a budget either the day I get paid or the day before (since I usually know roughly what I’ll get). I find this way I can decide how much I want to save, rather than waiting for the end of the pay period and putting what’s left in the savings account. I did try it that way but it rarely ever worked and I ended up saving very minimally.
- Make a list of expenses – pay them all upfront as soon as you get your pay if you can (then you know what you have left to work with)
- Decide on a shopping (food and consumables) you’ll need for that pay period
- Tally up expected fuel and travel expenses
- Leave a little bit of “just incase” money and bank the rest
I find this strategy to be really useful, if you’re saving for something in particular I like to work out what I need and figure out how long I would like to spend working toward it and try to stick to the weekly or fortnightly savings it will take to achieve.
The biggest problem is fighting with the urges to buy the things we want. For this reason I think it’s a good idea to have an account for the big item you’re saving for, an account where you deposit small amounts for those pyjamas you wanted, or jeans, and the account you use every day. When I make up my budget on pay day, I do as the bullet points above suggest, but I leave some extra money aside for my days off so my partner and I can go out for brunches. It breaks up the week, gives me a chance to get out, and at the same time helps me feel like I get something for all the hard work. We also use that opportunity to do the shopping on the way home.
Things that help keep costs down:
- Meal planning – cooking dinners at home (you can make more and use left overs for work lunches to save buying lunch)
- Prepare something for work/school
- Ensure you go shopping buying lots of healthy snacks and items for dinners to save last minute pickups that will add up – ensure you have a shopping list, this will deter extra items you don’t need and go shopping on a full stomach
- Look for free activities for the weekend – walk, beach, picnic
- Avoid shops if you can’t afford extra expenses – go to a local supermarket not the local shopping centre
- Stay away from online stores – you are only torturing yourself (ebay, graysonline, etc)
- Hire a movie for a night in rather than going out
- Have lunch or dinner before going out – it will save money and calories
Remember that budgeting isn’t just about paying the bills and saving money, it’s also important to spoil yourself occasionally, and have something to look forward to. I like to plan something for my days off so even if the work week is hard, there’s a silver lining at the end.
I think that watching the account grow can also be a big motivation. I like to keep myself involved in things, preferably that don’t cost too much, unfortunately I took on sewing last year and that was a very expensive hobby, but I’ve dropped back a bit since then and now I plan to start at the gym, so that will help keep me motivated and keep me busy and healthy all at the same time. I also like to keep a money box and put all my change in it when I get home, we recently emptied the last one and got $150 out, I know it’s not much but it still adds up.
If you’re budget isn’t working, it’s like starting a diet. You can’t cut back everything at once, start off with small changes. Try meal planning for the week, if you can maintain that change introduce something else. Look into joining accounts together like mobiles, landline and internet all on the same bill, and having everyone’s accounts together if possible. Make a priority list, and every time you think about making a big purchase ask yourself “what will I really get out of this?” And, decide if it’s worth the sacrifice.
When saving money, remember… Every little bit counts.