Now that we know what our money situation is and set some financial goals we can look at how we can achieve those goals. The two main ways to reach money goals are through reducing outgoings and increasing income. This week we will explore some ideas for ways to reduce outgoings. You may have additional methods that have worked for you and I would love to have anyone share what they can so others can be inspired to start shaving expenses to painlessly reach their goals.
It can often feel like things are out of our reach, but trust me that for any family with income (even single income families) you can set goals beyond the basics of living. What is key is knowing your values and priorities and making your life work for you. If you want to travel, don’t get caught up in “keeping up with the Joneses” with a bigger house than you need or more car than you need. You have to be willing to give up living for appearances and start living your life your way.
Little changes add up
If you find it hard to cut things out to save money since you feel you don’t overindulge (or believe cutting out small things don’t add up to much) annualise your potential savings. As an example if you currently grab a coffee while out and about at least a few times a week look at cutting two coffees a week. Most coffee places by me are an average of $4 a cup (and some higher) so $4 x 2 x 52 weeks is already adding more than $400 to your savings goal. Make that coffee at home for very little and you will not even feel that change.
Change how you eat and prepare meals
Meal planning, eating seasonal ingredients, eating at home instead of some of your restaurant or take away nights all lead to reduced food waste and a big way to save money.
Compare and save
Get comparison quotes and negotiate services and fees that form the bulk of your monthly and annual outgoings.You have nothing to lose by asking and only have to invest a little free time. Look at your mortgage, car /home/ life/ health/pet insurance, utilities like gas, water, electricity, technology costs like home phone, mobile and Internet plans, etc.
Use free (or cheaper options)where possible and save money
Use your library for books, CDs, movies, magazines, games and newspapers
Rent rather than buy- movies, games, cars, equipment for a DIY project
Swap with a friend, family member or neighbour – everything can be swapped including clothing, books, furniture and tools. Buy a new tool with your family or a neighbour and share ownership saving everyone money.
Replace store bought cleaning products with homemade versions using simple ingredients. A little time up front can save you hundreds of dollars if not more. A side benefit can be the Eco friendly factor.
Barter services
Offer your sewing skills in exchange for babysitting/ after school care for your children, mow the lawn of a friend who can do some tech stuff for you instead of hiring someone, etc
Use reward cards, store cards and valuable credit cards (responsibly)
Don’t use these and spend more than you can afford, but if you are going to shop you might as well save money or earn rewards. Each year I receive a handful of free offers from my favourite stores at my birthday (at least $10-20 each), my credit card (paid in full each month) earns me frequent flier points which I use for travel or to buy needed goods, and some store cards give me special offers to save money on my regular purchases.
Try a no spend month
While it can be hard to cut out all those incidentals and extras committing to doing so for one month can feel reasonable. You would be amazed how much money you can put aside when you choose to stick cash in a savings jar instead of buying that magazine or family block of chocolate.
Take a month where you eat from your pantry and freezer.
You are forced to get creative, stretch ingredients, avoid foods spoiling or being wasted and can buy fresh food as needed.
Avoid wasting money
Everything from slowing down so you don’t have to replace broken items (I once dropped a mug on our stovetop cracking the top and causing hundreds of dollars damage). Replacing items lost or broken can add a lot to your annual expenses. Set up systems to put things in their “homes” so you can find them when you need them. Take care with your goods through regular maintenance, cleaning, treating stains on clothes immediately.
Set up direct debit payments so you don’t waste money on late fees. Spend only what you can afford so you are not paying interest on credit cards. If you need to buy big ticket items that you cannot pay for in full up front then look at stores that do interest free deals. You might have to choose a different model than you wish for, but saving a lot for your goal may make it worth it. Fees and interest is dead money that can be avoided.
Shop online
You might be amazed at how much you buy that is unplanned. I know I go into a store with a plan or list and when I check out there are almost always impulse items added. By shopping online you reduce the chances of impulse buying (at least for many of us who are only swayed by what we see). If you create a grocery list on your favourite supermarket site you are less likely to “toss in” three extra snacks if you have to actually search for those items. If you go online to buy that book you wanted and pay and log out immediately afterwards you are less likely to log back in for more books, but in the shop you might find your way to buying 3 extra books you feel you can’t live without.
Being able to browse and leave items in your cart for a while or create a wish list also means you can delay purchases long enough to change your mind or buy them when a sale starts.
Choose how to spend your money wisely
What serves you and your family?
What truly makes you happy?
What do you need?
What are you buying in an attempt to fill a need not being met?
Challenge this week: Decide ways you can commit to freeing up some of your precious income. Invest some time, some planning and watch as things add up. What is your goal? Break it down into smaller amounts like a monthly amount and find ways to shave expenses from each month.
Find your simple,
Deb
Photo credit: Money image from flickr user 401(K) 2012
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{ 3 comments… read them below or add one }
I have done so many of the points you mention above.
We don’t buy books (although I did just break that rule for Christmas ones but these will be put away for most of year and cherished for that one month of the year so hopefully will last a long time), I despise paying late fees on bills or for a paper bill (yes a phone company does charge $2 per month for you to receive that bill on paper) meal plan, take drinks with us from home to avoid buying when out, etc..
The little bits DO add up, at first it does not seem much but over time a big difference can be found in the hip pocket and in the mind as it is that little bit less stressed knowing one’s money is not being wasted or stretched too far
Stacey-Lee recently posted..Merry Handmade Christmas: Star Decorations
Hi Deb,
Happy Holidays! I hope you are having safe travels in the US this holiday season. This time of year is a great time to approach finances. I have been working for the past 4 years on paying off my debt. When our children were young my husband and I made sacrifices for me to stay home with them. We had one income, a tight budget, and a goal & vision in sight. When the children became teenagers everything changed. They wanted what their friends had, electronics, cars, clothes, etc… They had to be on the travel soccer team, gymnastics, dance, swimming, etc… We thought we had to give them everything. Keeping up with the Joneses. After 25 years of marriage 2 kids and 1 dog. We were several thousand dollars in debt. The past 4 years we have refocused our vision & our goals. We read The Money Makeover by Dave Ramsey to help motivate us to get back on track with our budget and our spending. We don’t follow the cash envelope system, but we have made a huge dent in our debt. We are 6 months away from being debt free (except for our mortgage)! We plan to sell our home in 6 months (the market willing) and move into a camper until we can save enough money to build a house–debt free.
Three things I learned over the past 29 years of managing (or lack of) finances:
1. Live with the end in mind. One day your kids will be gone and making their own family, and you will still be paying the debt you accumulated while they were at home.
2. Have a system, any kind of system to track your spending. Share it with your partner. Managing your money should be done as a team for accountability.
3. The best memories my children have are the ones where we had a picnic in the park, the beach, or the living room. When we were all together laughing and enjoying each other with little or no cost. You don’t have to spend money for your children to be happy, they need you more than they need money!
Follow your dreams! Happy Holidays!
Denise
Boy do I need this at the moment. Money seems to be flying out of my hands. I’ve had a month out of SYLC but I’m planning to catch up with the program this week. I’ve missed it!
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