We’ve been trying to watch our budget a lot more closely, now that we’re attempting to live on one income. With our income slashed significantly — I’m phasing out of my corporate position while my spouse works to launch a startup — our household isn’t really getting much money into its coffers. We’re expecting a couple of pretty lean years ahead of us, which means that we’re now readjusting our budget to try to fit the new financial reality we’re anticipating.
We expect our expenses for the next couple of years to be covered by whatever income we can drum up through various freelancing projects, independent contracts and business income from home businesses (including this blog!) that we can collect. We have some bonds and cash throwing off some interest, but it’s not much…and as much as possible, we don’t want to touch our stock investments whose dividends we continue to reinvest. We anticipate that there will be some investment funding for my husband’s startup that will be coming through before the year is up, so hopefully, this will help him bring in a regular salary at that point.
Yup, we’re living on very low cash flow for a while, all to see where a startup notion will take us in the next 3 to 5 years. With our income low, we’re expecting to be “in the red” for these years, living off of savings we’ve accumulated up to this point.
We’ve thus taken drastic action and are striving to shrink our budget as much as we can afford to. Here were some of the latest moves we’ve made as first steps to a smaller budget, which I can still somehow accept without getting too depressed.
Trying To Live On Less! Our Latest Frugal Moves
#1 Vanity is out the window.
We’re not really the vain types to begin with and I don’t go to the salon that often. It’s been a far cry from my younger days when I primped, styled and always had a fresh wardrobe. These days, we grow our hair a little longer before visiting the barber or hair stylist. We shop a few times a year for clothes, and only to replace old and worn pieces that should no longer see the light of day 
. And I keep the makeup to a bare minimum. I’m also proud to say I’ve got “programmer’s fingers” — nails cut short, no manicure, plain, clean, functional.
#2 Recycle as much as we can.
We’ve been in the habit of picking up used items, as well as selling some of our extra things for the extra bucks or donating to the Salvation Army for the tax breaks. We’re just planning to step it up a notch this year and turn more of our gently used items into cash.
#3 Regale in our homebody existence.
We haven’t done any exotic traveling for a while… actually since we’ve had our kids over the last half decade. I suppose we’ll just have to wait a little longer before subjecting everyone to trips overseas. Our dollar won’t hold up too well outside of our borders so all our family trips are currently scheduled within driving distance from our home. It also helps that we are homebodies by nature.
#4 Delay home projects.
Several years ago, I had quite a number of home improvement plans that I had scheduled out into 2010, if you can believe it (yes, I enjoy drafting 10 year plans… ). Well, time flies and I’m supposed to have begun a few of these home projects, which we had wanted to do to accommodate the growth of our kids. Their bedrooms need to be revamped at some point, some carpets need to be replaced, and I hoped to refinish some floors as well. I’m sure there are a few others I have on my list, but for now, all these plans need to go on the backburner simply because we cannot afford to do any of them any time soon. I mentioned before that we have two left hands (e.g. we’re not very handy people) so doing it DIY is not an option. So I guess we’ll be waiting a while before we see any transformations in our home.
#5 Eat less 
.
Both my spouse and I need to be on diets anyway! We’re both slightly overweight and need to lose weight and slim down a bit. So far, I’m happy to report that I’m picking up much less junk and soda than I used to. Though we’ve gone organic on many food items, we’re eating less and wasting less, bringing our grocery bill down this way.
#6 Run our cars to the ground.
I admit, our car buying patterns weren’t the most frugal. We’d buy new cars, then flip them after they’d reach 100,000 miles, replacing them with what else, but new cars. Each car we had would last us around 6 or 7 years before we replaced it. Today, we’re going to join the rest of the frugal crowd and start running our cars to the ground. We’re betting on saving many thousands of dollars by doing so, and deferring costs way into the future, when we can afford replacing the cars we have today! According to Consumer Reports via CNN Money:
By keeping your car for 15 years, or 225,000 miles of driving, you could save nearly $31,000. That’s compared to the cost of buying an identical model every five years, which is roughly the rate at which most car owners trade in their vehicles.
Besides, this guy has always inspired me!
#7 Consider public school or more affordable private schools.
Okay, this is a non-issue for most people. But I have to point out that most people I know have made the choice to send their kids to private school. Some can definitely afford it(!) while others are sacrificing greatly by going this route. Several are sending their kids to public school only after forking out huge amounts of money to snare homes in areas with the best public school districts around. For a while, we weren’t sure what we’d do (as we had wanted our kids to attend a school that exposed them to our faith) but now we know. Our decision was influenced quite a bit by our financial situation, but we’re also glad to have found some options in a parochial school that turns out to be 70% cheaper than most private schools in our general neighborhood. If one chooses private school where we live, they can expect to spend $25,000 more per child per year. It’s out of this world I tell you (though not surprising as your kids would be competing for spots in these schools against the kids of loaded dot commers and VCs out there).
#8 Less impulse buying.
I’ve seen some huge changes in my buying habits in recent months. I’ve become so busy over the last couple of years that it’s left me less idle and less interested in shopping, buying, consuming. These days, if something I like catches my eye, I file the item in my “wish list” and do one of two things: (1) request it as a birthday or Christmas gift or (2) forget about it totally. It’s worked like a charm so far and has reduced impulse and unplanned buying significantly! I’ve also successfully replaced the time I used to spend catalog and window shopping with time spent on home business projects I’ve decided to take on.
#9 Do things ourselves.
I’ve mentioned before that we’re not very handy people so we do spend money outsourcing a lot of work we could otherwise do ourselves. But these days, we’ve done a few jobs (mostly home repair work) on our own to save the money. Also, loyalty and relationships go a long way. We’re loyal customers to a home maintenance service guy who I now consider a good friend. We’ve given him good business in the past and these days, he’s volunteered a lot of “freebies” (free services) to help us out when we need it. He knows of our financial situation and has given us some slack while times are lean.
#10 Replaced our appliances with more energy efficient variants.
Sure, it’s an investment when you pay up for the new-fangled fridge, washer or dryer that are now available with energy saving features. We spent around $2,000 to get a new refrigerator and washer and we’re very satisfied with the purchase. We’ll break even with this expense in a few years as we save 25% on our utility bills each year, and we’re also being kinder to the environment. Rebates have helped with the purchases as well, so we can’t complain. Lastly, we’re saving on dry cleaning bills because we found out that our delicates and other linen that we’d pass on to professional cleaners can now be handled perfectly well by our new washer.
I believe a lot more can be done to tighten our belts further, but as I mentioned, by doing so, I’ll probably end up getting depressed over more radical changes. Many of our current fixed expenses are tied to maintaining our house and just supporting the daily needs of a family of four (plus additional relatives who stay on with us now and again). Our budget could use more trimming, but I wonder whether it’s worth it to do something more drastic.
Image Credit: Redbook Mag
It seems like you covered your budget in every category. Hopefully the frugal living will result in lavish luxuries in years to come.
Thanks, theWild1!
I sure hope those lavish luxuries come along one day! Wonder how long the wait will be!
I find it interesting to see what different techniques people have applied to saving their bucks. Everyone does their own thing and tolerates different types of belt-tightening activities. I happen to choose those activities that are easy to do and fall in line with our lifestyles anyway — to limit the pain and dread of having to live with much less than we’re used to. (Not that we’re spendthrifts anyway — on the contrary. But dealing with less than what you’re used to can be painful no matter how frugal you are to start with.)
I could also stand to eat less. It’d help me save money as well as stay healthier. Good call.
I’m ashamed to admit that I complain about $4,000 per child per year for our private school for our three kids.
Those all sound like great moves. What’s best is that you’re set up well for them. Not going on vacations isn’t a big deal to us, since we’re homebodies. I like to cook and I have time to make big pots of food, so going out to restaurants isn’t necessary. Some people aren’t as well-suited to more frugal living.
@Fiscal Musings
Some eating tips: I don’t eat after 6 PM so my dinners are now much lighter than how I used to have them. So yes, I cut down on food and have opted for quality (tastier fare, occasional gourmet dishes, organic ingredients) over quantity (eating less overall) and I am probably still ahead money-wise! I’ve got friends who skip breakfast and load it up during dinner and they’re paying for the milk and cookies at 11:00 PM with bigger waistlines.
@Ron
I guess you saw the crazy rates we have for private school in the Bay Area. It’s considered cheap if you find one where tuition is $7K a year per child. The $25K a year schools are really pretty elite though, and kids from really wealthy neighborhoods go there. Some parents I know have their kids attend these schools but they sacrifice a tremendous amount elsewhere in order to afford it. Some are also on financial assistance (there are a few slots per class to accommodate these situations). Each class has a student-teacher ratio of 10:1. Given budget cuts in California, many feel forced to go private despite the expensive real estate around here. It’s sad.
@Mrs. Micah,
One can really save by staying at home more. Unless of course we end up spending the money on more home entertainment. But Netflix and Tivo aren’t all that bad are they?
You have a very focussed approach to getting at your goals.
I wish you every success along the way to your freedom goals.
Best regards
Your approach seems very reasonable. I agree with you that cutting too deep will create depression, and eventually you will resent your whole plan. Best to cut out all frivolous spending, but leave in a couple splurges to celebrate life.
Very good points. I personally have had good luck by giving up TV (as recommended by James Brausch). I don’t miss it much anymore and get a lot more done. My cable bill used to be over $100 per month, and that is gone now.
Excellent article. Thanks for sharing all your tips! I especially like the “Run our cars to the ground” tip. It always worries me slightly when friends buy new, expensive cars without realising the amount they’re paying on the loan.
An occasional luxury here and there can be afforded. Saving money in different ways or by putting off purchases you are working toward living within your means. This is great.
I’m living the frugal life - by choice but I do splurge once in a while. I use coupons and only save the ones I might use. Couple that with borrowing books, dvds and cds from the library my entertainment budget goes farther.
http://www.urbanfrugal.com
So you spent $2000 on appliances, where $1000 would provide the same energy saving and most likely will look just as great.
Face it - you have just wasted $1000 for : 1)style 2) prestige 3) what would our friends say 4) but this doesn’t look so flashy 5) I cannot LIVE without the Sanitize function (of my dishwasher) 6) etc. options.
In my book this is WAY above the level of frugality one should aim for, especially when claiming to Save for the years ahead.
But then again - this is your own life - so - Good Luck!!!
@The Puzzled One
Nice. Thanks for your opinion. I like dissenting ones as they make me think twice about what I’m doing. Could I be doing things better? Well, in this case, where you point out that $1,000 in appliances would be better than $2,000, money-wise, that is of course a feat I would like to achieve. But with rebates and the fact that these appliances have brought down our utility bills by 25%, we’d effectively break even on the purchase of these appliances in around 2 or 3 years.
Weirdly enough, by keeping with our junkers (our decades old appliances), we’d be spending MORE money via higher utility bills.
What we did was buy the right-sized fridge and washer to fit with our home. It turns out that they’re a great fit, making them the right investments for us. I say we made the perfect decision.
I just want you to know that I have been following your plans with interest. I think you are so brave to be taking the risks and making the changes that you are making. You’ve also inspired me to look into smaller, less expensive parochial schools in our area to see if we too can find an alternative to the $18,000 per year school that is currently our first choice. Good luck!!!
I think this period is a great investment in yourself. Continue to work hard and it will happen; probably fast than you think, but hopefully less then you plan for!
Good luck on your project! You seem pretty determined to cut down all your expenses! That will leave you a lot of room to spend once your husband’s startup goes public ;-D
Great ideas! If there’s a FreeCycle group in your area, you can give and receive useful used items there, too. It helps keep the landfills from filling up to fast!
Thanks for participating in this week’s Carnival of Family Life: St. Patrick’s Day Edition at Colloquium! The Carnival will be live at midnight (Pacific time) on March 17, 2008, so drop by and check out all of the wonderful submissions included this week! Happy St. Patrick’s Day to you!
Haven’t been around at your site for awhile - glad to read of your new routines.
Downsizing to a more frugal life isn’t so painful when it’s for a greater goal, so I don’t think you’ll find it too difficult.
One wonky point: recycling is when you take a product and downstream it, turning its raw material into something else. ReUSING is what you’re talking about, and it’s more energy/environmentally efficient, because you’re preventing the production of duplicate items. So bravo!
Freecycle is great for targeted needs. You might even snag some carpets for the kids’ rooms - sometimes sellers recarpet to stage a house and the new folks don’t like the carpet. I’ve seen wall-to-wall offered on our local FreeCycle.
Good luck in your endeavors!