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.
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