Life On Less: A Pay Cut And What We’re Doing To Save Money

The bummer-of-an-economy hit home with us a few weeks ago. My company issued pay cuts to all employees in an effort to ward off having to take more drastic cost-saving measures down the road. It’s obviously not news I wanted to hear, but I was certainly grateful that it wasn’t worse. When I told Sherry about it, we shared some moments of disbelief, anger, and worry. But over the following days we slowly embraced the reality of having to live on about $400 less per month.

You guys know that we’ve already adopted a pretty affordable lifestyle and pride ourselves on being able to live life to the fullest even when our wallets aren’t (Sherry gives me haircuts, we’re a one-car household, we eat in all the time, I brown bag my lunch, etc). But we’ve gotta be honest: four hundred beans seemed like a lot to cut out of our already no frills budget. We don’t have it 100% figured out yet, but I thought we’d let you in on how we’re planning to adjust so far.

1. Kick my iTunes habit: It’s small, but I can keep a few bucks in our bank account 99 cents at a time by being a bit less iTunes happy. Music is to me as shoes are to Sherry (yeah old school SAT-style analogy), so I’m trying to absorb my pay cut a bit by rediscovering my existing music collection, and turning to Internet radio and YouTube when I want to enjoy playlists of new music.

2. Pause my gym membership: I work out at the Richmond area YMCA, and primarily use it as a place to shower after a lunchtime run downtown. By simply shifting my runs to mornings or evenings I can shower at home, where it’s free. And since it won’t cost me to restart my membership, I won’t be penalized for taking a break. Though Sherry will have to do without my rippling muscles for a little while (please note the sarcasm).

3. Trim our vacation by a couple days: We’d saved up for a week-long road trip to Atlanta, Savannah and Charleston, but we decided to cut back a little by holding off on Charleston for next time. Shortening our little trip by 2 days put almost $250 back in our pocket in hotel fees alone. Plus, we can’t complain about the extra time that we spent relaxing in our own home sweet home instead.

4. Watch movies at home: Movies are probably second to my music obsession, so we try to allow ourselves a couple of trips to the theater each month. Instead I’m just going to practice patience this summer and rely on our Netflix subscription to satisfy my craving for cinema.

5. Cash in some credit card points: Sherry and I have gotten into the habit of using our credit cards to pay for just about everything. Not because it allowed us to buy things we can’t afford (we pay it off in full each month) but because it’s an easy way to track our spending. A few years of this habit later, we have wracked up quite a few points and have finally decided to trade them in for some bonus dinero.

6. Remember our refinance safety net: The great coincidence of all this is that my $400/month pay cut came just days after we refinanced, which reduced our monthly payment by – you guessed it – $400 per month. Maybe it’s all a big financial joke the universe is playing on us, but we’re still planning to have the last laugh. We hope to be able to continue to overpay our mortgage each month, but find comfort in the fact that we can reduce our monthly expenses by exactly $400 by letting that go if we encounter any unexpected expenses.

All in all, we’re pretty optimistic about everything. With Sherry having earned a variable freelancers income for over 3 years now, we’re well versed in adjusting our spending based on how much we’re bringing in each month. So ’til the economy gets better (knock on wood) we’ve got our noses to the grindstone and our hands out of the piggy bank. Have any of you guys felt the financial pinch especially hard lately? We know we’re certainly not the only ones with employment woes, so feel free to commiserate or, better yet, offer up some money saving tips or words of encouragement to the group.

And speaking of money saving tips, check out our other moolah-related posts which list a bunch of things that we do to keep cash in our wallets and smiles on our faces. Here’s the first one, the second, and the third. Happy saving to one and all.

Comments

  1. JM says

    eck, I’m sorry to hear about your paycut – but very happy to hear that you still have employment. My company (a very large corporation) just went through its 2nd round of huge layoffs, so am with you and just very happy to even have a job at this point. In order to cut down on costs where we can, my boyfriend and I have taken to making a lot of every day necessities ourselves – for example, laundry soap and softener, dish soap, cleaning liquids, even peanut butter. We Googled for the recipes and then bought most of the ingredients in bulk, thus getting more bang for our buck. Plus it makes us feel a little more green in the process. By the way – definitely visit Charleston on your next trip down south, its a wonderful city!

  2. says

    Thank you so much for sharing! My husband had the same thing happen at his job and we’re trying to cut back as well. I’m hoping that maybe this will help train us to live on less and maybe in the end we’ll be able to save even more! (We’re hoping to buy a house next year.) That’s my silver lining.

  3. SSM says

    I live just south of you in Yorktown. In reference to #4, hubby and I utilize AMC’s $5 before 5 promo a lot. Mon-Thursday it’s $5 all day and then on the weekends it’s $5 before 5pm. I’m not sure if there’s an AMC in Richmond or not, but on a Sunday at noon, it’s great to catch a flick for just $10 for the two of us.

  4. Erin says

    Sorry to hear that. I also just took a 10% pay cut . . . but I’m happy not to have been laid off. Good luck with the cost saving measures. I hope you will share how things go.

  5. says

    I’m sorry to hear that! You guys are so smart and on top of things though, that you will get through it just fine.

    And yes, we’ve felt the effects. My dad and one of our good friends were laid off, and my husband’s business has been slower than usual. I think we’re all stretching a bit right now.

  6. Nicole Greene says

    Hey – LMK if you would like a FREE weekly Redbox rental code – to be used on Monday nights so that you can have FREE movie night – oh and you can rent MORE than 1.

    Plus – Couponing IS THE WAY to go – to get name brand stuff for so inexpensive! Except for all that great produce!!!! My price point is $1 – so I do not pay over $1 for anything that I buy that has a coupon.

  7. says

    Hello there! Just started reading your blog–love it. Great ideas. I am from Charleston and think it’s so sad y’all have to cut that out of your trip. It is, quite simply, an amazing city.
    A tip on movies: if there’s a redbox near you, use that. There are tons of free codes (redbox, dvdonme, breakroom, to name a few) that work once per card. My husband and I rarely pay for movies anymore. And even if we do, it’s only $1 per night. Good luck!!

  8. says

    Sorry to hear about that John, that sucks. But you’re right, what the money fairy givith, he taketh away! It always seems to work that way. I’ve def cut back on my iTunes purchases and listen to Pandora all of the time instead of buying and it helps! Good luck!

  9. Lauren says

    Sorry to hear that. My husband was laid off in November and he was without a job until January. We had to cut out things that were not needed and it amazes me how much you don’t actually NEED (eating out, going to the movies, extra shopping trips etc).

    It really turned out to be a blessing because it taught us how to save, and now he likes his job more so than he did before.

  10. says

    So sorry to hear that you’ve been hit by the hard times… but take comfort in knowing that you’re not alone. No worries. You’re thrifty folk, and you’ll make it with no trouble at all!

  11. courtney says

    You should think about couch surfing for your vacation! I have not actually couch surfed myself but I have hosted about 5-6 couples and it is awesome! I’ve had a great experience doing it. You get to meet cool people and find out more about the local hangouts rather than just tourist spots. You should check it out!! couchsurfing.com

  12. says

    Thanks for the honest post! I’ve always been impressed with how much style you guys have on such a “practical” budget, so I’m sure you’ll be just fine. This is just a thought, and it’s completely unsolicited, but what if you hold off on overpaying your mortgage…just for a year or so. Maybe instead you could put the amount that you would have overpaid into savings…for a rainy day… Regardless, I LOVE your blog!

  13. says

    You two certainly aren’t the only ones and to be honest I personally find comfort in the fact that it’s not just me. On the bright side you do still have a job which as you know they are slim pickin’s right now. My fiance’ works in the blue collar field of roofing and gutter repairs so when he didn’t work the start of 2009 for almost 2 months I thought we were done for! The thing is no matter what you always get through it together – for better or worse. Luckily, I forgot all about that wonderful time of year called tax season so it was a pleasant and much need surprise to have that forgotten cushion. Now Travis is working pretty regularly for the most part which is great, but I know we’re not out of the clear just yet. We’ve been eating in a lot more up until *dun dun duuuunn* our fridge decided it had an alter ego and was really meant to be a freezer so that was a bite but if all goes as planned it’ll be a fridge once again when I get home today!

    I can totally relate to your iTunes obsession. Music is my life soundtrack. Like you and Sherry I too had the credit card points so I cashed some in for a nice $25 iTunes card, $100 to Sunglass Hut, oh and I also used some points towards last years Christmas presents!

    On a last note I took a debt class year which was much needed because my spending got a bit out of control and it was the best $90 smackers I’ve spent. Ever since I’ve been insanely frugal. Sometimes it’s to the point where I tend to drive people a bit crazy. I’m always looking for the best deals so if I buy something and go to another store and it’s off by a dollar I’ll take it back and buy the cheaper one! I’m a big fan of returns! Remember the 24-hour rule too! Keep the things that you purchase (not necessities) and if it’s something you still need keep it if not take it back! It’s saved me hundreds!

    I wish you both well! Hang in there you’ll get through it! I am!

  14. Beth says

    You guys are so great at cutting costs- you should be proud! My boyfriend got laid off 3 weeks ago, so I am the only one earning any income at this point. It’s pretty scary when I can barely afford our mortgage, let alone pay for 2 people to live, eat, etc.

    In the end, just be very thankful you still have a job! We are still thatnkful that I have my job because hey, it could always be worse! Keep up the good work.

  15. says

    I’m an auditor by trade, so with the nature of the job, we typically see a lot of layoffs and paycuts from the audited companies. Every time I have to look at these events, I always feel so bad. However, I guess this is the first time that I understand the monthly impact that each paycut can have. I guess at the very least, there is still a job for you.