Life On Less
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 weeklong 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.
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Comments
My husband and I are all about life on less. We just recently left our “by all appearances wonderful jobs,” that we did like and believe in, to pursue more time for ourselves, each other, and also what we love. Even before that point though, being that we are remodeling, we did without what some people couldn’t live without. We like life simple.
I would encourage you to check out the latest happenings in Congress regarding credit card legislation. The Fed just made it so that people who have wracked up debt on their cards cannot have their interest rates raised. WHich means that forces credit card companies to hike the rates for people who pay off their balances monthly. B/c of this the lucrative incentive programs are likely to be dismissed, also. CC companies are going to have to find other ways to make money than off the people locked into debt, and this will prob be through the fiscally responsible.
I cut back on iTunes with Pandora.com and mixpod.com. Great alternatives! I love Pandora and it plays on my computer at work all day. Good luck!
A big thank you to John & Sherry and to all of the commenters here for these helpful suggestions. We’ve been tightening our belts here because of my husband’s salary cut and my lack of luck on the job market. We’ve managed to save through phone calls to our car/home insurance, cell phone provider, and the cable company. What’s infuriating to me, though, is the constant stream of notifications we’re getting in the mail from our credit card companies letting us know that they’re jacking up our rates to completely ridiculous levels. So far, no luck talking them down, and we’ve only canceled one because we don’t want to decrease our available credit too harshly (to keep our debt-to-credit ratio nice and low). We always pay on time, so I guess the companies are getting their increases in before the credit card reforms that have been signed into law take effect. Re. Sherrie’s comment just above, people who have racked up debt will definitely see their interest rates go up – just not on their existing debt. I think the reforms are a really good thing, I just wish they could have been implemented more quickly so the companies couldn’t do all the pre-implementation maneuvering. There’s a helpful article on the coming changes on CNN here: http://tinyurl.com/kp2m84
And now that I’ve rambled on forever, one way I’m saving is to actually collect the MyCokeRewards points that come in every package of soda. I’ve cut back on soda but I really, really like it, and just by entering those rewards codes I’ve been able to get coupons and a bunch of free magazine subscriptions.
Also related to my soda issue (yikes!), here in CA we pay the CRV, a 5 cent charge on just about every beverage container (so for a 12-pack of soda, that’s an additional 60 cents). I keep my cans (crushing them to save space), as well as glass and plastic with CRV values, and take them monthly to a recycling center for cash back.
That’s great you have a YMCA membership. I went and looked at joining there (I actually work in the building next to it, connected with a bridge) and loved that they had a month to month plan that you could cancel at any time, and I could go during lunch! However, amfam offered a better deal, and more equipment, even if I can’t cancel it anytime!
We live on very little as well. We’re 23/22 y/o’s that don’t make much money to begin with, but we made for darn sure that we can live on one income, period. And we also made sure that our one income to live off of was the lower of the two. That way no matter who loses a job, we can still cover everything! We bought our first house when we were 21/20 and he was still in college, so I was supporting the both of us. That’s what sparked the one income idea!
We too eat at home every night, and rely on netflix for movies. We don’t have cable, but a must have was HS internet so we can watch TV shows online for free. We also don’t have central a/c. Our house is 56 years old, but it’s only 864 sf, so one window unit and 2 ceiling fans cool the whole house. Our propane + electricity bill comes up to a mere $100-150/month to heat/cool the air and water, and to provide electricity. The central a/c controlled house cost across the street topped over $200/month.
I don’t feel like we miss anything at all. Eating out is fattening, and watching movies in a theatre is annoying when you have people talking on cell phones and babies crying. I can even go to the bathroom when I want! ;) We use the power of CC’s as well, and pay them in full every month to get points. Also, with our debit card, we choose “credit” at the stores to earn even more free points. Usually we cash in for Starbucks gift cards and use that as a treat at Barnes and Noble and read magazines for free. To our friends, we sound completely lame. But we’re not the ones looking for roommates to cover our bills, or having to cut down on our chosen lifestyle. Our big thing is roadtrips, so we take a ton of them. A tank of gas costs as much as one meal out, and we can make a day out of that cost, not just an hour for a meal!
I’m so sorry to hear about your paycut, but I hope things are better by now. We’re having major cuts at work as I type. It’s scary, but even more unsettling is that we get 5 minutes to vacate the building with all our belongings. My poor cube is so boring now just waiting!
Samantha, you inspire us. All of you do! Thanks so much for all the awesome ideas. Life really is sweeter when it’s simplified and pared down.
xoxo,
s (& j)
My wife got me interested in this house with the purchase of our first house. She is always looking online for ways to save and fun ideas for our “soon to be” house. To be honest, I haven’t really gotten to effected by this website until you (John) wrote about your pay cut. My wife and I have been married for just shy of a year. We have been together for over four. During this time I have worked in just about every capacity in order for us to pay for our wedding, our new home, pay off bills, etc.
As we were cuddling on the couch on night, my wife asked me “what gets you by?” “how can you work this much?”… Without thinking, I responded “moments like this”… Now I’m not trying to be chessy, just trying to point out that in this economy, when it’s hard to count on anything, it’s great to be able to count on your best friend…
Getting a pay cut is definitely not fun to deal with!! However, that’s $400 less per month that is getting taxed! So, the difference in your net monthly pay may not be quite as large as you are expecting. I like to take negative situations and bring out the positives, if you can’t tell. ;)
Either way, it seems like you have some really great ideas on cutting back.