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.


  1. says

    I def. feel your pain. I was laid of in February from Caterpillar and had to completely uproot and move back to my hometown. I was lucky enough to find another job quickly and my fiance and I found a house to rent for cheap! I was obsessed with clothes so I had to really cut my clothing allowance (sad day). We started a netflix account as well and never go to the movie theater anymore.

    I just started reading your blog and I LOVE it! So many great ideas, I always look forward to what you will come up with next! You inspired me to start my own blog about my fiance and I. We are hoping to buy a house soon and I am going to include all of my before and after pictures!

  2. says

    I work as a freelance translator, and I’ve specialized in TV programs. When the economy started slowing down, so did the number of new programs being dubbed into Spanish. So, less work for me. Actually, it’s been a month since I last worked (and that was a 200€ job). I pay 250€/month in taxes as a freelancer, 458€/month rent and Eric makes 1,000€/month (I know it sounds ridiculous in US terms, but 1,000€ is a standard just-out-of-college salary here in Spain). So yeah, we are struggling. A lot. But hey, still debt-free, and without a single credit card in our wallet, so I guess we’re mastering the frugal lifestyle. AND with a smile!

  3. says

    I’m so sorry to hear about the paycut. It looks like you guys have a great plan to tackle it though! Things are tough out there, wishing you both the best!

  4. EvY says

    The hubs and I do the same with our credit card & also pay it off at the end of the month, only our Capital One card earns three points on the dollar and every 5000 points, we redeem it for a $50 Amazon gift card so that’s bonus money we use to buy his video games and my cookbooks and our movies and books. Also with the hubs video game habit, he sells his used games online and gets money back for it and then applies it to video games he wants.

    I feel you on the advertising dollars getting cut back. I work on the tv commercial production side and our budgets have been scaled way back which means our prep days are shortened, which means longer office hours.

    But look at the good side of this recession: Americans are being forced to look at money differently and going back to that good old fashioned notion: saving!

  5. Elizabeth says

    Don’t forget to visit your public library for FREE books, movies, CDs, magazines, newspapers and sometimes even videogames!!!

  6. marta says

    I am so sorry for your paycut. Hope they will increase it again soon. I was reading your plans and if I can suggest one thing. If you do not have to have a luxury all the time a good way of traveling is a car camping or camping at all. Me and my hubby recently been going to many places and instead of staying in the hotel we would stay in a car camping place. Even though our 2 people “dome” is not the best if it goes to comfort but it definitely saves a LOT of money (20$ per night is not bad at all) it allowed as to travel much more:D Although its not the best way in the winter a holiday will do great for much cheaper. :)

  7. staceys says

    same thing happened to me too. first we were cut 10% and then another 10%. eeek! And while I’m super nervous with stretching my budget, i have found i can do it! This has kind of pushed into the “Modest Movement” and realigned what I really want for me and my husband’s future. And its for the better.

  8. says

    Great post! Times are hard right now. We are certainly trying to live on less – it isn’t easy. If you watch a lot of movies, Netflix is really a good deal.

  9. Meredith says

    Sorry to hear about the salary cut, that is no fun :(

    Don’t know where you all do your grocery shopping. I suspect you are really frugal already in that area, but it is crazy how much money I have spent by periodically going to Aldi’s instead of the regular (high priced, high end) grocery, especially for the basics. Aldi also has a lot of stuff that is beyond basic (hummus, fresh salsa, etc). I have always been pleased with the quality of the stuff I’ve bought there. Honestly, the prices are so good you will find yourself sharing your receipts with your friends in an effort to get them to shop there.

    Enough of my mini commercial. I honestly don’t work for this company, but a budget minded friend turned me onto them a few years ago. You need a quarter for the grocery cart (you’ll get it back) and bring your own bags. I think you are going to want to write a whole post on the place. I certainly could :)

    Good luck!

  10. eli says

    thank you for posting. I love my music and wanted to let you in on one of my favorite sites…. – it’s a great radio station with tons of stations and you hear new music all the time- FREE!!! Hope you enjoy it!

  11. Val says

    Have you heard of Pandora Radio? It’s customizable to your personal music tastes, you can rate each song, and it always introduces new bands/music that fits in with your tastes, based on your ratings. It’s online, so it works well if you have the web on your phone. You can plug in your headphones, drop the phone in your pocket and go for a run. Or you can queue it up on a laptop and move it around the house as you do chores. Oh, and the best part….it’s free!

  12. rebecca says

    We haven’t suffered a paycut, but my fiance and I are living off of my teacher salary and trying not to rack up too much more student loan debt (he’s in medical school).

    Other tips:
    -We found a $5 wine tasting at a grocery store that can be a nice night out (albeit, in the produce section) but it feels like we are being social without spending a lot of money.

    -Pandora is a great internet radio site that we always put on for our background music at home–it’s free!

    -We host dinner parties as often as we can (with creative themes like a wine tasting, a potluck) to keep our dining out costs down but still have fun with friends!

    -I renamed by bank accounts as “Spending” and “Honeymoon/House” so it reminds me to keep shoveling in as much as I can for our future big ticket items!

  13. says

    John, maybe you could set up some sort of music swap with your friends? From one music lover (fanatic) to another, I know how hard it is to not be able to get your hands on good stuff for financial reasons.

  14. priscilla says

    its hard not to notice the fabulous fashion trends this season, but shopping has not been an option since the husband lost his job. so in order to gain a new wardrobe on a zero dollar budget, i hosted a SWAP party for the friends and i this past march. we basically cleaned out our closets of slightly used items (clothes, shoes, accessories) and brought them to the party to swap with other friends. all items not swapped were donated to goodwill. so not only did we gain a few new items to add to our wardrobe, we also got some spring cleaning accomplished!

    if wearing your friend’s slightly used clothes isn’t your thing, you can also swap other items like home decor. the possibilities are endless (and free). =)

  15. says

    Wow, guys. Sorry to hear about this…I feel like everytime I turn around, I hear of someone else being affected. :(

    But good for you for taking the bull by the horns and figuring out some ways to cut back even more.

    And as far as new tunes…do you ever check out Pandora? Great site.

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