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.
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!
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.
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.
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.
ashley morgan 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.
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.
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!!
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!
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.
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!
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
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!
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!
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.
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.
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. http://thenewlifeofkeeandkar.blogspot.com/ We are hoping to buy a house soon and I am going to include all of my before and after pictures!
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!
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!
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 $50 Amazon gift card so that’s bonus money we use to buy his video games and my cookbooks and our movies and books. Also with the hubs video game habit, he sells his used games online and gets money back for it and then applies it to video games he wants.
I feel you on the advertising dollars getting cut back. I work on the tv commercial production side and our budgets have been scaled way back which means our prep days are shortened, which means longer office hours.
But look at the good side of this recession: Americans are being forced to look at money differently and going back to that good old fashioned notion: saving!
Don’t forget to visit your public library for FREE books, movies, CDs, magazines, newspapers and sometimes even videogames!!!
I am so sorry for your paycut. Hope they will increase it again soon. I was reading your plans and if I can suggest one thing. If you do not have to have a luxury all the time a good way of traveling is a car camping or camping at all. Me and my hubby recently been going to many places and instead of staying in the hotel we would stay in a car camping place. Even though our 2 people “dome” is not the best if it goes to comfort but it definitely saves a LOT of money (20$ 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. :)
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.
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.
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 :)
thank you for posting. I love my music and wanted to let you in on one of my favorite sites…. http://www.slacker.com – it’s a great radio station with tons of stations and you hear new music all the time- FREE!!! Hope you enjoy it!
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!
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).
-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!
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.
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). =)
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.
Totally feeling the pinch with you. My husband’s company relocated him to the other side of the country, and so I had to quit my job. Now is not exactly the best time to be job hunting, so we’ve had to tighten our belts until something comes my way.
Wow. You guys are bowling us over with your sweet support and fantastic penny pinching ideas! We’re definitely going to check out a bunch of the suggestions above and we already feel a lot better. Just knowing that other people are feeling the pinch and making it work really inspires us! Thanks so much for the encouragement and the fabulous ideas!
Sherry (& John)
Have you checked out grooveshark yet? It is the best way to listen to music online for free. You can listen to exactly the song you want(if they have it that is). Anyways, not to sound like an ad but it’s my favorite for that sort of thing. Good luck pinching pennies!
I hear that the new theater on Boulevard has a Tuesday $6 movie night with cheap popcorn too!
Love some of the ideas mentioned here – especially the library, I save $$$ by not buying books, which was my big splurge. Because I took a huge pay cut too, I got booted!
Two words: Dave Ramsey.
Mrs J says
Hi, we’re also a 1 car family and seldom eat out too plus I cut my huby’s hair! I’m glad we’re not the only ones doing these kinds of things! I now feel normal lol! I absolutely understand the effect of your paycut. Try Redbox for renting dvds for free instead of going to theatres. They have free redbox codes every monday (just google redbox codes on the net) and you can watch dvds for free! Use different cards so you can rent different dvds and just return the dvd the next day before 9pm and you won’t be charged! We have been doing this for a while now and haven’t been to the theatres for a long time! On the bright side, you still have your job. You are still blessed.
I work at one of the big three in Michigan. I had to take a pay cut at Christmas last year (I was getting married on December 19th – talk about stress) and they took one holiday away from us, but I still have to take the day off, unpaid. So I know all about this stuff and more.
But you know what, I had to stop worrying. There have been nights where I couldn’t sleep, eat, and worried if I would have a job when I woke up. I was making myself sick. One day I just woke up.
I made a list of things I have to remember each day:
1. I have my health
2. I have a great family, husband, and friends
3. I still have a job
4. My husband has a job
5. Money does not create happiness
So we have been cutting back for awhile now by using coupons, brown bagging lunch, renting or borrowing movies, and having house parties with our friends, instead of going to bars. Christmas was the hardest. We only gave gifts to the kids and made cookies for our families.
It works for us, and sometimes the unexpected comes up, but everyone has to keep telling themselves to be strong. We are all going through it together. So hang in there John and Sherry!
WOW– you guys have the right attitude. SO many people in similar circumstances adopt a “oh woes me, why me” defeatist stance. I know you will be ok, because you already had great strategies in place for a “better” economy. Take care!!
I love hearing about the many yet so simple ways you can save money. I wanted to recommend for movie watching Redbox, it’s the automated movie machine at most grocery stores where new releases (and now older films from the 80’s, 90’s, etc) are only a $1 for 24 hours. My dad introduced this to me when they first came about some three or so years ago and I told him nothing would turn me away from my love for blockbusters- well now I’m a true promoter for redbox, it’s a great deal! Thank you for all of your other advice though, keep it coming!
Sorry to hear about your recent reduction in income. I am a single,new homeowner(2yrs),under 20,000/yr income, college graduate (2005),young woman. With home/car emergencies, trying to save for retirement and for on hands cash fund, while also eliminating credit card debt…I feel ya.
Here are some things I do:
1) I don’t turn my air conditioner on until it is as hot at night as it is in the daytime. I live in 1970’s era brick condo that pretty much is designed to stay cool. I run a fan upstairs if I must, but since I work and play away from home, I’m only there to shower and sleep 5 days a week. I can escape to my first floor if I need to, but I’m cold natured, so that’s rare.
2) I wash my clothes early in the morning and hang them outside on my patio or inside if it’s rainy. I have enough clothes that I don’t mind waiting for some to dry.I need an item fast I toss it in the dryer…again rarely happens.
3) I eat what’s in season. I try to stick to fresh veggies and stay way from processed foods. I got off track with it, but noticed how much I save buying vegetables and fish versus all the other crap I was purchasing. Now it’s on again. Oh and coupons, coupons, coupons and buy in bulk.
4) I drive in circles. I don’t go home after work if my next thing is within an 1.5hr after work. Most days it’s work,library, church, home, repeat tomorrow
5) Be your own personal trainer. A group of women at my church walk on Saturdays. I ended my $49/month gym membership last year($ for my credit card). I bought a yoga tape for $10 and really now I just have stay on top of motivating myself.
I’ve noticed I’ve saved myself $200-300 dollars. All towards my credit card of course. Then when that’s done this year, I hope to be like you, pre-paying my mortgage. Ahhh…ain’t it grand…being an adult.
Ooo… YES! I hear you on the freaky universe! I definitely think someone (some thing?) is looking out for us.
My husband and I got married in 2004. We said I do, partied with our family, honeymooned in St. Thomas – and then came home to one of the worst hurricane seasons in Florida! FOUR hurricanes hit Jacksonville in a row – which is rare, considering we’re so far north. Needless to say our roof basically caved in and started leaking all over. We counted up all the wedding checks we’d gotten and it was the exact amount of a new roof. No joke. So we never got to buy new furniture or anything fun, but our familys literally put a roof over our heads.
I’m tellin ya – the universe definitely keeps you in check!
Wow, you guys, I’m really sorry to hear about the pay cut. My company cut everyone back and which has taken $500 out of my pocket each month. My boyfriend got laid off shortly after and even with unemployment, our combined income has plummeted. We also started growing our own veggies and cut out a lot of discretionary spending, but the #1 cost saver for us has been COUPONS!
We often buy multiple newspapers and combine coupons with the weekly sales. Our favorite local grocery store (Harris Teeter) always has double coupons and sometimes will run a week of triples, so that allows us to actually score so much stuff for free. I’d say that has easily reduced our grocery bill by 60%. You’d be surprised how many young people these days are using coupons because it just makes so much sense!
And I definitely recommend Pandora as well as couch surfing!
Sorry to hear about your pay cut, but you guys are crafty and smart so you guys will be just fine.
As another poster said, the Redbox Monday free codes are great to get movies. However, I’ve heard after the summer, they’re going to stop that promotion, so cash in when you can.
However, sometimes we just like going to the movies for the experience. I don’t know if they offer it in your area, but we have free movie screenings in our city. It’s great, it takes a little bit more time, but we get to see all the movies a few days before opening night. I think last summer we ended up seeing 10 free movies!
Oh, I can SO understand the paycut. My office just cut our hours back from 40 to 32, although they’re paying us for 36. I suppose it could be worse. I do have to admit though, I’m sure looking forward to 3 day weekends!
Hey John–You should try Pandora for music. I love it! Have you thought about biking to work? Not only do you save on gas and car maintenance, but you get your exercise in too.
Another idea–we cut our cable to the basic package and it really hasn’t been as bad as I thought! We keep up with our favorites on Hulu. We also bought a cord for $20 that attaches my MacBook to the TV, so we use the Netflix instant option a lot more.
It stinks to have to cut back when you are already frugal! Don’t forget to have a small indulgence every now and then so you don’t feel deprived and go overboard!
So glad your company acted reasonably by retaining its employees. That’s saying something, even though a pay cut is indeed harsh.
My job offers little to no leave for when I will deliver our baby in August. I want so badly to take my full 12 weeks of FMLA time off, but the majority of that won’t be paid. I too am starting to freak out a little about how that will impact us, and am making plans, but it sure is scary. I want to thank you and your commenters, because any and all cost-saving tips and advice are much appreciated, probably by all of us, no matter our financial situations. Thank you!
Check out restaurant.com if you still feel like “splurging” and going out to dinner. For $10, you can get restaurant gift certificates worth $25. And if you sign up for emails, they’ll send discount codes of up to 80 or 90% off (meaning you can get a $25 gift certificate for $2)! The only catch is that there may be certain exclusions (only good on weekdays, minimum purchase required). So be sure to check out the fine print before cashing in.
I don’t know how close you guys are to your local grocery store, but I typically walk when I go buy food. The closest Kroger is just under a mile away from me, so I get some good exercise and save money on gas! It’s not like it’s a LOT of money I’m saving on gas, but it helps!
Sorry to hear about that, but you guys seem to have come up with some workable ideas to help out. You might consider Napster for your music. It’s $13 a month and you can listen to almost anything your heart desires. It’s great for Friday night happy hour at home.
As for the music habit, check out the Pandora Project online. It’s an excellent radio station. You plug in a song you love and they match it with other music that you might like. I work at a school where we are totally obsessed with it.
Best of Luck!
Great post! My husband and I just bought our first house and are trying to be concious with our spending at the same time which is why I have found your blog so useful.
Anyway, here is my new money saving tip – public transportation – I figured out that I can save almost $9 a day on my commute from a suburb of Columbus OH to downtown by taking the bus. I pay $83/mo for a parking space and $4-5 on gas everyday but a monthly bus pass is only $62 and my employer pays 80% which leaves me with having to only pay $12.50 per month and minimal in gas to drive to the bus stop. It doesn’t work in every city or job situation but it’s worth checking out. Also, I we try to eat at home and pack lunches as much as possible and use the redbox all the time!
Sherry, how about a “how-to” post on cutting your husband’s hair?!