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Monday, January 22, 2018

Ten MORE Ways to Slash Your Budget


"People who live Under the Median with deliberation and an iron will aren't even looking at Starbucks, except to slow down to smell the aroma on our way home to brew our own hot beverage for pennies instead of dollars." - Under the Median


I just did a post on Four Ways to Slash Your Budget.  We looked at "big picture" items - ones which can result in significant savings every month.  But, when you are striving to achieve great big goals, you need to carefully comb through your budget to harvest even the areas which result in saving just a little money.

This post, filled with 10 more tips, contains some "black belt tips". If are ready to do whatever you need to do in order to meet your goals, this is your post! You have fire in your eyes and you're hanging on to those dreams like a dog with a bone!

When I read finance websites touting the advantages of simply giving up your daily latte if you want to save money and balance your budget, I either chortle with inner amusement or screw my face up into a silent message which clearly implies my disdain of their simplistic answer.

People who live Under the Median with deliberation and an iron will aren't even looking at Starbucks, except to slow down to smell the aroma on our way home to brew our own hot beverage for pennies instead of dollars.  We like to whittle our budget down to a fine-tuned machine of thrift-minded perfection!

MY STORY

If you know my story at all, you understand that I have developed the habit of examining each nickel and dime before it leaves my wallet.  This all began when my husband and I decided to live debt-free on an income which averaged about 30% under the National Median Income.  In a technical sense, we lived above the definition of poverty.  But, raising a family on this amount of money was a monthly balancing act in both thrift and black belt economics.

So, let's talk about what to do if you have cut all the easy stuff out of your budget and still need to save more coin each month to make headway on your goals.  I've employed all of these methods in my personal life.  Some of these ideas will net you just a couple of hundred dollars per year.  However, as I proposed each idea to my husband, he wrote down the expected savings, added it all up, and then showed me the total.  We looked at each other, smiled, nodded, and said, "Now, we're talking some real money!" 

In order to give you accurate numbers, I looked at our yearly budgets and budget totals for 2009 and 2010, the years in which we cut the budget to the bone to save 40% of our $40,000 yearly income in order to pay cash for our new home.   Yep!  I still have them all in a file.  I'm a budget junkie!  😄


TIP #1: BUY  REAL FOOD

It is a misnomer that industrialized, boxed, processed, preservative-laden, snack food is less expensive than whole food.  Not only is it devoid of most nutritional value, fattening, and full of salt, sugar, and oil, it is not even really cheaper.  

Take potatoes for an example.  My family can eat an entire bag of chips in about five minutes flat.  Each bag will cost you between $1.50 and $4.50.  Contrast this with a ten pound bag of potatoes, which can be had for less than $4.00!  A bag this size will last you for several meals.  Potatoes lead the pack in potassium, vitamin C, and fiber.  They fill you up, but don't weigh you down.  I guarantee your children will be hungry two hours after eating that bag of chips, but full for the rest of the evening with a hot, stuffed baked potato.


My experience: Let's see our example works in real life. In 2009, when my husband and I were saving to pay cash for our house, we employed this budget-slashing method and successfully reduced our food bills to $325 a month for our family of six. We bulk cooked once a week, ate seasonally, baked bread from scratch, and had a small square foot garden.  Nearly every single bite of food that hit my children's mouths was made by me, with real ingredients. 

TIP #2: HANG IT ALL! 




When I say hang it all, I mean laundry.  Years ago I read that it cost an average of $.50 to dry each load of laundry in a dryer.  So, I began hanging ten loads of laundry on an outside line every single week.  I kept the ritual until it was so cold that all of the items came off the line dried into stiff cardboard like shapes and my fingers needed resuscitation after coming in from the cold.  If you hate the sort of scratchy feeling of line-dried towels, throw them in the dryer for about 10 minutes after you take them off the line.  They will emerge with more of the soft feel to which you are accustomed.  Using the $.50 per load formula we estimated we saved $20 a month or about $160 a year by doing it March through November.

TIP #3: ADD OR SUBTRACT A DEGREE


The degrees I am talking about are on your thermostat.  For years we had an "80 degree rule", the A/C didn't come on until the thermometer consistently read 80 degrees or above.  Instead, we had two whole house fans and we used them!  As long as the humidity stayed down, we were able to cool the house off quite nicely to sleep comfortably, even with fairly hot daytime temperatures.  When we finally turned on the A/C, we raised the thermostat 1 degree every day until we really felt uncomfortable.  Then, we backed it off 1 degree and left it set there.

In winter, we did the process backwards - subtracting a degree every day until we were cold, even after adding warm socks and a sweater to our ensemble.  We used space heaters and kerosene heaters to warm up the room in which we were sitting, rather than raise the thermostat.  For every 3 degree variance, you will save between $10 and $20 off of each monthly bill.   By installing and using a progammable thermostat can also shave $300-$400 a year off of your utility bills.

Check with your energy provider to see if they offer free home assessments or energy-saving devices to customers.  Here is a link to one such program offered by ComEd.   

My Experience: We currently use PowerSmart Pricing through our power company, Ameron. Power Smart Pricing is an hourly electricity pricing program for residential customers. The price you pay per kilowatt hour varies throughout the day. The rates are posted 24 hours in advance. In this way, I can plan cooking and laundry at times when I pay the least per kilowatt hour. The program also makes perfect sense for us since we own an all electric car. We charge our trusty steed from 1am-4am when the prices hit rock bottom. Last year we saved 5% on our electric bill by using Power Smart Pricing. That may not seem like much, but, remember we transitioned to this program simultaneous to purchasing an electric car. So, if we were not charging an electric vehicle every night, I suspect that our savings would be higher by another 10%. 


TIP #4: GET CREATIVE IN GIFT-GIVING



While saving for a new home, our Christmas and gift-giving budgets became nearly non-existent.  We made gifts from scratch, bought from garage sales and second-hand stores, and scoured clearance racks for unbelievable bargains. Additionally, we agreed to go to only four  garage sales that summer! These were major neighborhood garage sales.  

What?! Why in the world would we deliberately cut off our garage sale circuit - the source of a thrifty supply of clothing and household items? For one specific reason: I know, I said that we looked at garage sales for gifts - and we did.  Garage sales had become our way to blow time together every weekend.  But, the more we went, the most things we found that we didn't need, but couldn't pass up.  So, we made the decision:  if we don't go, we can't be tempted to spend money on unnecessary items.  Instead, we went to carefully selected sales and were still were able to find every item we needed, and few that we didn't. 

My experience: In this post I gave a list of ideas for doing Christmas while living Under the Median.  You can also read here and here for a large list of gift ideas for $3.00 or less! The ideas in these posts can be applied to holidays, anniversaries, weddings, and birthdays.  By using a combination of all of the tips and ideas that I gave you above, we cut both our Christmas and gift budgets by 25% each.

TIP #5: Oh, Baby! 



We had a new baby at the time we began saving for our home.  We cut our "baby needs" category in the budget from $40 to a very minimal $10 a month. This was baby #4 and he needed very little that we did not already own. The $10 covered the cost of occasional use of disposable diapers (which I generally got on sale and with coupons) and other miscellaneous items.  I breastfed until the age of two, made my own wipes, used cloth diapers, made my own baby food after the age of six months, and bought used clothes.  We also had really great friends who gave us hand-me-downs.  New clothing, in general, has been very rare in the lives of any of my sons.   


Miscellaneous Ideas

Here are some other miscellaneous areas which we were able to "right size" by asking ourselves if we  really needed it:

  • TIP #7: We cancelled our newspaper subscription.
  • TIP #8:  We cancelled our internet. We accessed it at the library once or twice a week.

  • TIP #9: All magazine subscriptions bit the dust and were cancelled. 
  • TIP #10: We went out to eat 3 times each year (using coupons and gift certificates).  Instead, we had Friday night picnics.  Here's a post on that tradition 

  • TIP #10: Every extra penny that came into the house went straight into the bank. 


Our Family Mantra Became:
"If we can't eat it or wear it, we don't need it."

Do you have specific goals for 2019? When establishing your family budget for this year, consider each nickel and dime. Trust me. They DO add up to dollars. 

 Do you have tips on saving money or questions on how to save on expenses?  I'd love to hear them.  Comment below.   

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