So, my hub and I are on an austerity program. Yup, we’re on a budget. Back in the summer we decided to track everything we spend, itemizing where it is going, and tracking it back against the budget we set annually for that particular category. Very enlightening experience to say the least.
Have you ever analyzed every penny you spend? And I mean every penny? It sounds dreadful, but it is actually kind of fun, if you take it on like a project. Yes, I know, I tend to project management everything, but it turns dreadful type activities into fun and positive activities. Never mind, it also creates internal AND external order. Ohhh, and how I love external and internal order.
Here are some basics from a blog I follow: The Simple Dollar
SPEND LESS THAN YOU EARN (sounds basic doesn’t it?)
Here are some of his suggested ways:
First, go through every monthly required bill. Ask yourself if you really need that service at all. Do you really use Netflix enough, or could you just rent a movie once in a while from Redbox? Do you really use your cell phone much at all, or could you just replace it with a pay-as-you-go phone? Then, go through each bill and see if there are any optional services you can eliminate. Do you really need premium cable? Do you really need unlimited text messages?
Second, keep diligent track of your spending. (we definitely have this one down pat – phew!) Keep a notebook in your pocket and write down every expense you have. The simple process of doing this will make you think twice about unnecessary expenses. When you do have a month’s worth of expenses written down, take a careful look at them. Ask yourself whether or not each of these expenses actually contributed to the value and joy of your life. That process will offer a lot of insight for you as to where your spending is going to waste.
Third, look carefully at your routines. Watch what you do every day (or most days). Are there things you do each day that cost money? Those things are the most powerful ones to adjust, as trimming just $1 from your daily spending saves you $365 a year. Do you stop at a coffee shop each day? Why not cut down your daily order a bit, or switch to a different shop, or start making your coffee at home? Do you eat out every day? Perhaps you can start brown bagging it a few days a week. Look at every regular expense you have.
Fourth, get a better bank. The vast majority of Americans are with banks that don’t treat them very well. No interest at all on their checking accounts. Tons of fees for ATM use. Draconian overdraft policies. A tiny interest rate on savings accounts. Monthly usage fees of all kinds. All of these things are a waste of money. Switch your accounts to a bank that respects you. From my own personal experience, I use ING Direct for both savings and checking. I get great customer service, interest on my checking account, a solid interest rate on my savings account, and I’ve never had a fee of any sort.
Finally, do some one-time energy improvements around your home. Replace some of your light bulbs with CFLs and LEDs. Install a programmable thermostat. Air seal your home. Blanket your water heater. Install some SmartStrips to cut down on electricity use. These tactics will cut down your energy bill significantly, directly reducing your bills.
Check out The Simple Dollar for other great tips. There is tons of valuable info there on his blog.
In the meantime, have I mentioned how I happy I am with my Hunter rainboots? (we got something like 30 ml of rain in the last 24 hours in Ottawa, and broke the record for December 1st). Oh, if only it could have been snow!!
So, what budgeting tips can you recommend? Does anyone else track their pennies?