It can happen to anyone, even those in good financial health: a crunch. Maybe your income has been cut back because of a short term layoff, a longer term job loss or a maternity leave. Or perhaps you’re just cash-strapped while you deal with paying off a recent holiday or a pricey car repair.
While these moments come and go in our lives – sometimes often – every time they show up, we panic. Will I have to do without? What if I can’t cut back my spending?
Here’s some techniques for getting things back in line… that aren’t too painful:
Turn Your Budget Into Cash
I know, budget is a rotten word, but it does work well for many people. Budgeting can look different depending on your approach. Some like to simply write down a bookkeeping-style list of how much income is coming in and how much should be going out for the basics (rent or mortgage, utilities), the needs that can cost more if you’re not careful (food and transportation) and the extras (movies, clothes, gifts).
You can keep filling out your budget sheet, day by day, to track your spending and keep yourself in line. Others find it useful to take this information and turn it into cash. Using jars or envelopes, you can set aside just how much you want to spend on each of your budget categories per month and spend the cash. When the money is gone, so is your spending. You may end up eating buttered noodles by the end of some months, but it’s a great way to keep your money well-in-hand.
Keep Monthly Costs In Mind
These days, it seems we’re being monthly charged to death. Along with household utilities, things like cable, internet, cell phone and other tech-driven services show up like clockwork every 30 days.
A great money-saving approach is to tackle these expenses and see where you can shave off dollars. Calling your cable, internet, cell phone and other providers on a regular basis to ask about deals or find out what the competitor is offering is a great idea. Be careful about hidden fees for things like installation and breaking a contract. I don’t think I’ve ever called these providers and not gotten a deal — I always wonder why I don’t call more often.
A second reason to call is to reassess your services. Ask yourself: Do you really need all those channels? Are you watching the movies you thought you would? Do you have the right service plan for all these amenities? Is your bank charging you too many fees and do you need to switch or get on a new plan? Does your credit card have a big fee while not offering you any incentives like cash back?
Meanwhile, what other regular costs do you have that could be trimmed? If you have a cleaning service every other week, maybe you could cut back to once a month.
Assess The Luxuries
This is where it hurts – no one wants to go without. And once we’ve developed a liking for the good things in life, it’s hard to let them go. But you can save significantly by reducing things like eating out, buying coffees, going to see movies, taking taxis and shopping.
Go on a savings diet: Just because you’re on a budget doesn’t mean you can’t go out and have fun sometimes – but reducing what you spend in restaurants will bring you huge savings. Cooking at home with simple ingredients and avoiding prepared foods is cheaper and much better for your health. The trick is setting aside enough time to dedicate to cooking – so pencil in that kitchen time. Purchasing a good coffee thermos and making your own java will save you quite a lot each month, as will improving your brown-bag lunch-making skills.
Stay away from the shopping centre: A way to cut back on shopping—a major spending issue for so many people—is to simply not go to the mall. This might be a challenge if you see a sale and reason that it’ll save you money. It won’t. Particularly if your financial challenge is reasonably short term, you can put off stocking up on socks and underwear for a few months, all in the name of keeping yourself out of stores where you will miraculously find things you need or want, just because you’re there. (The same goes for perusing those online deals — get rid of those emails that tell you things are 30 per cent off at your favourite retailer.)
Keep That Crunch Time Mentality
Being able to trim things back is important, whether you’re in a money pinch or not. Having control over our spending allow us the freedom to save for amazing holidays, quit a job we dislike or take time away from making money to spend with family. It’s a skill that seems like a drag, but it’s an important one.