In the current worldwide economic crisis, many people are forced to tighten their budgets. Those with jobs feel a need for less debt and more savings. Those without are adjusting down to unemployment benefits or trying to stretch what resources they have as far as they'll go. Even those in good shape economically can benefit from tightening their budgets. So here are ten tips in no particular order that may help you shorten your monthly expenses and have more for savings or luxuries that you want.
1. Only spend money you actually have. Don't use credit cards unless they are completely empty and you can pay the purchase in full within 30 days. Interest on credit cards is so ruinous that if you keep going on minimum payments you can wind up paying for everything you bought four or five times over before going bankrupt. The debt is real but the terms are so ludicrous that if all you do is avoid and eliminate credit card debt, that is the single biggest money saver you can do.
You'll be surprised at the difference it makes actually living within your means -- they are probably more generous than they seem if you're used to living on credit. One less bill a month at a time and then retire the cards in favor of a debit card. Or keep one and treat it AS a debit card. That is dangerous because you could wind up going into debt with an emergency, but if you don't use it as credit even in emergencies you can still collect the perks and inducements credit card companies use to hook people in.
Don't try using it as debit unless you really can stick to it. Do NOT think of your credit line as money you have available. Most of the people I know including me, who have made this work, went cold turkey and cut up all the cards before paying off the balance or going bankrupt. If you do this before going bankrupt you can do a lot more with what you have than you thought you could.
2. Cut back or cut out on eating at restaurants unless it's a business meal that may get you important commissions or a date that may get you a good mate. If you're already in a relationship, prepare a romantic meal yourself at home with candlelight and flowers, it's cheaper and more personal. A good restaurant meal can cost as much as a week or even a whole month's food budget and when it's over, you have nothing to show for it but the memory of the experience.
Likewise, cut out or cut down drinking in bars. If you enjoy alcohol socially, most bars don't have much social interaction. They're just places people sit and drink or cruise for dates. You can have a much better social experience if you purchase a bottle of liquor for the price of one drink and invite friends over for a party.
Sure, it means cleaning up your home before and after, but it's also a reason to clean up where you live and make it more livable. Also you have more control over who's there and what's going on at a party you host. If you like a weekly drink at the end of the workweek, turning that into a gathering of friends as a regular event can be just as familiar and pleasant as stopping at a bar -- and you can rotate who's buying or hosting.
3. Find hobbies that pay for themselves or make your main hobbies pay for themselves. Any hobby that you're good at has some potential for income -- projects you make can be sold on eBay, Etsy and other online markets, skills you have can be shared by writing online for websites that pay for articles.
Even if your passion isn't something obviously easy to monetize, you can go to http://www.sitesell.com and invest in an SBI website. The business plan and Site Build It software will turn any passionate interest into an ad-supported topical interest website that usually at least pays for itself and most often winds up making a real profit on the time you'd spend hanging out online writing about your favorite topic.
Other venues for topical nonfiction don't take the $299 investment of SBI! so you can start in a no-capital way with http://www.ehow.com, http://www.helium.com and other pay for posts sites.
4. Purchase games that you own instead of getting into pay-for-play online gaming. The quality of home games makes them a good bargain for amount of entertainment time you get, but pay-for-play games add another bill to your budget.
5. Bank at a credit union. You will get better service because your "share" account is exactly that -- you're a shareholder in that financial institution and they will cater to you as shareholder as well as customer. Credit unions often offer better terms and are not going to run the ripoffs that a bank whose main interest is stockholder dividends will pull. You get a better deal and better service with less sales pressure to participate in high risk or high interest financial activities.
6. Take up a real sport or outdoor activity instead of joining a gym for your health. Unless you are so passionate about gym stuff itself, such as bodybuilding as a hobby, it will become both a time and money sink. You can get better health if you take up something like plein air painting, marathon walking, softball or some physical activity that gives great enjoyment but can be organized just by meeting others who are interested in sharing it. Most times the fees for sports clubs and so on are a lot cheaper than gym memberships. If there isn't a club for what you want to do, put up flyers and online notices in your area's local website to start one and give your contact information.
7. Cut back or cut out convenience foods in favor of raw ingredients. Baking your own bread is healthier with whole wheat flour. Oatmeal, the normal kind, cooks as fast as instant and costs pennies on the dollar versus instant packets, even if you put in the raisins, brown sugar, apple bits and so on.
Breakfast cereal is a huge offender for not being cost effective, it's expensive and vanishes fast but hasn't got nearly the nutrition that hot cereals made at home do. Turkey is a good bargain for cost of meat and quantity of good meat, either ground turkey or just roasting a whole one with all the trimmings and eating on it for a week. By eliminating overpriced processed convenience foods, you can afford to buy at organic food stores and improve quality.
If you don't have a lot of time for cooking, plan for crock pot meals, big batches of food like the roast turkey and choose a weekend day to cook several big dishes at the same time. Save individual servings in Tupperware in the fridge and eat all week without stopping to cook. A benefit is being able to customize that to exactly your own tastes. Even a person living alone can save money cooking in bulk rather than spending hours on just one meal (except special occasions).
8. Shop online. The overhead for almost anything you can buy online is a lot lower than businesses supporting more employees, rent in a good location and utilities for a shop. Retail prices are based on costs of running "brick and mortar" shops -- so online businesses routinely sell way below retail. For the patience of waiting a few days for the item to arrive, you may get it at half price or less. I've applied this to art supplies and my studio setup is worth about three times as much as I've invested in it over the years. I get the best of everything by watching for Clearance sales and email coupons from my favorite suppliers. Windowshopping at physical stores and then buying online can be a way to have fun.
9. Shop at thrift and secondhand shops. If you enjoy the process of shoppng as many people do, it's as much fun going to a thrift shop with a set cash budget in pocket as it would be to cruise through a mall with a credit card. Fou are still getting personal, respectful attention from salespeople and getting to make choices on the spot. That is the real pleasure of in person shopping.
So take it to a flea market and spend only cash that you really have and already budgeted. You'll start getting into bargain hunting and improve everything from your wardrobe and furnishings to books, hobbies and tools at a fracton of the cost.
10. Get a good refurbished computer about six months out of date when you need a new computer. Refurbished laptops and desktops have lasted longer with less trouble than the three new computers I've owned. I suspect that the refurbishing process is one more level of shakedown and inspection as opposed to factory processes that rush new tech to market. Same for most electronics. Cost is much lower, quality much higher for the cost and in a subtle way it's far better quality because the refurbishers are very careful about their work and eliminate flaws. You got the survivors of that batch when they get refurbished.
11. Buy a good used car instead of a new car. I know, that won't actually stimulate the economy, but it'll cost a lot less and it has the same refurbish benefits as the refurb computers. You may even manage to get a good running one without making car payments and that could eliminate an entire bill from your budget.
12. For vacations, check out church retreats and club events where the members or congregation have done everything to cut costs and it's not for profit. A weekend camping with comfortable cabins and meals might only cost $30 or $40 a person versus the usual costs of weekend vecations. Even longer vacations can be organized by a group you belong to with a theme or activity that you genuinely enjoy, among people you know. They are much more likely to be cheaper because the group gets group rates and can cut expenses while getting a good time.
If you want to organize something like that, plan a year in advance. Get plenty of people signing up for it -- it could be anything from a family gathering to a topical hobby week at a hotel. When hotels sell a certain number of hotel rooms in a package the rates drop real low, plus they throw in perks like free conference rooms and party rooms. The process of planning and organizing the event can be a good way to bond with your friends and have a good time working up to it.
13. Be patient. Instant gratification usually costs a bundle. When you plan a luxury event or purchase and take your time windowshopping, weigh your priorities and choices and change them constantly, that is a pleasurable kind of planning. It's not as painful as cutting back when it's focused on "get the most for my money" and I spend lots of time hunting for bargains on -- luxuries. Extras that I could live without but enjoy very much. It's important to have at least some discretionary budget, not just for finding sudden clearance bargains but to keep out of a bitter hopeless sense of frustration. It doesn't have to be much to be a lot of fun, but every financial counselor or money expert I've ever known has pointed out that entertainment budget is necessary for anyone to save money over the long haul.
So when you save money on any of these tips, you make that entertainment budget a little larger. Make sure to reward yourself for all this thrift. For everything that you like and put off till later, think of something cool that you want and will get later on -- don't break promises to self on this sort of thing or it's too easy to go off the budget and crash.
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