How to make austerity your new jam

3:51 PM

It is really easy to shockingly and embarrassingly easy to spend $$. Think about how you spend your day and you will realize a lot of it revolves around spending:
  • gas to drive to work or public transit fare
  • quick coffee on the way to work + lunch while at work
  • weekend meet-up with friends for brunch
  • a very random household items on amazon (water bottle cleaning brush would be a good example)
  • mani/pedi
  • quick swing by a sale at your favorite store
  • vacations - perhaps more extravagant than you an afford
  • many more "special treats"
But, with a desire to try to simplify my life (also a semi-harsh conversation with a financial planner) I am on a mission for austerity and smart spending. Yes, I know that sounds great...sort of...but how do you do that in reality? My husband and I are still figuring some of it out, but below are some of the lessons we have learned and techniques we have used so far. 

Step 1: Creating a realistic budget based on only spending what you actually make. 
Rules for this include:
  • You cannot spend more than you made in the month. So if you overspend in one area, then you have to adjust somewhere else.
  • You can't borrow ahead. It is so easy to say "well I spent my entire entertainment budget by the 4th day of the month, I will just borrow a bit from the next month." NO, not allowed anymore. 
  • Try to find alternate solutions to solve problems instead of buying a product solution. Best example: Buying a "special" water bottle scrubber when we probably could have just used a rag and a fork to get deeper into corners. 
Step 2: Finding techniques to help stick to this budget.
  • Having someone else to hold you accountable (a friend, a partner, even a great blog like Blonde on a Budget) can keep you on track.
  • Make a list of hobbies and start to invest more time in those things. You will suddenly have a lot less time to do things that require spending. A few things I have done to replace spending: spending more time with my family, calling a friend who lives far away more frequently, biking, knitting, blogging, cooking, meal planning, an exercise video on YouTube, etc. 
  • Read a blog or sign up for an email as a nice daily reminder to keep budgeting and reducing top of mind. Some of my favorites are Learnvest, Blonde on a Budget, and Mr. Money Moustache.
  • Make a 5 or 10 year plan of what you are saving for and remind yourself frequently. If you are saving for that dream house put a picture of it in your wallet so you think about it every time you grab for the credit card. Looking every few months at progress can also help spur you to save more or "scare" you back on track with your budget. 
    • We are currently trying to pay down student loans as fast as possible so we can start saving up to move into a bigger home in 5-10 years. 
  • Setting a time limit on any category hiatus. For me the changes mean I am going on a 9 month shopping break for home decor, fashion, and any other items that are not an absolute requirement. I like knowing there is an end and it also means I know I can't step foot inside a mall or visit a shopping site for 9 months . As noted by step 1, no matter what I can't buy since we don't have budget for this.
    • Hint: set up an email filter so no shopping emails ever enter your inbox. If they are automatically archived they are still there if you really need one.
Step 3: Develop a strategy for tracking and stick to it, because when the month ends and you are on budget, it feels fantastic! There are lots of ways to track your budget.
  • Mint is my personal favorite. You can connect your credit cards and bank accounts directly. Transactions automatically are categorized by budget area or you can change how they are categorized. 
    • This is mainly what we use now and I love that I can check it from anywhere at anytime. 
  • Basic spreadsheets - hard to go wrong with the classic.
    • This was great when we didn't have combined finances and were dating/living together. We could track spending and who owed whom. 
  • I previously used the envelope method with some success. For this you remove cash and put it in envelopes. When the envelope is empty then you are literally out of money. This is harder for things you typically pay with a credit card like utilities. It works great for groceries though!
    • For me this only worked for groceries and even then it was tough because it required having the cash with you at the store (aka planning ahead) or depositing cash back into your bank account to cover the credit card charge when you forgot to get cash before going to the grocery. 
  • A combination of any of these. Find what works for you. Chat with others about what they use, you may find a budgeting buddy.
Things I try to keep in mind:
  1. Don't be THAT person at dinner. You know the one, the person who insists on "calculating" their exact spend when everyone else is tossing in a card. I think we all know that person almost always under-calculates and ends up being covered by their friends. Instead, find an alternate solution for meeting up that costs less, build that additional cost into the budget, ask for a separate check from the beginning, or just don't go if you can't be an equal dinner companion. Trying to save money doesn't mean you can be cheap or rude. You still have to adhere to politeness and etiquette. 
  2. Get out of your rut. I am a creature of habit. We always buy the same olive oil brand. In the grocery give a new brand a try based on what is on sale. It led to the discovery of my favorite olive oil. I swear all our friends have traded the same bottle of scotch back and forth at least 10 times as housewarming, birthday gifts, etc. I have started looking for alternatives. For instance, instead of always bringing that same 6 pack of beer, try bringing dessert. We recently brought cookies to a friends house instead and it was a nice surprise. 
  3. Convince friends to join you in spending freezes. For example, my sisters and I all agreed no more birthday gifts. We may go out for a family meal to celebrate, but we no longer spend on gifts. For holidays, each couple draws the name of another couple (there are 4 adult couples including our parents) and we agree to go on an experience together (price limit $100). My best friend and I exchange calls, emails, or hand written notes for big milestones, but don't send gifts. 
  4.  Use the public library. This has been my greatest find! Most public libraries have e-books so you don't even have to leave your couch. We get audiobooks for the car, magazines on my ipad, and movies that we can't get on Netflix or Hulu. 
  5. Cord cut - you will be amazed at how little you miss cable. I will confess we now have cable again so my husband can watch sports, but I could survive easily with just Netflix and Hulu. Apparently Roku has some awesome channels you can subscribe to as well.
  6. Get your friends to think outside the box on fun and creative things to do together. Some of my favorites include: going to a museum during free hours (usually at night), attend a free park concert or movie, pack a picnic, cook dinner together and rewatch a movie from your youth (Clueless anyone?). There are tons of ideas all over the web for free or minimal spend things to do. 
  7. Meal plan - see post here
  8. Before buying anything make yourself wait a month and see if you still need/want it after 30 days. Usually by the end of the  month I have either found an alternative or realize I don't really need it. Our dustpan recently broke and my immediate reaction was to go out and buy a new one. By waiting for a month I realized that either a damp rag or our vacuum accomplished the same task. I saved $ and got rid of one more thing that I didn't really need. 
What are your favorite money saving tips? Are you on an austerity plan?

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  1. Always the spreadsheet. One of the most useful inventions ever, I don't know how I survived without it. Also in regards to birthday presents, I find that picking 1 thing that the cost can be split between friends and family is great. I tend to find a £25 dress and 4 friends split the bill between them and it costs them much less than if they each get you a silly present you don't want

    1. Oh I love that suggestion about splitting something you know the person really wants. I actually keep a pinterest board called "hint hint" for gift ideas for my husband. It is great when people ask him what I might like or what they should get because it is all there including the link.

  2. This post is super helpful, because I am right now starting to pay rent, credit card bills, utilities, etc. and really need to be financially responsible. I used to avoid checking my bank account at ALL times because I was too scared to see what the number was. One tip I have is to go through an account statement and see what all "monthlies" you're subscribed to - Netflix, Spotify, Hulu Plus, Birchbox, Stitchfix, etc. etc. I know when I first sign up for these, they all seem really affordable and necessary. But they add up and are definitely non-essentials!!

  3. These are really good tips! My favorites are not to borrow from next month's budget. Never spend what you don't already have! I also like preparing home made lunchboxes for work ^^

    Love from France <3


  4. Not eating out is a big way to cut expenses. I struggle with packing lunch ahead of time so I don't have to grab something from the store for lunch when I'm at work. This is one area that I need to work on!

    1. Such a good point! I started just packing up lunch at night when I am putting away leftovers. To be fair I love leftovers and I know not everyone does. Let me know if you find any good lunch recipes!