With recently loosing my job we are now living week to week on one wage therefore we are learning to budget like we have never done before. It has been stressful having to count every last dollar and plan every purchase but we are surviving week to week and we are coming out with a little bit of savings after each pay. When I first lost my job I was messaging a lot of one income earning families asking for advice on how to live off one income and the response I received from almost everyone was “budget”. They all said to survive off one income you literally have to budget your every dollar and also sacrifice luxury items. I didn’t quiet understand how we would do this and what I was going to have to sacrifice (I refer to myself as I indulge in a few too many luxury items) but after a few weeks we are finding a good balance between budgeting necessities and luxury.
Here are some tips I have for budgeting:
Each week I write out all of the bills that need to be paid as priority and ensure they are paid a day or 2 before the due date. Don’t always rush to pay a bill as soon as you get it, if you wait til the due date then you have more time to budget for that bill and it wont take such a big chunk out of your savings if you have a few weeks to save for that bill. However always pay on time, a lot of companies offer pay on time discounts which can reduce the amount of the bill. Some companies hit you with a late fee if you pay the bill late.
Pay the minimum repayment. Yes this sounds wild however I always used to pay as much money as I could on my debts even if that meant going without any savings for months on end. I used to pay massive amounts of money on our credit card in the hopes to pay it off quicker, however by doing so I would leave us with no money for smaller items that pop up like fuel, phone bills, internet etc. So when those bills popped up I had no way to pay them as we had no money in the bank so of course I would use the credit card to pay for these items and before I knew it I was just going around in circles and not paying the credit card off as quick as I hopped for.
Look for interest free payment plans, if you need a big purchase item, say for example your fridge has blown and you need a new one or you go to the dentist for a check up and turns out you need a root canal always search and ask for interest free payment plans. Payment plans are offered by so many retailers and providers as it will help elevate the stress of having to front up thousands then and there. So many options are now available in regards to interest free payment plans such as After pay, Certegy, Zip Pay etc. And a lot of them don’t need to do credit checks and you don’t need to provide any documentation or ID.
If you have a big credit card debt and your repayments each month are starting to sink you, take a few moments to google interest free periods on balance transfer credit cards. Think about it, if you can stretch the amount of time before you need to pay off a debt then you can reduce your monthly payments on your credit card. As bad as debt can be you don’t want it to consume you and sink you therefore buying yourself some more time to pay it off is always a smart idea. Almost all banks offer balance free transfers on a range of credit cards and there are some really good time frames offered from 12-24 months to have the credit card paid off.
Consolidate your debts. By consolidating all of your debts into one and extending the period to pay off your debt the lower the repayments will be. At one stage we were paying $1200 a fortnight in repayments to 6 different debts so we approached our bank and gave them all of the details of the individual debts and reconsolidated them all into one loan over the next 4 years. Our repayments went down to $400 a fortnight which saved us $800 each fortnight allowing us to build up our savings again.
Set a weekly budget for your food expenses. Our budget is $200 for our food intake for the week. This amount has to cover all food expenses for the week so that means our groceries from the supermarket, takeaway and coffee. We try our very hardest to stay within the $200 limit sometimes we do go over but if we do it is normally only by $10-$15. Our groceries normally come in around $150 each week so we manage to squeeze in a takeaway or restaurant (who am I kidding, we have a 14 month old we don’t usually eat at restaurants) dinner or lunch with a budget of $30-$40 and then whatever is left for the week we usually splurge on a coffee one morning.
Be flexible when you go shopping. I used to only stick to the one brand name week in and week out, I would only by a certain brand in toilet paper and another certain brand in cat food and another certain brand in oats. However if you can be flexible with your products and try to buy a cheaper version or buy a version that is on sale you will save yourself a lot more money each week. Most of the time the cheaper brand is actually manufactured at the same warehouse as the expensive brand and most of the time the expensive brand will have the exact same ingredients as the brand on sale.
Cut out the pre packaged expensive fruit and vegetables, not only is the pre grated carrot triple the amount of a single carrot it is also harming the environment with the plastic packaging it is sold in. The same goes for the pre chopped lettuce and the pre packaged fruit salad. A few minutes of your time to prep your own fruit and veg will save you a lot of money each week.
Cut out the junk and processed food. Foods that come with preservatives and loaded with sugars are not only bad for you but also bad for your wallet. Substitute a sugar loaded muesli bar that costs over $4 for a box of 4 for a piece of fruit that only costs .50c or substitute a can of coke for a glass of water (its free!). The moment you cut out the junk and start making your own baked goods at home it will save you a ton on your grocery bill each week.
Cut out animal products or at least reduce the amount you buy. One of the most expensive food items to buy on your grocery bill will always be the meat, eggs and dairy. Therefore if you can completely wipe out these items and start substituting them for vegetables or soy products not only will you be saving some animal lives and helping your digestive system you will save a fair bit of money each week off your grocery bill.
Do you really need that? Ask yourself this question when you want to splurge on something for yourself. There will be times where yes you will need a new pair of jeans because you’ve had the ones at home for 5 years and the zipper is about to bust but if its another cute top and you’ve already got 4 at home in different colours ask yourself do I really need that. This also goes the same for the men in the family, if they want to have an impulse by and by themselves a new bike helmet or a new lawn mower even though the one at home is still ticking along fine ask them do you really need it? And just explain to them the position it will put your finances in if they spend that sort of money. You could even workout a savings plan each week so you can save for the impulse items you want to by and that way it takes the impulse out of the equation and you have more time to process whether these items are worth saving for.
Find free activities for the kids. Doing daily/ weekend activities with the kids doesn’t always have to cost an arm or a leg. There are usually a lot to offer in regards to free family entertainment. You could go throw a ball at your local park, go play some games or read some books at your local library, go walk around the closest markets to you on a Sunday, go to the beach, go feed the ducks, go to a mums group, or even take them to the playground whilst you read a book and sip on a coffee with all of the money you saved for the week.
Don’t be afraid to say no. If your friend asks you to go to breakfast with them but you really don’t have the money in the budget to splurge tell your friend that unfortunately you cant afford it that week and you can either reschedule for next week and budget it in or you can invite them over to your house where you can cook them some home made pancakes or instead of sitting down having breakfast maybe suggest going for a walk together and chatting. Your friends and family will be understanding of your situation and they will appreciate if you are up front and honest with them about what you can afford to do and what will push you over budget. Don’t be that person that acts like they have so much money to their name but when you get invited to go somewhere you flake at the last minute because you really don’t have the money to go out and you are to ashamed to speak up about your financial strain therefore you just end up looking like a bad friend in the end. Most of the time either your friends will offer to shout you or they will be empathetic to your situation, you will be surprised at how many people are in a similar situation to yourself.
I really hope this helps you if you are struggling financially and if you have any further tips on how to survive on a budget please share them in the comments section below.