Of course the fundamentals of any balanced budget is that you can’t spend more than you make. It’s a no-brainer. It’s also not always easy (possible, yes, easy, no) to make sure that actually happens on a month-to-month basis.
With a large amount of credit available and/or minimum payments you could also make for “just one more month,” putting off really paying down debt, it’s easy to spend more than you make. I know this. I have been there.
Spending Less
We knew to be successful at paying down our debt, we’d have to spend less wherever possible. And this is where we found the power of making the most of stuff we already had.
I don’t know if everyone is like this, but when we really started going through our cupboards & drawers, we had a lot of extra stuff hanging around. Most of it was consumables that we regularly spent a small fortune on.
Our pantry was full of odd dry goods we rarely used and drinks we kept around. These became the makings of many new interesting recipes and cocktails we hadn’t previously thought of.
We also had a freezer full of leftovers and “rainy day” purchases that seemed like a good idea at the time. Well, it’s a rainy day now in budget land. No, it wasn’t always enjoyable or even tasty (the freezer is sometimes where dishes we didn’t really like go to die, because we don’t feel right just throwing them away – until we clean out the freezer months later). But it was frugal.
For the ladies (and the metrosexual men) – I found I had tons of half-used and trial-sized cosmetics and personal care products kicking around under the sinks. Sure, when I felt like I had all the cash in the world to blow on new versions, these seemed like garbage. But when pinching every penny, these kept me lotioned and potioned and pretty for the entire first half of the year.
And of course clothing – a small blip on the radar, but when we cleaned out our drawers and closet we found things we’d forgotten we had, which put off the immediate feeling of needing to purchase more.
So, we are were (!) lazy, forgetful, slobbish and wasteful with all that extra stuff hanging around. But using it up, as an immediate budget-saver, really helped us get through some of the tighter months. And of course, it had the added bonus of getting us cleaning up our act regarding the stuff we horde.
Making More
Neil and I both work full time at fairly demanding jobs. We’re paid respectable wages and certainly weren’t about to get raises in this economy.
But there are so many other ways one can ensure more money comes in.
One of those was to sell off our hockey tickets for the season. We share half-season’s tickets with my family, and so had an allotment of games we had already purchased tickets for. By selling these to friends and acquaintances, we turned a sunk cost into cash, and spun that cash into a few smaller-budget entertainment outings.
Along the previous theme of getting rid of excess stuff, we sold a bunch of books we no longer wanted to a used bookstore. If you have extra things around that someone may want, put in a bit of effort and turn it into cash – you’ll be amazed at how much you can get, and how far you can stretch those few extra dollars.
The other big way we “made more” was to really sort out our accounting and taxes. As I mentioned previously, we were paying way too much in taxes and didn’t have the best grasp of our personal situation. It seems counter-intuitive to hire someone to do a job when you’re trying to save money, but the fees we have paid to our accountant have been more than covered (sometimes 10 times over) by the benefits we have gotten by using him to do our taxes and tax planning, rather than doing it ourselves.
Having someone on your side who can help you navigate the waters and maximize your returns is a very good investment, and if you can cover the initial fees, you will come out ahead. Also, if any locals would like a referral to our accountant, drop me a line.
Really, none of these ways of spending less and making more are rocket science, but it takes both a desire to do whatever it takes and a bit of creativity in approaching your own situation to make it work.
Next up: The final installment in the official budget series; where do we go from here?
