Saving money is a hot topic these days, maybe because for so many of us, what we have doesn’t go as far as it used to.
So we look for ways to reduce expenses, stretch resources farther, and live happily on less, something my Norwegian Artist husband and I, with our brood, have been doing for years. The problem is, when you start looking for advice on how to save money, you hit articles that promise,
“Eat for $25 per week!”
“Live on $12,000 per year!” or some other such definite, appealing number. I have always found that, when a piece of advice makes me feel tense, stressed, or incompetent, it’s not the piece of advice for me.
There is no one-size, fits all method to saving money, because each household has expenses unique to what it is. Households of very limited income have access to public service and government programs that households over the income threshholds do not, so while Family A pays for its health insurance through a subsidized program, Family B budgets in a regular, much larger payment.
Or perhaps Family C is renting, and Family D is buying, the latter incorporating mortgage insurance, property taxes, and maintenance into its budget. Family E needs two cars — each with maintenance, insurance, taxes, and gasoline built into their cost — while Family F, which lives in a large city, uses public transportation unavailable to the suburban Family E.
It goes on and on, and any resource that promises you can live on a fixed amount, simply by doing Steps 1, 2, and 3, isn’t taking into account your unique situation.
So the first thing to do is eliminate the question in this title, How little can we live on? and focus, instead, on this question: What incremental, realistic steps can we take to reduce our expenses?
To answer this, you need to know what your expenses are in the first place, and this is where many people stop: track your expenses. Where do you spend your money each month?
The reason most people stop immediately after asking this question is because answering it seems so onerous and difficult, setting up a complicated budget that no one wants to tackle, much less stick to, for more than a day.
But doing something is infinitely better than doing nothing, so rather than worry about doing the thing perfectly, focus, instead, on just doing the thing, and getting an approximate idea of where your money goes. How much do you spend on food each month? How much of that is in restaurants, and how much in groceries? How about utilities, gas, insurance, and housing? You don’t need 15 categories; just hit the basics, and put everything else under “other.”
Once you have a loose idea of where your money goes, figure out which expenses are fixed — like a car payment, or the water bill, or property taxes — and which are flexible, like entertainment, which encompasses everything from bowling to pizza night, and unfortunately are far more optional than auto insurance.
And now you can start making changes, little ones because these are easiest to maintain, and individualized to your family situation.
“Drop the daily coffee.” That’s easy for me to say; I drink tea.
But how about this: Buy the daily coffee every other day, and put the savings aside to purchase the machine and materials you need to make your own coffee: flavors, plastic cups, little red straws.
“Quit going to the theater.” Again, easy for me to say; I prefer a book. But go halves again, putting the saved money aside, and wait for the movies you’ve missed to stream.
Make little, sustainable, bearable changes, and build on them. Recognize that the changes you make may not be what others would advise, but others do not live in your house.
Success breeds success. When you make one little change, and stick to it, you quickly realize that you can make another. After that one, you’ll think of another. And after that, there’s another, and after several months of this, you review your finances and see that you have made a definite, positive change in how you spend your money. You’re also living differently than you used to, and it feels good.
But it all starts with making that one, first, sustainable change.
This article was originally published in ThoughtfulWomen.org. If you would like practical, realistic ways to save money and improve your finances, please consider my book, Live Happily on Less, available in paperback and digital form at Amazon.com.