- Personal Finance
Saving Money and Living Cheaply
Hard Times; Where Does the Money Go?
"Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."
Mr. Micawber, from David Copperfield by Charles Dickens
Times are tough. At least they are for many people. Cutting costs is a challenge when expenses seem to come from all directions -power, phone, gas, petrol, food, bank fees, clothes, entertainment, health...etc, etc. It's easy to feel swamped by it all, especially if you have debt and accumulating interest on top of the cost of living. Mr. Micawber was right, spending beyond our means is a recipe for stress and unhappiness.
The truth is our entire economic/social system is designed to entice us to buy things that we don't really need. Most of us know this already, so why do we do it? Why do we accumulate stuff? Although it might give us a temporary mood change, it doesn't make us content in the long term.If you've got plenty of money, fine - shop 'till you drop and help keep the capitalist economy spinning but if you're in debt and struggling, excessive spending is just not worth it.
My debt levels began to spiral out of control last year, due to a period of reckless spending, a corresponding drop in income, a natural bent toward avoidance and a general disregard for forward thinking and common sense. It was becoming increasingly hard to catch up with my growing debts and In the end I was having trouble paying my mortgage. Serious situation. After a period of financial soul-searching, finally, I put in place some austere economic measures to try and get myself back on track.
Economic Measure No.1: Stop Buying Stuff
This simple measure proved to be much less painful than I thought. I used to enjoy shopping but the trouble was.. a) whilst browsing around I'd inevitably see something expensive I had to have and/or b) I'd end up bringing back a heap of cheap, unneccessary things, some of which I'd end up disposing of, just to get a retail fix and the short lived gratification of gathering stuff. Yes, some of it was nice but not needed. .
Now as a general rule, I don't buy anything...nothing, zilch, unless it's really necessary. I still enjoy shopping but now I savor the experience as a rare luxury and not as a regular form of entertainment. The funny thing is, I really don't miss it; in fact it feels good not to be weighed down by a load of materialistc crapola. So, find something else to do instead of shopping - discover an inexpensive, absorbing hobby, visit your grandmother, play badminton, join HubPages - in the long run it will be more rewarding.
Economic Measure No. 2: Decrease Power and Telephone Bill
When I received my electricity bill at the end of last winter, my eyes nearly popped out of my head and not in a good way. Power costs have risen considerably and they're set to rise even more over the coming years. The government wants to encourage us to use less power and I've taken the hint. I remind myself of my father, who used to run around the house saying things like "turn that light off!". I've done all the usual things, switched to energy globes, sealed up drafts to help reduce the heating bill and I no longer leave my appliances on standby as over time this usage can add up. It would be good if I had solar panels but I can't afford them at the moment.The most significant change I've made however, is simply to be conscious of where and when I'm using power; just remembering to turn off the kitchen light when I'm in the living-room watching TV, should make a difference.
As far as the telephone bill goes, I've taken a drastic measure here and had a bar on calling mobiles and STD put on my phone, as the bills were really shooting up here too. This is inconvenient but I have a pay as you go mobile I can use when I have to call a mobile or interstate and this way I am far less likely to make unnecessary calls to mobiles. Again, it's made me conscious of usage.
Economic Measure No.3 Home Cooking
I've always been a bit of a mood cook; that is, if I'm in the mood, I'll cook. If not I'll get a takeaway or sometimes even stoop to buying some horrible plastic looking processed food item. Well all that's changed - a quick search online will reveal that there are literally hundreds of quick, cheap, easy recipes that you whip up at home in less time than it takes to order and receive a pizza. Making your own meals from fresh ingredients is healthier, tastes better and can potentially save you a significant amount of money. It's so easy to make a cake from scratch, I can't understand why people buy packet mixes and a homemade cake tastes infinitely nicer. Same with pancakes...dead easy. Why buy a ready-made pancake mix?
Now unfortunately, fresh food is not always as cheap as I'd like but there are measures you can take to minimise expenses. For eaxmple, always buy fruits and vegetables when they're in season, otherwise you'll pay too much. Keep an eye out for what's happening in the marketplace. I haven't eaten a banana for months, as the Queensland floods devastated crops so now they're about $2.70 each in the supermarket...I'll get my potassium from somewhere else. Consider too, buying meat when it's on sale and freezing portions.
There's also the option of growing some of your own fruits and vegetables if you have the space, or you could even try pots if you dont. Things like spinach, zuchinnis and tomatoes practically grow themselves. Even better if you are able to plant fruit tress..I put in a mandarin tree a while back and this year, for the first time, it's loaded with fat green fruit. I can hardly wait for it to turn orange. I have to confess, as far as growing vegetables go, I don't do as much of this as I should but I'm more and more coming around to the idea that setting up your own little organic garden is the way to go.
Economic Measure No.4: Give up Lattes, Walk More
As a coffee lover I'd got into the habit of buying a takeaway latte everytime I went anywhere. I loved, the smell, the taste, even the poisonous polyurethane cup...the whole thing. However, at $4 a pop , they were really adding up so the latte addiction had to go. Like the shopping, a bought coffee is now something to be savoured, not gratuitously consumed and as a result I estimate a saving of about $16 to $20 dollars a week. Worth the sacrifice and while lattes my not be everybody's cup of tea (coffee?) I mention them here as an example of one the many small ways you can economize. Perhaps chocolate bars or cans of coke are your addiction..well, consider giving them up!
Another small adjustment I've made is to walk and not drive whenever I can. I live quite close to the local shops and it's just silly how I would jump in my cart to travel the short distance to buy bread and milk or an onion. Walking not only saves on fuel, it vastly improves your health so it's a win win situation there.
All these simple measures were born out of necessity not choice. At heart I'm a spendthrift - naturally reckless with money. Easy come, easy go. Thus, this whole economising project has been a steep learning curve for me but I have changed my evil ways, at least until I get on top of things and I don't intend to ever return to the kind of thoughtless consumption I used to indulge in. Deep down, spending money that I didn't have left me anxious and feeling bad about myself. I'm still not able to save a great deal of money but I am whittling away at my debts and I feel better for it.