According to a poll done by Gallup in 2013, more than 70% of Americans hate their job. For awhile, I was one. Normally, I make an effort to ride the waves of challenge, but when I got to a place in which I was crying on Sundays dreading going to work the next day, I made the decision to apply for a job making 10k less than what I was making.
Initially it was incredibly scary. My husband and I had a 6 month old baby and a lifestyle we enjoyed. But for me, my sanity was worth the risk. Initially it was incredibly challenging. I had debt and I was making minimal payments on EVERYTHING and I was scared to spend money. But flash forward to a year later and I think I can speak for both myself and my husband when I say we are in a better financial position than we were in when I was making more money!
Having less money forced us to get real and have serious conversations about our money. Those real conversations turned into real action and now we are taking some really good steps. Here are a few of the steps I took that allowed my family to survive a $10,000 budget cut.
1.) Tracked expenses. The first thing I did technically was set out to make a budget. But in making a budget, I had to get a baseline of my spending habits. I pulled up my last three months bank statements and documented where every dollar went. I almost went into cardiac arrest when I realized I spent over $200 each month on eating out! And not fast food date night eating out but eating luxury lunches every day. Seeing that sent me into such a shock that to this day if I do not do anything else I make sure I pack a lunch for work.
A lot of times we treat our debit cards like they have an unlimited balance and are shocked when we either run out of money or are in the negative. Tracking expenses helps to not only keep up with what you are spending, but also see what you are spending the most on so that you can adjust accordingly.
2.) We Made Changes on Bills. The second step I took when I got serious about my money was decreasing my bills. I made a list of EVERYTHING we pay (including daycare even though my dad keeps the baby). I then contacted each bill service and asked for a deduction or a special. We went from paying $200/month to $95/month for cable and internet . We went from paying $250 for two cars on insurance to $112. Some bills we were unable to get a discount on and just made a decision to cut it altogether. Unfortunately we did not get a reduction on our daycare services either but it was worth it to ask.
3.) We created budgets. Creating a budget helps to continue to track your expenses. It helps us to give each other heads up about upcoming expenses and in addition to that is helpful in projecting future expenses. Because I buy diapers and wipes every month, I can look at past budgets to predict how much they cost and know if I can afford a girl's trip. Having a physical budget helps me improve credit and to not overdraft because I am able to know exactly how much money I have left after bills. Initially I hated budgeting because when I finished I was always broke and it reminded me how much I did not have. After continued diligence and cutting expenses now I look forward to creating budgets and find it fun to manage my spending categories and now have enough money left over to work towards paying off debt!
4.) Adjusted our lifestyle. When I tell you hubby and I were some lavish spenders....we were some lavish spenders. We were spending $500 a month on groceries (for just me and him because baby was still on breast milk) and then eating out every weekend on top of that! We practically own our own redbox from movies we did not take back (2 and 3 at a time). When I took my new job, we instantly had to cut all of that out! We were able to cut our grocery bill in half by meal planning alone. I started consignment shopping for clothes for me and the baby. It has become almost addictive for me to go in Once Upon A Child (a baby consignment store) to see how much I can get with $20! You would think I was a big winner at the casino! I also learned to look for values on ebay. Those lavish meals? I learned to cook them myself at home and we now have creative date nights centered on spending the least amount of money possible.
Making all of these changes has enabled me to work a job that is relatively stress free. In addition to that, making these adjustments has taught me so much more about self control and myself and has given me skills as well as knowledge that I can pass on to my son about managing money. Do you have any tips to share on how to survive a budget cut?
