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Cutting the Costs

Money. It’s the driving point of our culture and if we aren’t careful, can become the center of our lives. Many of us will experience feast and famine whether it’s in relation to money, friendships, or time. When it comes to money, it’s so important to always track how much you spend and to have a budget. That way, if money does get tight, you are able to immediately think of several things to cut back. 

My husband and I are very passionate about budgeting. Having a strict budget right when we got married meant that we could pay off my school loans, save for a house, and set ourselves up for when we had our kid. And now, even though we are wealthier, we still keep to a budget. And we know exactly the things we would cut back if anything happened.

While this may not apply to everyone, basically you can just insert “whatever you spend money on unessential items” here and prioritize what really matters. 

Here are several ways to cut back on costs that should be easy for most people.

Drinks 

Not everyone spends 5 bucks a day on a traditional cappuccino with coconut milk, but whether it’s coffee, alcohol, or kombucha, you may find you spend quite a bit each day or month in drinks you can make at home or work. I love spending time at the coffee shop, but if money was tight, I wouldn’t get coffee there every day. And if I did want to have coffee, I would opt for a brewed coffee instead of a latte or cappuccino.

Alternate: Make coffee at home. It’s cheap and that way you can make it however you want. Don’t feel like you need an expensive espresso machine. Pour over or French Press coffee makers are 10-20 dollars and make very delicious coffee for a very cheap price!

Eating out

Eating out can get expensive. I’m out and about in town most of the day before I get my son from school. That means I’m usually getting a Jamba Juice or another meal out. 

Alternate: Make lunch at home if you work! Bring it along. Most people can eat a 2-3 dollar meal if made at home, instead of 10-20 dollars out for lunch. If your coworkers go out a lot for lunch and invite you along, then try happy hour menus or tell them you can go once a month.

Entertainment

Most people nowadays are cutting the cable, as it’s so expensive. However, keep track of how much you spend on subscriptions. Between Netflix, Hulu, HBO, Spotify, Apple Music, etc it can add up as much as cable. If you really enjoy watching TV, find the one subscription you like and keep to that. Also, going to the movies can add up, so see if any of your local theaters have 5 dollar nights and other such deals. 

Alternate: YouTube has so much content for free. Sure you have to watch ads, but you do even with paid subscriptions. If you have a DVD Player, go to Goodwill and find some cheap movies. Growing up, we had two channels. ABC and CBS. We would find VHS on the cheap and have movie nights every Friday with our pizza.

Memberships/Events

Are you the member of three different gyms and two wine clubs? If money was tight, I would definitely have to dial back any memberships I was apart of. That being said, having a fitness or gym membership can be fruitful, as exercise does do so much for health and stress relief. 

Alternate: Find a free or cheap way to exercise or have fun. Look up free events in your city such as a concert or Yoga group. If having a gym membership is the only way you stay sane and in shape, then make sure to get the cheapest membership and make it worthwhile. 

Cell phones/Devices

In our social media and tech world, it can be easy to think you have to keep up with the Jones’ and get then latest and greatest devices. Some people do need a smart phone or iPad for work/school, but make sure to get a good deal. While a new device can be an investment, do make sure you actually need it for work/school. 

Alternate: Talk to family or friends to see if they have a used device for sale. Get a good case and take care of it. My mom had her iPad 2 for several years and did her eBay work on it. You don’t need a new device every 1-2 years especially if money is tight.

Clothing: 

I have friends who have owned the same plaid shirt for 15 years. While not everyone can keep clothes this long due to growth in a variety of areas, clothes actually last much longer than people think. And a good pair of shoes can go a long way. I’m pretty sure my black and red Converse lasted me 5-6 years before they had holes in them. Some people do have to wear fancier clothes for work or school, so take this into account.

Alternate: Thrift stores, consignment shops, and sidewalk sales are your friend. At least in my area, I can find 150 dollar shoes for 10-15 bucks on an Über deal. I can regularly find Nike or Adidas shoes for 20 bucks. I got my son a Columbia fleece for 50 cents once at a thrift store. I rarely, rarely pay full price for any clothing item, unless it’s a 5 dollar shirt for my son at Target.

Vacations:

Vacations can make or break the budget. There are many easy ways to spend lots of money on vacation. Food, shows, events, flights, hotels, it can easily add up to thousands of dollars. But you can do vacations on the cheap. And if you don’t have much money, don’t go on vacations just because your friends go on one every other weekend. Most people get 1-2 vacations a year, if that. I have a few friends who go on a vacation once every 3-4 years because of work/time/money. 

Alternate: If going with other family or friends, split the cost of the AirBnB or hotel. Instead of going out to eat for every meal, stay at a place with a kitchen and have some easy meals you can do. Search Google for any special deals you may have. And set aside a specific amount of money for the trip, and don’t go over it! And you don’t have to make every vacation this crazy epic thing. A night at the beach having frozen pizza can still be amazing. 

These are just some ways I would think of to cut costs if money was tight. Some would be easier than others for sure. However, learning to live frugally can be hard at first, but then once you get used to it, it can be really freeing! 

Whether you are trying to pay off debt or getting a kid through college, learning to cut costs will help you in the end. Doesn’t mean you have to be bummed out all the time that you have to change the way you live. But it allows you to be more creative about having fun and then you realize that money doesn’t make you happy. People, faith, love, and memories can help fulfill so much more than money ever could. 

Bonus Content: 

My family has a quote “shop family first.” What that means is any time one of us needs a dress or a pan or any odd item, we ask family or friends to see if they have an extra or if we can borrow. It’s amazing how much stuff we can obtain and I’m always donating my stuff. I try to ask family and friends first before donating to other places, because I would rather have a friend or family member have something of mine than some random person.

One of my hobbies is going to Goodwill and other discount stores such as Ross or Sierra. Because of this, I find incredibly deals, such as 90% off climbing shoes or 5 dollar Columbia jackets. When a deal is really good, I snag it up, because even if I don’t personally need it, I know of a friend or family member that might need it. 

I have been able to sell or give away lots of climbing gear to friends and family, and that way people can still climb even if they don’t have money for a new pair of shoes when the toe blows out of their current ones. 

This is just another way to save money! Shop Family First. 

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Response to Geekdad’s “We’ve been doing it wrong” post

Recently on Geekdad blog, a contributor wrote about how impossible it seemed to only spend 3-4,000 dollars per year for each child.  The previous recommendation has been 10,000, and even that price seemed too low for this writer.

However, being a mathematician plus passionate about frugal living, my brain started immediately crunching the numbers.  Is it possible to do 4000 dollars a year per child?  What about 10,000?

As a mother myself, I know the cost of children can be high, but mostly of you choose it to be high.  That first year of being a parent can be quite spendy, because you do all the research and “have” to buy that 1,000 dollar crib and the 500 dollar stroller and you have the get the best daycare at 1500 bucks a month.  I’m here to encourage new parents and seasoned parents alike, I do believe it IS possible to raise a child using 3-4,000 dollars a year.

Let’s quickly look at some numbers.  For the first year, there are all sorts of things possible to buy, and not all of them useful or necessarily.  So let’s price the top things a parent needs for a baby in their first year.

Carseat:60 bucks on amazon, good safety ratings.

Pack n Play: 110 full price (but can be found cheaper at consignment shops)

Also note that one can get away with just a pack n play.  It can be used as a bassinet, then a crib later on.  I slept in a pack n play until 2 years old, so if low on funds, a bassinet, crib, AND pack n play is unnecessary.

Diapers/Wipes: 75/month, but can be way cheaper if cloth diapering, though I don’t know the exact numbers

Clothing: Nice/New baby clothing can be found all the time at thrift stores.  And if you get some from friends, the cost for clothing in the first year could be as low as 100 bucks for the entire year.

Stroller: 50 bucks easy on amazon

Baby food: 30 bucks a month approx if you make your own.  50-60 if you buy in bulk and go for the cheaper routes.

Formula: This one is tricky, it can be about 100 bucks/month depending on how much your little one eats, which is why if you can breastfeed it’s free!  But if you need to do formula, there are cheaper ones and even applying for WIC if needed.

Daycare: If you seriously want to make that 3,000-4,000 mark, daycare is NOT the way to go.  Many people I know basically work for daycare, i.e., their entire salary goes to daycare.  If you really want to save money (and daycare is expensive in your area), have one spouse stay at home and possibly work part time in order to avoid daycare.  I know this isn’t always possible, so bear with me on the numbers.  Certainly 10,000 per kid per year is possible on part time daycare or cheaper daycare, but 4,000 per kid per year would be very difficult to achieve in this case.

Car: If you don’t have a kid friendly car, then sell your current one and buy a used car on Craigslist in cash for the same or less than what your current car is.  This IS possible, because we’ve done it.  We have two cars and zero car payments.

House: You might think you need to buy a new house right when you have a kid, but if it’s going to make money tight, it is possible to live in a small apartment or house for the first couple years until you save the money to make a good down payment.

Toys: Once again, thrift stores can boast great toys for cheap.  My son will play will his 8 dollar playground ball all day long.  And talk to friends/neighbors, go to garage sales to find the bigger stuff, because often it’s cheap and barely used.  So we’ll go 100 bucks for toys total, if you are wanting to be extra frugal.

Health Insurance:  This will cost, of course, but you are probably paying less than 100/month for insurance for your child.

Crunching the numbers leaves us at about: 4080 dollars/year.

It is actually possible to do 4,000/year if you are choosing to be frugal, choosing to not buy the “best” stroller on the market.  I added formula (1200/year) in this mix too, which could easily be cut out if one can nurse for a whole year (I commend you if you can, I made it to 6 months!).

And of course, us parents can cut out many other things in our lives to make having children more affordable!  Check out my other blog posts about saving money. If you do want to spend more money on your children than 4,000/year, then you can certainly do so.  But it’s not so impossible as one may think!

 

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How to avoid those “surprise” purchases

I know many people who come home to their spouse and say “Hey look, I bought you an iPhone!”  or “Hey honey, I just bought a new car, come look at it!”

It’s these surprise purchases that can cause much tension in relationships.  While the former example may have been exciting, things may come to a head when the next bill comes and that added iPhone money makes the budget extremely tight.  Or you buy a new car, and your spouse or child gets sick and now you’re in trouble because the hospital bill is added on to your car payment, house payment, cell phone payment, etc.

This is a huge reason why budgeting makes sense to do.  While it can be fun to surprise your spouse with a purchase, it can also cause relational issues.  Even small purchases can add up.  Let’s say you and your spouse don’t budget, and your spouse just went out and bought 300 bucks worth of Starbucks lattes over the month.  Now you have much less to spend on groceries, or even soccer shoes for your kid.

My husband and I split purchases into categories as we budget, so we know how much is in each category for the month.  For example, we put a certain amount of clothing money for the month, if I decide to go over that (i.e. to buy another pair of shoes I don’t need) I know the rest must come out of my “discretionary” category.  Discretionary is basically our allowance for the month, the amount we can spend on anything we want.  My husband tends to save his over the months to make a big purchase, while I tend to make smaller purchases every month.  Once we are out of discretionary, then we can’t buy that Woot shirt or headphones until the next month unless we both agree to take it out of another category.

This has helped us greatly, that way we aren’t surprised or shocked when the other makes purchases.  As long as we agree to stay within our budgeted amount, we can each have that amount to spend in whichever way we desire.   Sometimes, if I want to make a bigger purchase, I’ll discuss it with my husband, and I’ll either sell something on eBay or he’ll give me some of his discretionary especially if we plan on sharing the purchase, whether it be a bike or a Nintendo 3DS.

The overarching idea is communication.  Making sure each person in the relationship knows how much to spend on groceries, clothing, entertainment etc, so that way one person doesn’t use all the money for one thing and leaves the other person out to skimp along the rest of the month.  We use a program called YNAB (you need a budget), which has computer program plus apps that all sync up together.  So, if I’m at the store, I can look and see how much I have to spend in each category.  Every single weekend, we go through our receipts and enter our purchases in (you can enter in the purchases on the go as well with the app) and evaluate each week how much left to spend.  Sometimes, we’ll spend more in groceries than usual because of a party, but maybe less in restaurants, so we’ll make the proper adjustments.

Having a plan on finances lessen arguments and tension in the household.  Having budgeting program is essential, and get help from a friend or family if you aren’t tech savvy.  Communicate each week on how the budget is faring, and if adjustments are needed.  Give each person in the family an allotted amount to spend each month, and don’t judge them if they decide to buy 10 star wars t-shirts with it or save up for LED water fountain speakers.  These tips should help prevent those surprise purchases and the small ones that add up so quickly.

Communicate.  Budget weekly.  Give allowance to each other.