This is a guest article by Rick. If you are interested in contributing to Debt RoundUp, please follow our guidelines.
In case you hadn’t noticed, times are tight today. The economy has been sluggish for the last few years and recently shows only moderate signs of recovery. Job markets also have not improved at the pace that will put economic recovery on the fast track. Lots of people have begun to search for ways to make ends meet by making simple lifestyle changes. Creative spendthrifts have found many ways to trim the fat, but also know how to make the most of their savings.
Most people that sit down and take a hard look at their budget with a list of income and expenditures can quickly find places to save by cutting down or cutting out a few key items. Often, these optional expenditures are similar across households. Transportation is a necessity; everyone need to get where they’re going, but the price of individual transportation in a personal automobile has gone up dramatically as fuel prices continue to rise. Many large cities now sponsor and directly develop urban bike programs to offer commuters a viable alternative. Bus and rail lines sometimes provide cheap and environmentally friendly alternatives and for the truly cost conscious, strolling on foot is not only good for the pocketbook, it is great exercise.
Another reducible expenditure that impacts almost every family is the cost of food. Fast food and restaurants should be considered off limits when trying to reduce a monthly budget. It is always cheaper to pack a lunch, to cook dinner at home, to hold the burger and skip the fries. If you need the morning coffee, find the time to brew it at home, and save the Starbucks for another time. Items like these are great but we pay a premium for the convenience. Once again, an added benefit to avoiding easy restaurant fare is that a home cooked meal is almost always healthier than a fast option on the road.
Sometimes there is only so far you can go by cutting out items from a budget. The next place to look for creative ways to save for the future is by looking at what you already have (or will have) saved. Money that sits in a low interest or no interest bank account may actually be losing value due to inflation and certainly does little good as an investment. While it’s nice to have a small nest egg to buffer against hard times, savvy savers know to look for a high interest savings account to actually grow what they have earned. Times may indeed be tight, but for those on the edge; often all it takes is a little restraint, a good look at a budget and some clever saving to move the red back to the black.
Rick is an Australian content writer who currently writes on behalf of RAMS.
Image courtesy of Grant Cochrane / FreeDigitalPhotos.net
About Guest Author
It always disturbs me that savers are penalised through inflation, yet people who risk it all and get into debt up to their eye balls are better off in the long term. It seems wrong to me…
Glen @ Monster Piggy Bank recently posted..How to Assess a Prospective New Home for Risk of Bushfires before Buying
It disturbs me as well Glen. It just shows how society is backwards in they way they reward people.
I’ve been in a few cities with the bike rental programs. If I lived in an urban area, I’d be all over that. What a healthy way to get to work!
AverageJoe recently posted..Credit Card Rewards and Changing the Budget for Baby: 2 Guys and Your Money 026
I wish I had a program like that as well. My bike ride would be quite long, but I would do it.
I think cutting back on food spending is all too often overlooked as a great way to save money. There are many things that can be done from using coupons, having a meal plan, going to the store with a list, etc that can really help lower the amount spent.
John S @ Frugal Rules recently posted..5 Fun and Frugal Super Bowl Party Ideas
I agree John. I used to overlook it quite a bit, but then it finally clicked in my head.
When it really comes down to it, most people’s problem is that they aren’t willing to change their lifestyle. Therefore, their saving suffers.
I know that our financial turnaround simply involved me changing my lifestyle and perspective.
WorkSaveLive recently posted..Making Extra Money: Start a Blog or Write for Others?
I completely agree Jason. If you don’t make the change, then how can you increase you savings and get out of debt?
We are working on increasing our savings by significantly increasing our income!
Michelle recently posted..$3,340 in Extra Income, Life, Wedding Updates
I am doing the same thing Michelle, just not as well as you!
Our food spending used to be out of control. We would buy crazy groceries all the time- like crab legs once a week. I swear! It has made a big difference to have an actual grocery budget =)
Holly@ClubThrifty recently posted..Our Credit Card Churning Plans for 2013
We used to be a little out of control. I am the one that likes to go to the grocery store because I price compare. My wife just throws crap in the cart and has no idea the difference between prices. I can easily save $10 – $20 more than her just by price comparing.
I agree with Glen, rates these days are so low! I’d rather look for ways to make extra money than hope for my savings to bring interest.
Pauline recently posted..Little house in Guatemala, week 10-13
So true. You shouldn’t expect to make money on interest. You better start looking to make passive income.
We’ve reduced our spending quite significantly over the past 12 months and it is making things a lot easier to deal with.
Tackling Our Debt recently posted..How to Stretch Your Travel Budget: Free Home Exchange Accommodation
Same here Sicorra. It takes time, but it makes a big difference.
The every-day cup of coffee is the worst kind of spending. It costs between 1 and 3 dollars for a single cup at places like Starbucks, yet, it`s worth less than 10cents. If you love coffee like I do, do yourself a favor an buy a thermos, and brew your own coffe at home. If that makes you save 2 dollars a day that`s 730 dollars a year, just for coffee.
I agree. Small purchases are worst because most people don’t track them and don’t realize how much they add up.
In the past year or so, I really started price comparing at the grocery store. I used to be a sucker for name brands, and I’d buy food based on what I felt like eating, not what was priced well. Now I buy mostly store brand and I plan my meals based on what’s on sale at the store. I’ll go in with a few ideas, but if the items I wanted are more expensive than usual, I’ll revise my list.
Gen Y Finance Journey recently posted..Do You Memorize Your Credit Card Number?
That is a great way to do it. You can get into deep trouble going into a grocery store without a list or at least options.
Fuel prices? Use a bicycle! That could easily cut hundreds of dollars out of a family’s budget in gas/repair savings as well as gym expenses. Why pay to go to a super expensive gym to cycle on a stationary bike when you can do it in the real world with the wind whipping against your face. Easy small decisions like this add up.
Andrew @ Listen Money Matters recently posted..How I Save a Ton on Travel Expenses
I agree. I never pay for a gym membership. I think they are a waste of money and never truly utilized.
We’ve cut our grocery bill by over half this year from last year, simply by menu planning and avoiding all of those little trips to the grocery store to “pick up a few things”. We’re now feeding our family of 6 on less than $500 a month.
Choosing to discipline yourself in the area of spending really does work! Thanks for another great post.
Laurie @ The Frugal Farmer recently posted..January 2013 Financial Recap
Yes I am agree with family cutting cost of food by using coupons. We can also focus on different section as well like Buy nonperishable items in bulk, Reduce or eliminate your cell phone bill, Reduce (temporarily) your giving at church/synagogue/etc that can really help lower the amount spent.
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