The disappointing state of the economy hit home for us a few weeks ago when my company announced pay cuts for all employees to avoid more drastic cost-saving measures later. It wasn’t news I wanted to hear, but I was grateful it wasn’t worse. When I told Sherry, we went through disbelief, anger, and worry. Over the next few days we gradually accepted the reality of living on about $400 less per month.
As you know, we’ve already adopted an affordable lifestyle and take pride in living fully without spending much (Sherry gives me haircuts, we’re a one-car household, we cook at home, I brown-bag my lunch, etc.). Still, $400 felt like a significant reduction to our lean budget. We don’t have everything perfectly sorted yet, but here are the adjustments we’re planning so far.
1. Reduce my iTunes purchases: It’s a small change, but saving a few dollars at a time will add up. Music is important to me—like shoes are to Sherry—so I’m focusing on rediscovering my existing collection and using internet radio and YouTube playlists when I want new music instead of buying songs one by one.
2. Pause my gym membership: I work out at the Richmond area YMCA and often use it to shower after a lunchtime run. By shifting my runs to mornings or evenings I can shower at home for free. Because restarting the membership won’t cost me, taking a temporary break makes sense. Sorry, Sherry—your guaranteed supply of my “rippling muscles” will be on hold for a bit (yes, sarcasm).
3. Shorten our vacation: We’d saved for a week-long road trip to Atlanta, Savannah, and Charleston, but decided to skip Charleston this time. Cutting two days saved nearly $250 in hotel costs alone. And the extra time at home gave us a chance to relax without missing out on the trip entirely.
4. Watch movies at home: Movies are probably my second-biggest indulgence after music, and we usually allow a couple of theater trips each month. This summer I’ll practice patience and rely more on our Netflix subscription to satisfy my cinema cravings.
5. Redeem credit card points: We use credit cards for most purchases—not to overspend (we pay the balance in full monthly) but to track spending easily. Years of this habit have earned us a fair number of points, and we’ve decided to cash them in for some extra cash to help bridge the gap.
6. Remember our refinance safety net: Coincidentally, my $400 pay cut arrived just days after we refinanced and lowered our monthly mortgage payment by the exact same amount. Maybe it’s a cosmic joke, but it’s comforting. We plan to keep overpaying the mortgage if possible, but we can reduce our monthly payment by $400 if unexpected expenses arise—an existing fallback that eases the stress.
Overall, we’re optimistic. Sherry has earned variable freelance income for more than three years, so we’re used to adjusting spending to match fluctuating income. Until the economy improves, we’ll keep our noses to the grindstone and hands out of the piggy bank. Have any of you felt the financial pinch lately? We know we’re not alone, so feel free to commiserate or, better yet, share money-saving tips or encouragement.
For more ideas we use to keep money in our wallets and smiles on our faces, check out our other money-saving posts: the first, the second, and the third. Happy saving to everyone.