Welcome back to the Budgeting mini-series! Be sure to check out Part One: Understanding Your Expenses.
Part Two: Making Sacrifices
Even if we organize our finances wisely, we still need to make some sacrifices in order to stick to a budget. That doesn’t mean that it has to be painful, however. The key is to figure out what it is that you absolutely cannot live without.
First, go back over your tracking system of everything that you’ve spent your money on, the way that we discussed in Part One. From there you will be able to see where exactly your money goes. The majority of your expenses should be for basic necessities: rent or mortgage, hydro bill, food, and so forth. Look to the “extras” that you are spending money on. Can you cut back? Do you really need to buy Starbucks coffee every day? Do you need to go out to the movie theatre once every couple weeks?
No. You really don’t.
So that you don’t feel deprived, there are a couple different routes you can take. You can either cut back by half (for example, go to the movies once a month instead of twice; buy Starbucks twice a week instead of five times), and/or you can find a replacement (for example, rent movies or go to the cheap seats; buy Starbucks coffee beans and make your own coffee at home or find a cafe where coffee is a more reasonable price).
Second, look at what you are spending your money on in terms of necessities. Do you absolutely need to have cable? Are you spending more money on gas or bus tickets than is strictly necessary? Are you finding that you throw out a quarter of the food that you buy at the store? There are ways to cut back on all of the “necessities”. I don’t own a landline because my cell phone does the job perfectly fine; that significantly reduces my phone bill. I never watch TV so I don’t have cable (pssst… you can watch most TV shows online, anyways, for free). I’ll talk more in Part Four about saving on food that’s starting to go bad, but suffice it to say that I find a way to salvage the food that I buy so that it doesn’t go to waste and so that I’m not throwing my money away, either.
There are, of course, going to be some things that you will refuse to not cut back on. Fair enough. Nothing’s going to stop me from importing PB2 from the States once every few months; it’s a ridiculous luxury to buy powdered peanut butter online, but I really love it, so I cut back elsewhere (such as not going out to cafes regularly and not paying for cable).
Figure out what’s really important to you and work out what other things in your life you can significantly reduce. Back when the sistertraveller was the sisterroommate, for example, she was spending quite a good chunk of money on yoga classes. And it was entirely necessary. It relaxed and de-stressed her and helped her to deal with depression in a way that doing a yoga video at home simply would not. The key here is to then cut back on other things. We simply cannot have it all. We can’t go out every weekend and pay for expensive fitness classes and go shoe shopping and go to a fancy salon for haircuts. We have to pick and choose what’s important to us and sacrifice the things that aren’t as important.
Jamie made a great point in the comments section of Part One: Understanding Your Expenses:
I spend a lot of money on groceries. But, I am proud of that. I think it’s important to spend money on your food and your health. On the other things I spend on, maybe not so proud.
Knowing our priorities is key here. I refuse to buy poor quality food just because it’s cheaper; I also refuse to buy clothes that I don’t love just because they’re cheaper. But that doesn’t mean I’m out buying the best cut of steak out there or that I’m going shopping at boutique stores every weekend (actually, I can’t remember the last time I did either of those things). I do shop the sales and I do buy clothes far less frequently so that I can save up and spend the money on really quality items- and yes, that does mean that I might be saving up money to buy a very expensive Hermes scarf when I go to New York in August (I, um, have a bit of an obsession with buying scarves whenever I go travelling :D).
What is something that you refuse to skimp out on? What are some things that you spend money on that you think you could cut back on? Let us know in the comments, and if you have any advice for making sacrifices, please share!