Every January 1st, I contemplate the idea of a “New Year’s Resolution” and then quickly shy away knowing that by the middle of February, I will be bored with my choices or things will not have unfolded as planned. This year is no different. I’m not going to make a resolution that I will give up on and add to the pile of failed attempts. Instead of making crazy goals that don’t show results, we are taking a more realistic approach and we are going on a Spending Diet.
Here are the steps we’re taking:
1. We’ve accounted for every dollar that comes in and every dollar that goes out by creating a budget.
This step probably took the longest to tackle and after looking at our spending for 2010, it has proven to us that a diet is exactly what we need. We’ve divided things into groups: Debt (including our mortgage, student loans, car loans, and credit cards), Monthly Bills (utilities, insurance, and cell phones), and Areas of Opportunity (food, entertainment, clothing – things we have wiggle room on). The more we take away from the Areas of Opportunity group, the more we can put towards paying off our debt!
The amount of our hard-earned money that went to eating out, for example, was downright depressing. Especially when the majority of it was convenience food a.k.a. fast food and not fine dining. I’m have a degree in Culinary Arts! I can make food 100 times better than what I get at the drive-thru! And this year, I will do just that.
2. All of our credit cards have been removed from our wallets.
2011 is the year for wise budgeting, frugality, and cash spending. We’ve accounted for every dollar in our budget, and we fully intend on sticking to it. We’re still using online bill pay to pay all of our regular monthly bills, but things like gas, groceries, and clothing – we’re using cash or our debit card that’s connected directly to our cash.
Using cash is like playing a trick on yourself. I feel much more attached to my cash than my plastic. How easy is it to swipe your rectangular piece of plastic for $100 worth of items at the local department store? Super easy, and we used to do it all the time. How easy is it to hand over five $20 bills for those same items? For me, it’s incredibly difficult to “give” my money away like that.
We have a pretty good chunk of money set aside, but as I’m staying home with my new little one, we’re slowly but surely using it to pay for all those bills I mentioned before. We’ve designated a portion of it, though, as an emergency stash. That way, when the unexpected happens, we’re not pulling out our hair and screaming, “How are we going to pay for this?”
4. Coupons, Ads, and free samples – Oh My!
I am the queen of coupons these days. I keep a little photo book with labeled pockets for each section of the grocery store. I buy the Sunday paper, I subscribe to All You magazine, sign up for every free sample and coupon I can get – All in the name of FREE MONEY! Combining coupons with great deals I find in the Sunday paper ads is where I save the most.
Yesterday, I got a 50 ct. bottle of Excedrin, 2 – 10 oz. bottles of Palmolive Dish Soap, and a 20 ct. box of Finish Dishwasher tabs for a whopping $1.85 (that includes tax.) A perfect illustration of what using your brain, clipping a few coupons, and reading an ad can get for you.
Check out some of your favorite brand names on Facebook. You’d be surprised how many of them have a “Coupons” or “Free Samples” tab for you to take full advantage of – I certainly do.
In order to show myself how much I’m saving with coupons and rebates this year, I’ve downloaded the free 2011 Savings Tracker (courtesy of The Coupon Project) to help keep track. Yes, it takes a little dedication and effort to key in these coupons, but it’s all worth it when I see my savings piling up. Check it out; it’s a great tool.
I will have a Couponing: 101 post later this month – worth a read if you’re interested in savings hundreds (sometimes even thousands) of dollars every year.
So that seems fairly easy, right? We can do this, no problem. Or can we? Eating leftovers, clipping coupons, comparison shopping, saving instead of entertaining, no swiping our plastic? That’s a lot of self-sacrifice and dedication for a whole year. That’s also a lot of savings and happier times when we look back at 2011 and realize that we put our money to work for us.