How to live on less income

How to living on less income

With so many people either losing their jobs or at risk of losing their job, now is the time to re-evaluate everyday spending and save money. Some ways to do this are to re-evaluate housing costs and lower monthly bills by cutting back. Other ways are to cut back on using credit cards, eating out or spending money on other extras that may be available for free. Here are some tips on ways to cut back on spending in order to save money.

Pay Down Credit Card Bills

There is only one solution to lowering credit card debt and that is to simply stop spending. It’s time to get the credit card debt under control and stop adding to it. First, find a credit card with the lowest interest rate available and move the majority of the debt onto it. This way the monthly payment is combined and with the lower interest rate the debt is paid off quicker. Next, stop using credit cards for everyday purchases and use a debit card or pay by cash instead. It won’t take long to see the credit card debt begin to dwindle, and in time, disappear.

Cut Insurance Costs

This is a good time to re-evaluate house and car insurance costs. It may be surprising how much money can be saved on the insurances, especially if it hasn’t been re-evaluated for several years. It is easy to get quotes online and compare insurance costs quickly. In many instances, a person can save $200 or more per year on their auto and home insurance by switching to another company.

Save on Groceries

Eating at home for breakfast and dinner instead of at restaurants is a sure way to save money. The trick is to be frugal when shopping for groceries. Plan out meals for the week before going grocery shopping. Watch for the weekly specials, stock up when items are on sale and don’t cringe at using coupons. Even saving $3 or $4 a week using coupons can add up to a savings of $120 to $192 a year. There are many internet sites where grocery coupons can be printed. Look also in the Sunday paper and in magazines for money-saving coupons.

Use Consignment Shops

Use consignment shops to both buy and sell. Consignment shops are popular again with so many people looking for ways to save money. Sell unwanted clothing, toys and household items to earn extra money. While there, have a look around. It is surprising how many nice things are available for such a reasonable price.

Use the Library

It is so easy today to go out and buy a book or DVD movie, but it can get very costly. Try visiting the local library to save money. Most libraries have movies to borrow, and the book supply is endless. Another way to save money on books is by using the online site PaperBackSwap.

Save on Entertainment

Make a rule to never pay full price for entertainment. Go to the movies during matinee time when the price is much less expensive. Check on schedules for local free music concerts to attend. Many museums, aquariums and zoos have a free day each month for locals. Find out when this day is and save with free admission. Check also for free historical sites to visit. Look for free lectures on interesting topics at the local college. There are many ways to be entertained without having to spend a lot of money.

Living on less income does not mean having to do without necessities or entertainment. By being frugal when spending money, watching how much debt is incurred and taking advantage of many free services, a person can learn to live on less income.

How To Reduce Everyday Household Expenses

Some recurring bills, like the mortgage and utilities, are unavoidable. Other luxury expenses can be sacrificed in the short or long term to help balance a budget. The costs that remain are necessary, but can be reduced by careful money management, debt consolidation and by changing everyday spending habits. Often these expenses are items and services that are used on a regular basis.

There is a range of websites, books and resources that offer budgeting software, money advice and solutions for reducing expenses and living more frugally. Many of these are based in America or the UK and don’t always offer useful or practical advice for Australian households.

Australian Budgeting Resources

SimpleSavings is an Australian site with a ‘vault’ of tips provided by members and visitors offering ways to save money. Access to the vault is for members only (annual ‘satisfaction guaranteed’ fee). There is also a range of savings information and household money saving tips available for free. There is a regular email newsletter, advice on setting up a bill payment system, a downloadable bill payment and savings calendar and many other helpful money saving ideas. Membership to the site is a worthwhile investment for anyone seeking practical tips to reduce spending.

Cashed Up, Debt Free and Laughing: A Cheapskates Way to Living the Good Life by Cath and Lee Ann Armstrong (ABC, 2007) is a great book offering useful advice for Australian consumers on ways to reduce grocery, general household and everyday living expenses.

The Destitute Gourmet cookbooks originate in New Zealand and are suitable for Australian tastes and lifestyles. They provide tasty and cost effective meals and a variety of tips on how to save money on grocery expenses. A very useful range of practical cookbooks for family meals and entertaining.

Compile a Grocery Price Book

Both SimpleSavings and the Armstrongs suggest compiling a grocery price book, although with slightly different methods and purposes. Get a small notebook and start listing the price paid for items. Use one page for each item and list the date, brand & size, price paid, store location, and price per unit. Eg. A milk purchase might read: 13/1/08 – Homebrand 3L – $3.19 – Woolworths MH – $1.06/L. Use abbreviations for store names and locations. Recent receipts and specials catalogues should provide some information that can be transferred to the book. If the item was on special, this can be noted next to the price with an ‘S’ if desired.

After compiling prices for a few weeks, it should be easy to see which stores offer the cheapest deals on a particular item. Two to three months’ of prices will also start to show the store sales cycle (which often rotates on a 6 – 8 week basis), allowing purchases such as washing detergent and cereals to be factored in to weekly budgeting and save money.

Reduce Consumption

It is an obvious truth that using less of something, be it goods or services, will cost less. Review regular purchases and services and consider whether the frequency can be reduced to save money.

For example:

Haircuts – If appointments are extended from every 6 weeks to every 7 weeks, there will be one less trip to the hairdresser each year. Home hair colours can also reduce costs or by applying a base colour at home, additional highlights can be added by a hairdresser at a lower cost than a full colour.

Petrol – Plan ahead with outings to ensure that minimal trips are needed. Group jobs that need to be done in a particular area and complete them one the same day. Less driving means a tank of petrol lasts longer.

Consider ways you can reduce consumption by changing habits in the home. Many of these also have the added benefit of being friendlier to the environment.