How We Pinch Our Pennies

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One of our main objectives for this little blog of ours is to live beautifully on a tight budget. While we are no experts, we thought it might be beneficial to share a few of our habits now and again that are helping us live a frugal life.

EXPENDITURE LOGS

Just like a food journal leads to a higher chance of success for weight loss, so does tracking each penny. This one principle has completely changed my responsibility over money. While most of us have checking accounts that track our expenses, an itemized list is the only way to get an exact record of that $50 withdrawal from Target. Every item goes into its separate catagory accordingly, food into groceries, that card you bought into the gift category. Tracking expenditures for a few months is the easiest way to set a budget on all variable spending (everything other than set bills such as mortgage, car payments, utilities).

Everyone’s categories will be different, but after a few months of logging each item your categories will become apparent. My main spending is in the following categories: Groceries, Housekeeping, Personal (clothes, make-up, hair etc), and Gifts. I also have a misc category where I track random expenses as well as going out to eat.

MAKE A REALISTIC BUDGET

This seems very intuitive if you want to lead a frugal life but is trickier than it seems. It’s important to start with an expenditure log for at least 3 months and then average out each category of spending to create a realistic budget. Our budgets change from time to time as circumstances change, but a good rule of thumb is to have a tight enough budget to keep excess spending under control, and at the same time feel you have enough of the things you need. Not everything, but enough. To make a budget livable it’s important to include a few things that may not be 100% essential. For example, entertainment and eating out are always part of our budget, no matter how small we make these categories. It’s also a good idea to re-evaluate expenses at least once a year. The potential to save money on things such as insurance, cable, and phone are worth the time it takes to investigate.

.SET GOALS AND REWARDS

Everyone is different and you have to figure out how you can live frugally without wanting to kill yourself. It’s so hard for me just to save and watch the numbers grow, I want to know we are trying to reach our six month reserve, saving for a car, a trip etc. Budgeting is so much harder if you are not convicted on your goals. Setting realistic goals after you make a reasonable budget will help you stick to your plan. The reward is so much sweeter when you have worked hard to make your goal happen.

SHOPPING LISTS

Uggg, shopping lists. I hate ’em, but they are such a valuable tool for frugal living! Not only do we make shopping lists for the grocery store, we make lists of everything we may need and want. For example, I keep an ongoing lists on my iphone of things I need in my closet, with the most important at the top of my list. If my budget doesn’t allow, it’s easy to look at my list for the next month and prioritize. I also try to have a little money set aside in my shopping budget in case there is a clearance item that is a steal of a deal. It’s hard to part with money when you don’t need something right that second, but you’ll be happy in October when you bought that cute sweater back in April for 70% off.

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SELL AND BUY ON CRAIGSLIST

I love, love, love selling things we no longer need on Craigslist or local classifieds. Having someone come over, and give you cash for your junk is the best feeling EVER! How much stuff do you have laying around your house that you never use? Try selling it! Likewise, if I need large items for our home I am always scouting the classifieds for a while before headed to the store. We have saved so much money doing this.

DONATE

If you have items that you cannot sell, make sure to donate your items to a thrift store. One man’s junk is another’s treasure! It feels good giving something away, hoping it will bring joy to someone else. Another perk are donations receipts, which you can keep as a charitable donation when it comes to filing taxes. :)

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Although money is not always fun to talk or think about, we feel a great sense of satisfaction knowing we’re doing our best. However, we’d love to know more, what tips can you share with us?

One Response to “How We Pinch Our Pennies”

  1. LB Says:

    I’m so glad you did this post. Your money practices are really wise.

    I like to watch Suzie Orman on occasion. I always feel more committed to good practices after watching one of her shows. It usually reminds me how far I’ve come and how far I still have to go to meet my financial goals. My tip is to either have your own cheering section or find a good motivating financial speaker to periodically reignite your commitment to healthy financial practices.