Budgets

So, the other day a friend called and asked for budgeting advice...how much was a minimal amount in each category (groceries, gas, etc).
Well, I answered and to each his/her own. I have done a budget and probably should be doing it again next month.

First: Check out this bit of advice since this guy is a pro, then read on:
http://www.stretcher.com/stories/10/10jan04b.cfm


It's important to keep spending under control if one cares to live within one's means (which obviously I think is a good plan).

When I started, I did a budget and strove to keep within it. But I also tracked actual expenses and that is something I still do a couple of months a year. Starting with target and goal amounts to spend/save is one thing to do.

Another is being realistic about how much one IS spending/saving (or not saving). Until I figured out where my money was actually going, it was tough to even figure out what my budget categories were. After a few months of tracking, it became clear that some of the lines in the budget book didn't work well for me. So I changed them. I separated the cell phone and the land line. I included a meal out once a month in the entertainment line along with Netflix. And I realized that I spent more in thrift shops for kitchen gadgets and "neat stuff" than was necessary.

So, once I knew where the money was going, I started picking the low hanging fruit. Pretty easy to skip an espresso or two a week and make coffee at home. That's 20$/month ($2.50 per americano roughly twice a week) so 240$/year. Then I started, for other reasons, cooking at least one meal per week entirely from scratch. That cut the "food budget" eventhough it raised the groceries budget. This summer I've slipped from the cooking at home a bit, lots of time on the road make it easy to stop for a sandwich, so will be making renewed efforts to do that again. Cooking at home is way cheaper, but it's also a lifestyle choice anymore. It means taking the time to cook rather than driving to get food. It means more time in the house and alone. I like in the house and alone so that is a good budgeting method for me.

Other low hanging fruit were shopping trips. If I didn't need something, I didn't go to a store. Not even a thrift store. I spent an entire year not shopping other than for groceries or if I had a specific need. Need, not want. Like underwear is a need if the old ones are actually worn out. A new shirt is a want if I still have a closet full of shirts that bore me. The need then had to persist for at least a month. And then I started with a thrift store run to see if it was there. If not, I gave it some more time until it was there.

Washing clothes in cold water is another low hanging fruit. Saves on heating water.
Cutting back on the amount of detergent was easy and my clothes are as clean as they ever were (I've never been that picky and don't buy white things anymore...too many stains).

There's more. I'll make a list some day.

It took years to get this cheap. One habit at a time. And there is much back sliding when my schedule is disrupted.

Once the easy stuff was done, I worked on the not-so-low-hanging fruit. Buying more bulk products. Making fewer trips to town (by now I'd moved to the boonies). Turning down the thermostat a degree or two a week one winter until I found my minimum long term comfort zone (55 degrees). Then, I figured out that in the summer I can turn off the water heater during the day and whenever I'm gone for a few days. If the showers are short (another common area for backsliding ... I loves me a long hot shower), I can go 2 days without turning the water heater on in the summer. The water is hot enough.

I hadn't used a clothes dryer in years...never did use one much after I moved out of the house. When I've used a laundromat the savings was very obvious. Then when I did have a dryer, I just never got in the habit of using it. Never did buy softener or softener sheets. Soft clothes are for weenies. Line dried clothes are often too stiff to be clingy anyway. And since most of what I wash is cotton...that is not probe to clinging. (Aunt Chris sent me a birthday card this year with a reference to someone whose fashion choices are based entirely on what doesn't itch...I thought it was very appropriate). So...what more savings can be had on laundry when one has cut out everything but the washing machine, cold water, and detergent? I went for the detergent. I mix most of it at home. Grate a bar of soap (I like coconut oil based castile soap, it rinses nicely), add 1/2-1 cup borax and 1/2-1 cup washing soda (which is not baking soda...but if you have hard water you can throw in a cup of baking soda too). I use 1-3 tablespoons per load depending on how grubby the clothes are. If they are super grubby or sweaty, I stop the washer for 15 minutes or so during the wash cycle and let things soak. Stains get pre-treated with fels-naphtha or a bar of laundry soap I found at a thrift store a few years ago (it's a big bar). About once a month I wash it all in bulk purchased detergent. And I also alternate with soap nuts. They aren't particularly cheap, but they get all the soap residue out of the clothes and in the winter, my clothes aren't all that dirty.

Getting in the habit of shutting off or unplugging everything but the fridge most days (except in winter when they furnace (electric) and water heater stay on, helped the electric bill so much that a couple of summers ago the meter reader stopped by to ask what I was doing. I don't know what level of "fruit" that is, but it's a more recent habit.

And then there are a few more things. I don't know if these are low or high hanging budget fruit but here goes:
Not replacing things. When something breaks down or dies of old age or gets passed on, I don't replace it for a while and see if I miss it. Right now I'm missing my rice cooker which went to a new home. But I'm going to try cooking grains in the solar cooker and see if I need/want a rice cooker.

Going to the library before the bookstore or amazon.com. Interlibrary loan is the cheapos friend.

Giving more away. Because why not? Why store and keep things in my house if I don't enjoy them.

Driving slower. 10-15% gas savings by going 55-60 miles per hour, coasting down hill, and starting slowly from stop signs. Add advanced techniques like avoiding the brakes by slowing down way ahead of the stop signs or intersections, keeping a very steady speed, and other hypermiling strategies can save 20-30% of gas. I'm not so good at the more advanced especially maintaining a constant speed on the flats.

Walking more and driving in town less.

Not paying for things that can be had for free.

Changing expectations. I no longer expect to get new shoes every year. I no longer expect to get "new" clothes at all (other than bras or undies because used undies would be gross). Used clothes have 50-90% of the lifespan of new clothes for 10-25% of the price, less if you shop at yard sales. Of course, one must be careful not to spend on gas to go get these clothes. I only thrift shop if I'm in a town with the thrift store for another reason.

And pay down debt! Paying interest is a straight loss. If the budget and whatever other techniques save money, putting it toward debt and an emergency fund (to avoid future debt) can be very helpful.

I never was much good at selling things but others have saved/earned quite a bit that way and paid down debt.

There are many many more, but those are the things I wish I had mentioned to my friend who called. I hope the budget she works out makes a good start for her and I hope that she finds which savings/budgeting techniques work for her.

I found that a strict budget does work for me in the short term to start a habit of lower spending, but it's not something I monitor full time anymore. I wonder why strict diets don't work as well for me? Still fat...oh well.