You know, we all go through phases of life where we decide we need to cut back.
Things like wanting to save extra money for a trip or to pay off debt. Life changes coming up like a new baby or trying to buy a house. Or tough times like a lost job or huge medical bills.
Whatever your reason is for trying to cut your budget, it can be hard to know how to get started and where to cut your budget.
Don’t wait until things are really bad to make changes to your budget. Start cutting back and saving as much as you can as soon as you catch a whiff of tough times or big changes coming.
If there are rumors of cuts being made in the next few months at your job, it would be wise to buckle down and save up some extra money in your emergency fund just in case.
If you find out you are having a new baby, you have a few months to save up as much as you can to cover the loss of work hours, medical expenses, and extra costs. Start now.
If you are going to be buying a house in a few months, try and cut your budget so that you have extra money saved. There are always tons of extra costs when you buy a house besides your downpayment. Things like moving expenses and supplies for painting add up really quickly.
It’s always best to start saving early. You might be able to prevent getting to that “emergency/panic” stage because you have been preparing and cutting back early enough to be prepared for tough times and changes.
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How and Where to Cut Your Budget
It’s best to start cutting back your budget with your variable expenses. Parts of your budget like your grocery budget, eating out money, and entertainment money are variable. You have control over how much you spend on these things.
If things are really bad, I would cut eating out and entertainment out of my budget completely. Those things aren’t important if you’re not sure if you will be able to pay your mortgage. If you pay for cable, get rid of it or at least change your package to a cheaper one.
There are almost always ways to cut back your food budget. You probably have food in your pantry or freezer that can be eaten so that you don’t need to spend as much on groceries for a little while.
We save money on groceries by redeeming rebates through the Ibotta app. They have rebates available to earn money back on fruits and veggies as well as non-name brand items, which is awesome! If you use my link (click here to sign up) you will get $10 added to your account when you redeem your first rebate. You might even have a receipt in your wallet right now that you could use. Plus, if you invite your friends to use Ibotta, you will get $5 when they redeem their first rebates.
There are all kinds of community programs out there that provide at least some amount of food that will ease your budget as well.
Another way to cut back is with your utilities. Be diligent about turning off lights and unplugging appliances. Keep your house a few degrees warmer in the summer and cooler in the winter. You can skip using your dryer by hanging your clothes on a rack or line after they’ve been washed. It all helps.
If you’ve cut all that you can out of your variable expenses, take a look at your fixed expenses/regular bills.
Are there any bills that you can get rid of completely?
Maybe you have a land line at your house that you can get rid of because everyone always uses cell phones. Or maybe it will save you money to have less cell phones. If you’re paying for cell phones for your kids, can you get rid of those (or have multiple kids share a phone)? How often will they ever be somewhere where there isn’t someone they can borrow a phone from if they need to call? I know it’s not ideal, but when times are tough, you need to re-examine every expense.
Next, you can try to negotiate other fixed bills.
See if you can get a discount for your internet, phone, or cable. Search for other insurance providers for your car and homeowner’s/renter’s insurance. You might be able to keep the same coverage and pay less with someone else.
It’s that whole “necessity is the mother of invention” idea. When it’s important, we find a way to make it work. When we need to, we can find new ways to save money to make it through tough times.
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⇒ How have you cut your budget during tough times or big life changes?