Monday, August 31, 2009

cutting down on spending

I've been working on a Mod Podge craft project for the past few weeks, doing one bit at a time while watching True Blood or Grey's Anatomy online in the evenings. It's not the finest craftsmanship, but I'm happy with it all the same.

I bought the drawers second-hand from the Camberwell market ages ago and started painting it red. I wasn't feeling that so I used found papers to decorate the drawers instead. The top left and right are layers of vintage pattern paper. The diamond blue pattern was part of the packaging for something I bought. The blue is from the cover of a vintage book we were going to give away, and the bottom drawer is covered with pages from another vintage book.

It's going to be a totally new thing for me to actually have desk storage. Not sure how I'll best use it yet.

I've just realised how much I've bought online in the past couple of months. Books and stationery and tape and things.

mouse pad from My Favorite Mirror

tape from Nothing Elegant

lacy bird bowl by Prince Design UK

And that's only a portion of my purchases. I thought I was doing well because I carefully considered each purchase, and nothing I bought was a waste, but that's not good enough for me. In the interest of saving money and reducing environmental impact, I want to do better. I've been reading a book called Budget Wise, Dollar Rich, borrowed from the libary like a good little saver.

Looks a bit spammy, doesn't it? Despite that, it's really helpful. Now that Tim isn't working (for money, anyway) I'm paying the large bills, so I've made a budget for Heidi & Seek and for home. It's all well and good to make a spreadsheet with the best of intentions, but although I've done that in the past, I haven't enforced what I've written down or monitored how I was doing. I've never been in much debt, and I always pay off my credit card during the interest-free period, but I've never consistently put money aside for savings either. Except when I was saving for a holiday, but that was different. Single life living at home with your parents is so different.

Anyway, my plan of attack now is this:
  • I withdraw in cash a certain amount at the start of every week, and must only use this to pay for things. Just before I withdraw the next week's allowance, I put the leftovers of the previous week in a jar. Any additional money I get, like gifts or random cash goes in this jar too. My motivation for keeping my spending within my allowance is seeing this jar's contents grow. It'll pay for extra more expensive things, or is there if I feel I deserve a treat. I might allocate 20% of the jar to 'treats' and the rest to savings, and then deposit it at my bank when it gets big.
  • I've made my allowance quite low because I want to try to make do. Since we're vegetarian our meals don't have to cost much. Our pantry is full of things we keep accumulating but don't seem to use, so I want to see how far I can take what we already have and only buy the basics week to week. They will easily fit within my allowance.
  • I'm doing a similar thing with Heidi & Seek, because sometimes I can get carried away with buying supplies or whatnot. Some months my expenses are sky-high and some months it's very little. I'm setting a monthly allowance for Heidi & Seek, except at the end of the month, the money left will be topped up instead of taken out, saved and completely replaced.
  • For Heidi & Seek purchases that I don't need immediately, like certain books and equipment, I'm putting aside some money each month into a linked online account, and I can only buy them when I have enough in that account.
  • Then of course I've made the standard annual tables of bills and other required expenses, but there's not much I can do about most of those. I cut my mobile phone plan from $50 to $20, and I'll see if there are cheaper options for the rest, too.
The good thing about this cash system is that I can see how much I've spent that week without having to keep a tally (although I'm being anal so I'm doing the tally anyway). And I can still buy the things that mean a lot to me, but not just 'when I feel like it' and not all at once. I have to save up and to really consider where I want to spend my money.

Do you budget or have system that works for you?


Clare said...

I love budgeting, it's a little bit sad and creepy, but it just makes me happy!
Although it's mostly about things in the UK, this site is my lifesaver...
I'm sure you could find general advice which would still be relevant.
Good luck with sticking to your budget plans.

emily said...

I agree with Clare. Cutting down on spending can never be easy but indeed it is fantastic when you see something 'grows' and that is 'savings'. I really like your plan, hopefully I can consider some of them :)

JulieG said...

I like your jar idea, it's a handy visual to keep you up to date. I'm terrible at weekly budgeting, so once or twice a year I sit down and work out how much my bills/loans are, and find the average fortnightly amount. I put that amount in a separate account and all bills except groceries come out of that. A set savings amount goes into another account (the "pay yourself first" principle). Then, if there's money left in my transaction account, I can safely spend it knowing the electricity won't get cut off or I'll never get my dream holiday. But when it runs out, that's it until next pay day - so I have to think about what's worth it and what's not. Every 6 months or so I check my sums again, in case of price rises for the bills, etc. Lately I've been spending less money on junk, so I've upped the amount going into savings so I don't backslide :)

It's not for everyone, but it works for me just fine. When I spend all my time budgeting I *feel* poor, this way I don't think about it too much.

kalliopi said...

i was doing this thing where whenever I ended up with a $5 note I would put it in a money box.
I ended up with quite a bit of money after doing this for 4 months.. BUT then I was naughty and used it in an emergency and I never got back into it.
You have inspired me to start again!!

Clare said...

p.s. I also tagged you for a blog award:

Anonymous said...

I'm going back to being a student next year so all this budgeting advice will come in handy!

One thing i do is to shop once a week for food. By the end of the week i have to get creative and try to use up what's left. I hate wasting food plus i'm sure it saves me a little money.

Jean said...

Question I REALLY need this item. Most likely "no" -
Also, if you avoid impulse purchases, most likely you will not go back to purchase the same item you wanted a couple of days ago. I have been asked to budget myself...I think I will take my own advice going forward. :)

You know, I heard this once. If you ask kids to build a tent, do they go out a buy one. NOPE, they find what they can at home and compromise. So therefore, less spending, and more money not leaving the bank.

As for food, always shop with a full stomach and a list. :)
Jean (St. Louis, Missouri)