Fact: I am a government worker. Which means that every two years, we wait with uncertainty to see what type of contract we are going to have for the next two years and how our pay will be impacted. (FYI, my pay is about $8 - 10K less per year what it would be in the private sector for my job, so all those reports of govt workers getting paid a lot are not really true). In the last ten years we have had our pay frozen several times, no cost of living increases, no pay increases of any kind, and two years ago we had to face 14 days of unpaid furloughs added. This next budget we are looking at even more drastic cuts, as the economy struggles to recover.
In Oregon at least, we have not yet recovered from the impact of 9/11/01 – and the housing collapse just made things worse. For those of you that work in the private sector, or who are self-employed, times are just as bad. Living in our state capital, I saw what cuts to state workers pay did to those in the private sector; restaurants cut hours or closed, retail stores went out of business – state workers spend a lot of money here in Salem, and our wage cuts trickled down and affected everyone. So times have been tough.
No matter where you live, whether you are working or on unemployment, there are ways to tighten your belt and save money. If you can cut incidental costs here and there, you can end up saving a lot of money.
If you are fortunate to have a job, and pick up a coffee or soda at work on a daily/weekly basis, you are losing a lot of money every month. Soda from the machine at our work is now $1.25 a can; I see some people in the break room buying a soda every day. Five cans of soda a week costs you $325 a year. If you purchase soda at a store by the box, paying $4.50 for 12 cans ( sometimes you can get it for much less), you are paying less than forty cents a can, or $97 a year. That is a savings of $228 a year.
Soda is not really that great for you though. I know I should be drinking more water, but just can’t get up the enthusiasm for it. One way I have tricked myself into drinking more water is by purchasing Crystal Light Drink Mix On the Go. For $2.99 (on sale) I get 10 packets of Lemonade flavored drink mix. They are supposed to flavor 16.9 fl oz of water, but I just put in a little bit in each cup of ice water (ice and water are free in our break room). One packet will last me two days, or about 8-9 8 fl oz glasses of ice water. I get a bit of flavor so I am not drinking just water, and it saves me a lot of money. Cost is about $39 a year; a savings of $286 over a daily pop.
If you don’t have access to ice and water at work, take it with you. Save up some soda or water bottles, and the night before, mix up some drinks and freeze them. They will keep all day in a backpack or large purse; you will always have something to drink and won’t be tempted to go off your budget and buy expensive drinks somewhere.
Eating at a local cafeteria is a temptation. I know a lot of guys that hit the local deli almost every day, and then complain that they never have any money at the end of them month. No wonder, they are spending at least $5 a day eating lunch out. That is $1300 a year! Even if you eat out only once or twice a week, you are still spending over $500 a year. I usually make extra of whatever my dinner is the night before, and that becomes my lunch. Or, use your crock-pot and make up a beef or pork roast, then use the shredded meat for sandwiches. If you can’t eat it all right away, freeze it!
In the winter I make up lentil and barley soups, with lots of veggies and great tasting broth, divide them between little containers, and then stick them in the freezer. All I have to do then is grab one out of the freezer in the morning, grab some cheese and crackers, maybe an apple or orange, and I have my lunch. Being prepared and planning ahead is a great way to save money. A tiny bowl of soup at the deli is $2.50 – mine cost about 30 cents; if you eat soup three times a week over the 3 winter months, that is a savings of about $80!
About halfway through the afternoon when you need a quick snack, don’t head for the vending machines! Plan ahead. I hit the local warehouse store at the beginning of the month and buy trail mix in bulk. Sometimes I will make up my own, getting different nuts, dried fruits, maybe some chocolate covered coffee beans. I mix everything up when I get home in a large bowl and then bag up a cup at a time in snack size plastic bags. I grab a couple and keep them at work so I have something to much on if I get hungry. This is really important for me since I am diabetic and need that little bit of protein once in awhile. This is much less expensive than buying from a vending machine – and you have control over what goes into the mix!
You don’t have to deprive yourself; I usually plan to eat out at the deli at least once a month, but I work that into my budget. And if you still want to have your fancy coffee every day, there is a way to save on that also. Our local coffee cart has a deal where if you buy a prepaid card, you can save on the cost of your drinks. I like a hot chocolate some mornings, and they cost $1.75 for a 16 oz cup. If I had one every morning that would cost me $455 a year. With the prepaid card, I get a discount on the cost of each one, and when I have gone through nine, I get the tenth one free. So my cost for 10 hot chocolate drinks works out to be $1.35 each, or $351 a year. (That is still a lot to spend, but at least I am saving about $100!). So check around and see if any of the vendors you go to offer any deals or punch cards. Make sure you budget that money not as grocery money, but as treats for you.
If you don’t keep a budget, you are losing out on one of the best tools for saving money. But in order to create a budget, you need to know how much you spend every month. So pick a day, and then start saving your receipts for everything you buy for one month. Keep track of all the bills you pay for one month. You may be surprised by where your money is going. Next month, I will post a link to a site where a budget tool is, and then you can start working on keeping a budget.
Two years ago when we were told about the furloughs, a lot of people where I worked panicked. For those in my pay grade, that meant losing about $1,075 a year – how can you absorb that when you are living paycheck to paycheck? Because I keep a strict budget, I was able to go and see where I could cut back. I had two items that were for me “luxury items”. I paid for a parking space under our building, and I had a high school girl coming in twice a month to help me with the heavy cleaning. By cutting out those two items, I was able to absorb the cost of the furloughs. I didn’t panic, wasn’t stressed out, because my budget let me be in control of my situation. That is what a budget can do for you.
By being aware of what you are spending, cutting back a little here and there, you could save at least $1000 a year, just by following the suggestions I have made so far. What would you do with $1000 a year? In a couple of years, that could be a new car, a major purchase, like a washer and dryer, or a trip you always wanted to take. It all starts with making little decisions every day, planning ahead and being smart in the choices you make.