In 2007 I was living in Brooklyn, NY. I was considered a co-founder of a tech start-up and I was running our customer service team as well as developing the social media and community aspect of the company. It was important as our “product” was tech support on demand via the Internet. The company had reached a point where I was earning a salary and now that I think about it, it was quite handsome. I shared a 3-bedroom, ground floor apartment with one other person. I had DirecTV, a smartphone (a first generation iPhone), and even access to a car. I ate our pretty regularly and was fortunate enough to have income for shopping and entertainment. Sometime around February 2008 though things changed and quickly. Investors started calling and talking about backing out. Our steady stream of customers was dwindling daily. We found ourselves right in the midst of the financial crisis of 2007–08 and subprime mortgage crisis of 2007–09. As you can imagine, I was in denial. I refused to believe it was happening and in a vain effort to keep moral high and appearances up I started using my AMEX regularly and spending money I simply did not have. The sobering truth came in May though when my rent was due and I realized that my credit card was maxed out, I had no money in my savings account, my checking account was pennies from being overdrawn, and I had nowhere to turn. Something had to give!
At the start of 2009 I had left Brooklyn. The company had folded. I was staring down the barrel of $46,000 loaded AMEX. I had moved back in with my parents. My ego was deflated. My confidence was low. I had someone special in my life though who had chosen to stick by me the entire time (SPOILER ALERT: I married her!) She helped me realize that it wasn’t the end of the world and that if I changed my habits and focused on a different style of living – a more intentional way – I could find my way out of the hole. I took her advice and thus began a 4-year fight back to zero.
I say all of that to say that along the way my life changed drastically and I came across quite a few ways to live a BIG life on a tiny income. I defeated my waste and I want to help you do the same. Below is a list of tips and tricks to make the most of your pennies.
DEAL IN CASH. It is as simple as that. It has nothing to do with Dave Ramsey or snowballs or a struggling economy. It is about personal accountability. If you use cash and you budget with cash it is easier to see where to draw the line. If you budget $25/week for gas in your car then when that $25 cash is gone you know just how much you can drive.
COMBINE ERRANDS. We currently live 45 minutes from the closest big city. (to us a big city is any quasi-urban location that has a Target, a Lowe’s, a Tractor Supply, a Dunkin Donuts, and a Chick-Fil-A). Instead of going 2-3 times a month as we think of things we keep a list on the fridge and choose one afternoon to go to the city. It is usually a 4-5 hour trip but we get everything done at once without wasting anymore gas than necessary.
DITCH THE PAYMENT. Speaking of cars, we are a one car family. Because I work from home and my wife is a SAHM we are able to do so. It cuts down on expenses (gas, auto insurance, maintenance, etc) big time. If your family can’t do the same I would suggest selling or trading in any auto you have that you pay for monthly (either loan payment or lease) and instead purchase something cash-on-the-barrel. Remember. It is a car. For all intensive purposes it is there to get you from Point A to Point B.
REPACKAGE. Pre-packaged snacks are a complete waste of money. I remember finding out that the 100-calorie snack bags (Doritos, Cheetos, Snackwells, etc) were 100-calories because they were portioned servings. A 100-calorie package of Doritos was nothing more than 6 Doritos in a sealed bag. But at $6.98 for a 10-pack you were paying just about $0.08 per chip. At that rate a Family Bag of Doritos would cost $13.60. Makes no sense. But if you purchase that Family Bag for $3.98 and then make your own snack bags you are saving quite a bit of money.
PUT IT ON ICE. We found a great FoodSaver on Amazon.com for a very reasonable price. We use it to portion package meat we purchase in bulk at CostCo. For $18 or so we are able to buy 6 pounds of lean ground Angus beef. Our family eats about 1 pound per meal. So we are able to use the FoodSaver to make 6 portioned packages of beef which broken down cost about $3/pound. That is significantly cheaper than the $4.30/pound advertised this past week at Walmart.
LOSE THE CABLE. There are two alternatives here. We take advantage of both. We have an over-the-air antenna on the side of our house which picks up about 12 channels including the three major networks and FOX. It is totally free and the only time we have a problem is when there is a major storm system coming through. We also pay for a monthly Hulu subscription. At $7.99/month we are able to watch most of the network shows at the times convenient to us as well as movies, children’s programming, etc. It is a great alternative for us and while it does require an Internet connection, it saves us considerably from what DirecTV costs now.
VISIT THE LIBRARY. Even in rural America we have found that our library works hard to stay relevant to our culture. They have the traditional book check-out service but also have a free magazine and periodical reader where you can read magazines at home (major ones too like TIME, Newsweek, National Geographic, ELLE, etc). In addition they rent DVDs (the librarian told me they purchase 8 new DVDs per month) and even books on tape/CD. With a 14-day rental period we find it a nice way to keep our media consumption up-to-date.
PICK A PAYMENT PLAN. We have high speed Internet at home. I need it to earn a living. We use it for homeschooling. My wife is a news and research hound. It is essential to us and is unable to be compromised. However, we make sure to get the best monthly rate. We found that with our ISP if we commit to a monthly draft from our checking they give us a $10/month discount. I also call them when I see a special running for new users and I negotiate our rate (when possible) on that promotion.
WRAP UP AND STRIP DOWN. We have central heat and air. Our thermostat hovers around 71º year round. If we are cold we put on more clothes or use one of our several quilts. If we are hot we wear minimal clothing (as appropriate). We couple this tip with a number of other temperature control ideas (a whole different post!)
LIGHTEN THE LOAD. A good pair of denim jeans should not be washed after every wearing. In fact, they should be aired out and worn again. In America we are obsessive about our smell and our hygiene. In fact, we are a bit too excessive. We wash our clothes too much causing the fibers to break down faster. We wash our hair too much causing it to actually become too dry and in need of conditioners to return it to its natural state. If we were more conscious of how and when we wear our clothes laundry loads could be lightened and lessened making savings on detergent, water, and electricity much greater.
GET OUT AND ABOUT. Perhaps though the most rewarding and affordable things we have done over the years is learn what a commodity our own community is. During the summer they play second-run movies at the park. During the spring there is a festival or fair in almost every county for weekends on end. We have several state parks (and their wonderful amenities) right around us. We subscribe to newsletters and email groups from museums, parks, clubs, etc. to keep recent with any free admission days or special happenings.
And there are so many more tips. The idea here is that if you want to live BIG on even a fixed income you just have to take a long, hard look at your spending habits, your lifestyle, and the world around you. There is a middle ground and it is just waiting to be explored!
What tips do you have to offer for those looking to live on less? What did I miss? Share your secrets in the comment section below!
By Andrew M. Odom for the [Tiny House Blog]
I live on a disability pension that doesn’t leave a lot of discretionary spending. I actually do use a credit card for just about all my expenses but pay it off completely when the bill comes. I never spend more than the cash I have in the bank and I earn points on the credit card that I can cash in for a bit of extra money. It’s just as easy to keep track of credit spending as cash spending and in the meantime I have an excellent credit rating. You never know when it might come in handy.
Don’t use a clothes dryer, hang your wash. Saves lots of wear and tear and energy costs. All that lint in the dryer trap is bits of your clothing. Get over fussing about stiff towels, once you start using it to dry yourself it softens right up n contact with the water. A folding drying rack or retractable indoor line is handy when the weather is bad. If your house is too tiny to clutter up with a rack wait until bedtime or just before leaving for the day to hang the clothes and they should be done by the time you wake up or return. A covered outdoor space is ideal for a retractable line.
If you make your own snacks and as many other foods as possible from scratch you can save a lot of money and eat better too. There are recipes online for home made versions of just about every commercial food item. If you spend less money it usually means you’re going to spend more time, but you have to think about what you’d rather do with your time.
Always look for bargains and make full use of coupons. Many grocery stores have 1/2 price or other discounts on items if you go early. Don’t buy produce at the supermarket, it’s usually cheaper at the little mom and pop fruit and veg shops. You can often buy cheap bags of produce that are in less than perfect condition and may need to be dealt with quickly. One place near me usually has bags of 3 or 4 pounds of apples for $1, might be a bit mushy or have bruised bits but perfectly adequate for making a batch of apple sauce or baking as long as you get to it that day or the next.
You really need to google Mister Money Mustache. He’s got a whole website dedicated to many of the things you’re talking about and more.
Let’s not forget the local Thrift Shop. While they will not have everything at all times, they often have something you require at a much cheaper rate than the local Stuff-Mart.
We stuck with or plan to pay down the mortgage on a small (<1000 sqrft) home. Now as I approach 55 I am looking at retiring debt free while most co-workers are working another 10 more years. They have to pay off that mortgage on the 25000 sqrft. home, big fancy cars and those annual trips down south.
Sorry, I meant to say “2500 sq. ft. home”
Excellent post and great tips. Pssst: the phrase is “for all intents and purposes” not “intensive purposes.”
Thank you so much Amy. Yes. The grammatically correct phrase is “for all intents and purposes” however I was purposely using the eggcorn derivative “intensive purposes” to show that that only the most serious purposes were being considered.
Love, love, love that you mentioned public libraries! One of the best deals around–they’re free!