I was raised in a "cash" society where everyone bought things on "cash" basis. This meant that we only bought what we could pay for. Consequently, we had mostly what we needed and maybe a little more.
I will admit to being sidetracked along the way, and getting sucked into the consumerism of things. Credit cards were definitely "enablers." We woke up one day and found that debt had slowly crept up on us, and decided that we should do something about it. We set out on a payment plan, but later found ourselves slowly burrowing ourselves in debt again. We realized that we needed to do something more than just creating a payment plan. We had to take a closer look at how we "lived."
We are now in the process of undoing the habits of the last 10 years, and learning how to live within our means. We spent the last 18 months trimming the fat, and paring down our lifestyle. We are, by no means, done. We are trying to enjoy the journey, and learning more about ourselves in the process (things we are willing to give up, and those that are not negotiable). Not an easy road to take, but absolutely necessary for survival.
One of the key learnings along the way was that it was all about balance. We started with defining what was essential (shelter, food, clothing, transportation, medical insurance), and then defining the "nice-to-have's."
Here is what we have done (remember this is what works for us, and may not work for you, but I think you will get the idea):
1. Shelter - We decided to stay in our current home because we liked the community, and are part of a really good school system. We figured this decision was for the kids, and we would not compromise on this one.
2. Food - We cut down on the number of times we ate out. Trying to learn how to cook (operative word is trying). We still go out to eat once in a while, but we order only what we can finish. Cooking at home saves us a ton of money. We also bring packed lunches most of the time, and brew our own coffee at home. The compromise here is that we allow ourselves to eat lunches out or buy "signature" coffee once in a while (2x per week vs. everyday!).
3. Transportation - We gave up the gas guzzling SUV, and now drive a Prius. We love it and take it everywhere.
4. Clothing - Thank goodness I had the sense to buy neutrals for our first born so that the 2nd child could still use most of the clothes. We only buy what we need (this one was a tough one for me! so many cute clothes out there!). We also tap into used clothing from older cousins and trade what we have from our older children for clothes for the younger ones. We also try to get the most use of clothes (flower girl dress was used again for a recent brunch; toddler tux for a wedding was also a vampire costume for Halloween, etc.). Pants that are too short (but still fit at the waist) would be recycled as capris for the summer.
5. Medical Insurance - This was a major expense for us, and we looked around for cheaper, but comparable coverage. Blue Cross and Kaiser have individuals and families plans that you can tap into. We made sure that we had the best coverage we could afford. We had to do a lot of research on this and suggest that you do the same.
6. Utilities - We cut services to the minimum. This meant basic phone service (no caller ID, etc.), We figure if it is important you will call back, text or leave a message. This also meant switching to basic cable service - no HBO or premium channels. What was important for us was to have PBS Kids, History Channel and the Science Channel, and those were on the basic tier. We also cut down on the number of cable boxes we had so that not every room had an active box.
We try to control our water usage - making sure to wash only full loads. We use the cold water setting instead of warm or hot. We have a front loading machine which also cuts down on water used. We timed our sprinklers to water less frequently. I am proud to say that our water bills have gone down an average of 15%.
We also air/line dry clothes when we can. We have limited the use of heaters and air conditioners. The answer? more comforters in the winter, and adjusting the number of layers of clothing. Don't get me wrong, if it is really cold and it will affect our health, we turn up the heater. If it is just a "comfort" thing, then the kids know what to do. Happy to report that our PGE bill is under control and we did not get anything back higher than $200 in the winter. We've been really really good!
7. Entertainment - with 2 small children this was a tough one. But then we discovered the public library system! Ours is a consortium of libraries in the area, and you can put items on hold from other libraries and pick up at your local library. I have cut a significant chunk out of our entertainment expenses by borrowing books, magazines, and DVDs (yes, even the latest releases!) from our local library. Our cable provider also has an "on-demand" feature that we love. We can watch episodes of our favorite shows as well as old movies anytime. Our rule is we check on-demand, then the library, and then if we can't find it, and we really want to watch the movie, we visit our local red box and rent in for $1. Most of the time, we find it at the library and wait for it to be available.
As stated above, our journey is by no means complete. We have a long way to go! We are still trying to find ways to trim down. What is enlightening is that we are not any less happier than we were when we had all the trimmings. You should see the sense of achievement when we see the decrease in our water bill or when we score the latest DVD from the library.
What is also important is that we recognize that we want to live below our means, and that if we have a "nice-to-have" item, we will see how we can afford it and eventually pay for it in cash.
(Photo: Berkeley Marina, November 2004)
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