economical in use or expenditure; prudently saving or sparing; not wasteful: a frugal manager.
entailing little expense; requiring few resources; meager; scanty: a frugal meal.
I have been thinking quite a bit lately about frugality. I know that I am not alone. The news media has been doing a great job sensationalizing the state of our economy and striking fear into the hearts of many. I, personally, do not listen too close to the news. It's not that I am burying my head in the sand, hoping that by ignoring everything around me that I won't be affected by the state of the economy. But, you have to realized that it is the media's job to get us upset about the news. That's what keeps you paying attention to them and, in turn, making them money. The media will take the facts and play them out to the worst possible scenarios because we are putty in their hands if we are fearful of what will happen next.
But what is fear? It has been said that fear is the opposite of faith. I tend to agree with this because if I am trusting in the Lord, who is the all-powerful creator of the universe, what do I have to fear? He promises to never leave or forsake us. (Deuteronomy 31:6, Deuteronomy 31:8, Joshua 1:5, 1 Kings 8:57, Hebrews 13:5) Because I believe this with all my heart, I tend to listen to the news with only half an ear. I need to base my decisions on what God directs me to do not on what the media says.
With that being said, though, I have been looking at our personal finances with concern. Due to having a growing family, our expenses have a tendency to grow faster than our income. I think that there are many families out there who can relate to this completely. When your budget becomes unbalanced and your outgoing expenses are more than your incoming income, there are only two things you can do: Increase your income and/or decrease your expenses. Let's take a look at these options.
Are there any ways to easily increase your income?
Here are some ideas:
Ask for a raise. Depending on your job situation you may need to discuss the possibility of a raise with your boss. Some jobs have an automatic yearly review and usually that includes a raise if your performance warrants this. Many jobs, however, don't do this. My husband realized that he had not been giving much of a raise since he started his position at his job although his responsibilities had increased substantially. He did a bit of research to find out what the average income was for someone in his field with similar responsibilities and discovered he was underpaid in comparison. It took a bit of nerve and a lot of prayer, but he approached his boss and addressed this. It paid off and he got a nice increase which we were very thankful for.
Prayerfully consider if this is a step you should take. It is something that needs to be done carefully because you really don't want to alienate yourself from your superiors at work. I also want to caution you against an attitude of bitterness in your job. If you really believe that you are being underpaid and your boss does not agree, you have two choices. You can seek employment elsewhere, or you can decide that your current position is still your best option. Then you need to be thankful for the job opportunity that the Lord has given you. Do not allow bitterness to enter your heart. It does no good, but instead eats away at you and makes your life miserable. I even have had coworkers that have allowed this attitude to cause them to make very foolish decisions that ultimately cost them their job.
Work harder. Some jobs allow you some flexibility in your hours and the option of working overtime. If this is the case for you or your spouse, consider putting in a few extra hours each week. Another consideration if you work on commission is to work a bit harder or longer hours to increase sales and therefore income. It is important to keep in mind how being away longer hours affects the rest of your family and how your household functions. This may not be a wise option if it puts too much of a strain on family life. The family needs to come first.
Increase prices. If you own your own business and finances are tight, it may mean that it is time to review expenses and decide to raise your prices. Our family just recently addressed this. We own rental properties and had not increased rent for three years. After looking at expenses and the market rate for similar apartments, we decided that a rent increase was warranted. No one has scoffed at it and moved out because we are still very competitive in our area.
Declutter and sell your stuff. Look around your house. I bet you can find a few things that you no longer use or need that someone else would value enough to pay for. Sell them. If you live in the right area, have a garage sale. Market it well and you can make a nice sum of money for just a few days work. Another option is online auctions like eBay. Before listing, do a search to see if others have sold similar items and if people are bidding on them. Then you will have an idea of where to set your starting bid and what you can expect to sell it for.
Start you own business. Nearly everyone has a skill that could be used by someone else. Are you crafty and can make items to sell? Do you have a service you could offer to others? Brainstorm ideas. What are you good at? Look at your personal strengths and your passions and see how these could be used as a marketable product. Keep in mind that starting any type of new business takes work and it takes time before they become very profitable. Once again, you need to consider how this will affect your family. There is much info available on the internet and at your local library concerning starting a business.
Consider the second parent taking on a job outside the home. I saved this one for last because from my own experience, it was not a good thing for our family. Trust me, I know how hard it is these days to survive on one income. That being said, I think that much consideration should be giving before deciding that a second parent should take on a job outside the home. If you have children, they have to be your priority. You have to consider how working will affect them. Unless all of your children are in school full time and you can find a part-time job that fits into those hours, having mom take on a job means that the children will have to be in the care of others for at least part of the day. It is important to consider how your expenses will increase. Taking on a job probably means having the additional expenses of:
- needing to dress better and spend more money on your appearance
- transportation expenses such as more money for gas and additional wear and tear on your car
- conveniences such as dinners out or carried in because there was no time or energy to cook
When you calculate these additional expenses, how much money are you actually making? I did the working mom thing for the first 6 months of my oldest daughter's life. Besides nearly costing me my sanity, we had a lot of additional expenses that we could eliminate when I quit my job. About this time I discovered the Tightwad Gazette. In it, the author, Amy Dacyczyn, discussed her decision to quit her lucrative job as a graphic designer and take on a frugal lifestyle instead. She very carefully calculated how much she made versus her additional expenses due to the fact that she was working. She figured that she was barely earning over $1.00 per hour after expenses.
I am not here to be judgemental of working moms. Oh my, no! I know how hard it is to be one and know that I do not have what it takes to do it successfully. I just want those of you out there considering this as an option to count the costs involved - ALL the costs. This includes the cost to family life. In my case, I was doing the working mom thing while my hubby was a traveling salesman and was gone most of the week. I was truly in the role of the single mom during he week. I nearly had a nervous breakdown. My heart goes out to those of you who are forced into this situation. This is not an easy thing to do.
After saying all that and being somewhat negative about a second parent (most likely mom) taking on a job, I know there are family situations and job situations that make this a very viable solution to helping out the family budget. A very good friend of mine fell into a job working as a teacher's aid at her daughter's preschool during the very same hours that her daughter attends. It is an ideal situation for her to help out the family budget without putting a big strain on family life. Prayerfully consider your options in this area. You never know, God may surprise you.
Now let's brainstorm a few ideas as to how to decrease expenses. This is probably easier to do than increasing income.
First, list expenses. Make a list of everything you spend money on and don't leave anything out. Depending on how you normally keep track of your money, this can be pretty simply or really difficult. Use a basic budget sheet such as this one, to help you remember to include everything you money goes to.
Define "wants" vs. "needs." This is an area that may be difficult and an area that may cause some disagreements in your household. Look at all the items you listed. Are there any of these that you could do without. One area that we have discussed quite a bit in our home has been cable television. I believe it is a want. Many in my family have trouble with that. Oh, they realize it is a want, it is just that they really want it. We decided to keep it (at least for now), but go a cheaper route. This saved us $65 each month. Another area that can get quite expensive is cell phones. Analyze your plan and see if you can cut back to a cheaper one or even give up the cell phones. Another alternative that many are choosing is to give up their land line phone and just use cell phones. This eliminates an entire bill each month.
Note discretionary spending. The next thing to do is to note which things in your budget that could be considered discretionary spending. What does this mean? Well, some things in your budget are fixed expenses like monthly rent or your mortgage payment. They do not vary month to month and you can't change them. Other things in your budget have some play. These would be things like how much you spend on groceries, eating out, clothing, or even Starbucks. These are not areas of spending that you can necessarily eliminate, but you may be able to cut back in considerably. This is also where looking at "wants" versus "needs" is really important. Do you really need to stop at Starbucks or could a regular coffee from home suffice? Do you need all the clothes that you purchase or could you cut back or even buy them used from garage sales and resale shops? Do you need to eat out? Cooking at home is much cheaper. Can you cut back on groceries by buying fewer convenience foods or cheaper cuts of meat? Each of these questions is a whole discussion in itself.
Perhaps this has given you some food for thought. I hope to continue the discussions on frugality by having future posts about how to cut expenses is several of these discretionary areas. These are things that I have been looking very hard at lately in our household. Pinching pennies has become a new hobby of mine and I have been learning a lot which I would love to share.
Have a great day and spend it wisely!