Note: The following is a guest post from Trisha Wagner from Destroy Debt.
Some people are frugal by nature, others become frugal due to circumstance. I have recently learned that I fall on the wavering line between the two. 2008 brought a lot of changes to many families; the recession wreaked havoc on the economy, people have lost both homes and jobs and sound financial planning is finally in the forefront of many peoples’ minds. All things considered I think the last year served as a much needed wake up call for people who have forgotten the importance of living within (or below) their means. What happens if your family goes from having duel incomes to having a single income? The following tips can help you survive the transition.
Start a home based business. You may never have considered working from home or perhaps you always dreamed of working from home- either way if you have recently been forced to make the adjustment to living on one income there is no better time than the present to follow your dream. Contrary to popular belief there are many home based businesses that require minimal start up cost and there are also freelance opportunities that may have no overhead cost. You may not match the income lost when you start out, but every little bit helps.
Get back to basics. One lesson that many people are learning is this: we as a society have been living way beyond our means for decades. Over-consuming, over-spending, over-borrowing have all contributed to the current state of the economy. Talk to your parents or grandparents or anyone who grew up years ago when “things” were not so plentiful. You may find living simpler is not just cheaper but also more rewarding in other ways for your family.
Create a budget. If you already have a budget in place, you will want to revise it reflecting not only the change in income but also the change in expenses. Working outside the home costs money. Most people have little habits that they are not even aware of that cost them money each day. I can speak from experience having recently left my full time job to work at home full time. I was fortunate enough to make that decision on my own versus losing my job however I was still concerned that I was making the right choice during a bad economy. It turns out by not leaving the house to go to work I save at least $10 per day that I usually spent on odds and ends like bottled water, snacks, lunch etc. In addition my son goes to daycare two days versus five days; overall I am saving $400 per month by not working….outside the home. Obviously this will vary by family but there is a good chance you may find relief in a new budget when you consider you may be spending less money.
Cut costs. After you have revised your budget to include your current costs and expenses, see what you can cut to save money. Examine closely what you are spending money on and determine if they are “needs” or “wants.” There are plenty of things that we get used to having but do not have to have to survive. If times are tough, get rid of the wants to focus on the needs.