I do a budget at the beginning of every month. I take my take-home pay (after taxes) and subtract my mortgage, average utilities (power, gas and cable/internet), automatic savings (Roth IRA and high interest savings account), average gas and grocery use, any special month expenses (wedding gifts, extra property tax payments, doctors, hair, travel, ect) and then allocate the remaining to categories for fun, like entertainment, shopping, and eating out. Some months I feel super rich, other months (like in the midst of wedding season), I feel like I have absolutely no money.
I am very lucky in that in my 3+ years of full-time working, I have only had to unexpectedly dip into my savings once, and it was this past winter for unexpected car issues. Luckily, I have extra sources of income through babysitting, ticket sales, and my pool management job this summer that supplement my take-home pay. That definitely helps during wedding season!
That all being said, I also am very smart with my money. I'm very comfortable with what I make (for the most part) and usually wait until the end of each month once I know how my spending is before I buy myself any "treats," like clothes, stuff for my condo or registering for races (those are expensive!). I am a firm believer in living efficiently- i.e. not wasting money for unnecessary reasons. I think it is silly how much people spend on day to day living and so much of it is wasteful. Spending more money does not lead to more happiness! I actually feel better when I know I have spent minimal money each month.
Living efficiently involves making small changes throughout each day. I am not perfect and could learn to cut in many areas, but I have a few where I succeed.
I believe in...
- Making errands not a separate trip but an added few stops here and there when I am already out so as to minimize gas use and time;
- Killing time between activities at a coffee shop or library so I don't have to make multiple trips;
- Not belonging to a gym and instead buying weights to have at home and getting outside or joining a sport for my exercise;
- Walking with friends instead of going out for food or drinks;
- Walking to the grocery store when I only need a few things;
- Keeping my house at a more moderate temperature during the cold/hot months;
- Living in a smaller space so I do not accumulate extra "stuff" I don't need (and so I can clean less!);
- Not having DVR or multiple TV's with cable (thank you, internet!);
- Pre-paid phone plans so I only pay for what I use (and NO smartphones!);
- Paying in cash for a car (and never having a car payment) and only buying ones that are gas and cost efficient (cars are not for show);
- Waiting for movies to come to Redbox as opposed to going to the theaters (or at least a discount theater);
- Buying what is on sale at the grocery story;
- Cooking more meals (it is ok to just hang with friends w/o food);
- Not buying soda, bottled water and/or anything that is not alcohol. Water please!;
- Buying all items off-brand;
- Not being afraid on a day when nothing is going on to spend time by myself reading or watching TV (as opposed to spending time by spending money);
- CHARGING all my spending to earn travel rewards and, in turn FREE MONEY;
- Using my extra money for EXPERIENCES and not THINGS.
What do you do to live efficiently?