Last year, I hit an employment snag. I went from two, steady, semi-well-paying jobs to none. We had just bought our house and were working on making improvements when the rug was pulled out from under us. A quick search of the Internet told me that this was a pretty common occurrence for a lot of people. I had lost both a contractor job that I'd had for 15 years and a teaching job I'd had for 4 years.
After some shock and a few choice words, we got our rears in gear & both started looking for freelance work (in addition to my wife's full-time day job)—me doing graphic design, and her doing freelance writing. I tightened our budget, started looking for ways to save on food & utilities and figured out that with a little work, most months we could subsist mostly on her paycheck alone. It wouldn't be pleasant, but we could do it.
Thankfully, I got two steady freelance clients that helped fill in the gaps fairly early on in the process, but I kept our budget as lean as I could.
Things we stopped doing:
- Going out to eat—we used to eat out once a week, but no longer had the means to do this, so I started cooking all our meals at home.
- Eating lunch out—Instead, I started making lunches for my wife to take to work. It was just too easy to get caught up in work and pop out for a little lunch somewhere. She was spending anywhere from $20-$50 a week on lunches ($80-$200 a month).
- Getting coffee at Starbucks / our local coffee klatsch. We'd been trying to spend less, but in stressful times, we'd hit the Starbucks several times a week, spending up to $200 a month on "treating ourselves."
- Making little trips to the grocery store. I started meal planning as a way to organize our food budget & realized the little trips to the grocery store were costing us more. I kept an eye on sales flyers and started using coupon & rebate apps.
- Buying the "expensive" toilet paper—seriously. We'd been buying the Scott Soft brand, always on sale, but still, when I looked at what we were spending money on, this was one of our top expenditures—about $34 a month (over $400 a year). We switched to Scott 1,000 brand from CostCo, and now we spend about $88 a year on toilet paper.
Things we started doing:
- Set up an automatic deposit to our savings account. Since my wife still has a steady income, we decided that $75 from each of her paychecks (approx. $150 / month) should go directly into savings. Over the course of a year, this act alone saved $1,950.
- Curbing our spending—as stated above we:
- Stopped eating out
- Ate only what was in the pantry for a couple of months, saving us money on groceries
- Stopped buying books, movies, & music and started taking advantage of Amazon Prime* offerings of streaming music & videos
- Started "shopping at home" for items, which helped us start to clear clutter (an unintended, but nice side effect).
- Started buying items we use a lot in bulk
- Using rewards cards, rebate apps, & coupons—The Target debit card alone saved us over $200 last year. Other grocery rewards cards saved us, on average, $40. Rebate and coupon apps saved us about $68.
- Doing more at home—from cooking to entertaining, we stayed home rather than going out.
- Putting half of my earnings into savings. Because I had tightened our budget and was working to reduce our food and utility bills, we could (for the most part) live on one income. Anything above that was "icing" as it were. Rather than spend the additional income, we used the money I earned for two things: Paying down debt and putting into savings.
- Having weekly budget meetings. This helped us check in (& connect to) our money. We reviewed what we spent money on that week and how we saved money. We also got to see our savings grow, which was rather exciting.
- Keeping track of ways to save money through this blog. I started this both as a way to keep myself accountable but also a way to keep track of the things I've tried.
Here's where we started:
When I lost both jobs, we were reliant on my wife's income, which amounted to just under $23K a year in take-home pay—about $1900 / month. At that point in time, we'd had $3,000 in savings but that quickly went away while I was trying to scrounge up work.
We had about $3,200 in bills / month at the start, After paying off some debt and paying off the balance of our car (which was mostly paid off already), that dropped to about $2,400 / month. (Note: we focussed on clearing this debt first because we knew it would free up our budget in the long run, so initially, any extra at the end of the month went to pay these expenses off. It took about 3 months to do that completely.)
By reducing our grocery spending and utility bills, our monthly expenditures dropped to about $2,200. (Once I pay off our credit cards, that will drop to about $1,800 a month—but we're still a couple of years away from that. Still, it's nice to think about.)
Within the first month, I was able to find a steady freelance client that paid me between $500-$1,200 a month. At the lowest level, this allowed us to pay all of our monthly bills.
My wife had a few freelance writing clients who she contacted regularly for work. They paid between $100-$300 a month, which helped buffer the budget.
When I found the second freelance client, I thought it would be a one-project job. I intended to put the money earned from that directly into savings. To my pleasure, it stretched out into a multi-project job and over a year later, they're still sending me work. The jobs I do for them range from $50-$500, and I never quite know when they'll pop up with work. I put half of these earnings directly into savings and the other half goes toward chipping away at our $10,000 in credit card debt.
Any additional client work gets funneled to areas of the budget that are most in need. Sometimes that means paying extra on credit cards, sometimes that means putting the money aside for home repairs or birthday presents.
We're still working on diversifying our income, but even that is no guarantee that it won't go away—which is why we're socking away whatever we can.
Where we'll go from here:
My wife will continue to set aside $75 from each paycheck, helping our savings to slowly grow another $1,950 over the next year.
I will continue to put half my earnings into savings, but now that we have over $8,000, it's time to look at higher yielding interest accounts. Right now we're earning a whopping 0.01% and we could be earning 1.0% if we moved the money to a different account. The difference is $80 vs. $8 a year.
I'm hoping by next year, we'll have $16,000 in savings and will be $5,000 lighter in credit card debt. But you never know what the Universe is going to throw at you.
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