Preparing for less income

[mom0299]

There is a possiblity that DH and I will have a decrease in our income in the next few months. What should we be doing to get ready for less income? We've looked at our current budget and found several areas that we can cut. What else should we do?

 

[barkley]

see if you can save money by bundling services-

auto, home, life insurance with the same carrier (save us about 25% overall),
landline/internet service (bundled package saved $$$).

increase deductables on homeowners/auto (so long as you have enuf in a savings accnt to cover one of each).

see if you save money paying twice yearly vs monthly (on our auto insurance it saves $5 per month, kid's school tuition it saves 10% per year).

if you have regular perscriptions see if purchasing by mail order saves (with mine i pay one months co-pay for a 3 month supply using this service).

 

[belle&sebastiansmom]

First, we've really began to watch how much we eat out. We're striving for no more than twice a month. That has really saved a lot. Also, check your phone bill. I found that there were several services that I didn't need and was not using, so I cut them out and saved about $30 a month. Do the same for your cable. We also refinanced our vehicle for a much lower rate, which will save about $120 a month. And simply watch excess spending. DH starting going to buy the groceries because he would get only what was on the list. I, on the other hand, would buy plenty of goodies for the kids, that they didn't need.

Are there any consignment stores in your area? I've made a few extra bucks by consigning the clothes the kids have outgrown.

Good luck to your family.

 

[Nicolepa]

You should immediatly start living like you are already on your new, lower, income. That way you have time to see just how much needs to be cut and you will be saving money at the same time. Much easier to make the transition before the income loss than after.

 

[dvcgirl]

You should immediatly start living like you are already on your new, lower, income. That way you have time to see just how much needs to be cut and you will be saving money at the same time. Much easier to make the transition before the income loss than after.

This is exactly what I was going to say. Just start living that way now. Look into cutting anything that you can now. Use what you save over the next few months to build up your emergency fund before your income drops.....

 

[minnie1928]

I would only shop when necessary....in other words, no recreational shopping. It's amazing what you can save when you don't go shopping "just for something to do". I also agree that you should start living as if your income is at that level right now...if nothing else it will help you build a little savings cushion between now and then.

 

[scottishduffy]

My hubby and I are facing the same situation. I will go back to school full time effectively cutting out 50-60% of our income. Obviously our Disney trips will be *out*. No more of those until after I graduate. No more eating out, I am already starting to cook in bulk and have been teaching hubby how to cook for when I can't. Cutting back on little 'treats' from the grocery store. No more gourmet nights with cheese and hams. I am trying to cut money in small ways..... like putting my hair back to it's natural color for the duration of my schooling! That will save me ~$700 per year. We basically are starting to be very conscious of what we buy and watching costs now even though I won't quit my job until the end of July. Hubby has also become rather handy around the house as far as minor repairs go.

I have recently started to become a coupon queen. I never clipped coupons or watched for sales before but now I am religiously keeping track of such things. I figure I should start these habits now so I can learn how to work the whole system and already be in the habit once our income is cut. Best of luck to you!

 

[crisi]

If there is anything you can do to change your cash flow - i.e. if you can pay off a car loan you pay a few hundred a month on, that may be a good trade for having savings. Also, start looking for ways to bring in more income - everything from second jobs (first jobs if you are a SAHM) to providing services (dog walking) to having a garage sale.

 

[simonkodousek]

Get a bundle package from your cable company... that saves us ~$160/month. Don't shop for fun. Limit the amount of times you eat out per month. Those sorts of things really help...

 

[luvmy3]

use coupons!!!
I save so much, every week I go through the sale flyers and match my coupons to whats on sale, and I don't buy things I don't need. I buy in bulk only if it is a savings.
We don't eat out alot anymore, I cook all meals, and I do it on a budget.

Call your phone company and see if you can cut any services. We did and cut out over $20 a month, again doesn't sound like much but it does add up over a year. We do not have a cell phone contract and use pay as you go to save $$

Cancel magazine subscriptions, get a prorated refund if you've paid in advance.

Sell your stuff on ebay, or craigslist or garage sales.

For us it was really about not buying all the little things just because it was a good deal. I have cut out all that kind of spending and it really has made a difference.

 

[mom0299]

All of these suggestions are very good. Thanks to all of you. We are going to take money that we would normally put into savings and knock out some bills before our income is cut. We are cancelling a trip we had planned for this fall (it was an extra vacation that we don't need).
Keep the ideas coming.

 

[MiniGirl]

You should immediatly start living like you are already on your new, lower, income. That way you have time to see just how much needs to be cut and you will be saving money at the same time. Much easier to make the transition before the income loss than after.

If there is anything you can do to change your cash flow - i.e. if you can pay off a car loan you pay a few hundred a month on, that may be a good trade for having savings. Also, start looking for ways to bring in more income - everything from second jobs (first jobs if you are a SAHM) to providing services (dog walking) to having a garage sale.

These are the things I was going to say. Start living at the lower salary now and use the difference to pay off any debt you may have. Just remember to take the normal payment out of your new, lower budget. If you are uncomfortable with that, you can divide the difference up. You know -- half in savings and half to pay off debts.

This will also show you if any major changes are needed. My dh is an airline pilot and we have had MAJOR cuts in salary. We started living on less money when we saw the paycut writing on the wall. We didn't know how much it was going to be, so we just guessed. Anyway, this experiment showed us that we could have kept our home if we were willing to give up almost everything else. We didn't want to be married to a mortgage, so we sold the house and moved into a less expensive one. Also, we were able to do it before we HAD to, so we were able to wait for a better offer. (It was a different real estate market then, of course.) Anyway, the point to my rambling is that if you need to switch to a less expensive car (because of payments or insurance) or something even more drastic, you will be able to prepare for it and do so before it becomes necessary.

 

[MiniGirl]

Also, do you CVS? I have saved a lot of money by shopping there and combining the ECBs and coupons. We almost never pay for things like shampoo, toothpaste, etc, and I have even started buying bread and milk there because it has been a good way to use the ExtraCare Bucks (ECBs).

 

[teamagic]

Also, do you CVS? I have saved a lot of money by shopping there and combining the ECBs and coupons. We almost never pay for things like shampoo, toothpaste, etc, and I have even started buying bread and milk there because it has been a good way to use the ExtraCare Bucks (ECBs).

I second shopping at CVS. Last year(2007) I decided to get our finances in order. I started shopping with coupons and matching the local grocery stores sales with my coupons. I then tried CVS after reading about how much others have saved on here. OMG - I now wonder why I never shopped CVS before. I never pay full price for toileties - usually only $1.00 or less for a $20.00 order. I have gotten a stock pile of things. My sister in law has started to purchase things from me because she won't do the shopping and I get her the items she likes and she pays me less than half of what the stores charges. I make a little extra cash.

Good Luck with living on less income. At first it can be a challenge but it can be done.

 

[mom0299]

Also, do you CVS? I have saved a lot of money by shopping there and combining the ECBs and coupons. We almost never pay for things like shampoo, toothpaste, etc, and I have even started buying bread and milk there because it has been a good way to use the ExtraCare Bucks (ECBs).

I have seen a lot of people on this board save money at CVS, unfortunately, I do not have one near me.

We have been very aggressive lately as far as paying off credit cards and such. That is going to help us because we've almost got them taken care of.