Give Yourself a Raise By Being Frugal

by heather

With September finally over with I sat down yesterday, as usual, to track our September spending. I’ve been tracking our spending only for a few months now, and it’s been an enlightening experience to say the least. If any of you have read my recent post “How To Save Money By Tracking Your Spending“, then you know that the first time I tallied our expenses I almost keeled over when I found out how much we were spending on food each month. That shocking experience is one I won’t forget anytime soon.

Well, I talled up our expenses yesterday (which I always do on the first of the month now) and had an interesting revelation.

I’d been able to cut our food budget by 33% from the month before.

Now, we’re still spending more than I’d like on food and eating out, but I’m trying not to be too hard on us. Rome wasn’t built in a day, and 33% is pretty good, I think. We’re slowly getting better.

But, it opened up an interesting thought. With just a little bit of foresight and attention, we basically got a raise just by being frugal.

How We Got Our “Raise”

Once I realized this, I added up everything else and compared it to the month before. By making small cuts and adjustments here and there, we’d “earned” an extra $500 from the previous month. Just by being frugal and budgeting smartly.

And we didn’t do anything major. All it amounted to was simply paying attention to where our money was going.

Because our biggest expenditure (and biggest weakness) is food and eating out, that’s where the majority of our savings came from. But we also trimmed back on going to our local coffee shop, and I cut back on hitting the thrift stores and consignment shops for clothing.

What I wanted to address, however, is what a difference being frugal really can make in your life.

How Much Money We REALLY Saved

Here’s how it breaks down: we’re currently putting $300 per month into savings to build our emergency fund. Every 12 months, this adds up to $3,600. Not too bad, right?

But, just last month I was able to save us an additional $500 (which I put right into our emergency fund). Now, assuming I can keep up that pace every month, that $500 will add up to $6,000 in 12 months.

This now means that we’re able to save $800 per month, or a whopping $9600 per year. Just by being frugal. That’s an increase of 37%.

That’s quite a raise.

Almost everyone, I’m convinced, has expenses they can pare down to give themselves a raise. It could be doing small things like avoiding the mall, not grocery shopping when you’re hungry, packing your lunch to work, or making your own coffee instead of hitting your local brewery.

Or, it could involve slightly bigger things like starting to carpool with someone you work with, making your home more energy efficient, or turning down your thermostat a few degrees this winter.

My point is that if you need a raise, you have to ask your boss for it. And with the way the economy is right now, that’s going to be a tough sell. But, you can give yourself a much higher raise simply by looking at your spending and making some conscious choices about what you really need, and what you don’t.

Case in point: it’s much harder for me to earn an extra $500 per month by going out and looking for work. But, I got an extra $500 per month just by trimming fat off our expenses.

Frugal living doesn’t have to mean “going without” or living miserably. It simply means that you’re paying attention to your personal finances and making conscious choices about what you’re doing.  You’re living proactive instead of reactive.

If you make a commitment to do one thing every day, even if it’s tiny, it’s going to add up over time. After all, one little grain of sand doesn’t seem like much, but when you put them together they sure do make a beautiful beach.

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