Tuesday, February 3, 2009

When the recession starts getting real

Yes this sounds like a bad Real World intro but right now the reality checks are coming in.

I watch the TODAY show every morning and sometimes, it just depresses me, hearing nothing but bad news about the economy, housing prices, layoffs, etc. I watch the segments and find a few interesting tidbits, but thought none of it would actually come close to me.

That is until my one of my best friends (who is also my first Chicago friend) was laid off last week. The news spread with the start of the phone call, letting us know the news and followed with a sense of total shock among my close-knit friends.

I was shocked that something like this could happen to a close friend of mine, and it immediately got me thinking about my situation. 

I'm a single-income woman in the city, fortunately with some money in savings, but no real back-up plan in case something awful happens. Suze Orman says men and women should have enough money in savings to pay their bills for six months in case we get laid off. Yeah in the city that is a lot of money.

To put more money in savings, I've started trimming back on my spending, or at least really trying to. So here is how I'm trying to stretch my dollar a little more:
  • Weekend budgets. I take out a certain amount of money on Friday and it has to cover me until Sunday, or until the money runs out to avoid going too crazy at the bar
  • Grocery shopping. I buy items that I can freeze and prepare for the week. I cook Sunday nights and reheat for the week. Yes it's not ideal but it keeps me from buying dinner every night
  • Cut back on lunches out. I'm not about eliminating all treats, but I brown bag it just about every day. Keeps down the office snacking too
  • Downgrade my Netflix account. I can barely get through the movies I get in the mail now, so I'll save some money here
So those are my ways to stretch some dollars right now. It's not a lot, but every little bit helps.

Is anyone else cutting back in "fun spending?" If so, where are you making adjustments in your budget? Or where is the one place you really don't want to cut back?

52 comments:

Rebecka said...

We've eliminated going out to dinner every Saturday night.

We don't buy something if we don't need it.

I don't go on shopping sprees like i used to.

A Super Girl said...

I love your idea of cooking for the week. Less for the money-saving and more for the convenience!

I'm the same about my Netflix, but I feel like it's such a nominal amount I keep talking myself out of cutting the plan back. Besides, when I get really hooked on a TV show on DVD, I need as many DVDs as I can handle :-)

I don't have specific ways I'm cutting back. Luckily I've got enough in savings to cover me for awhile, and I have the (unpleasant and only to be used in emergencies) option of moving back to my parents if I had to. Even with all that, it's a scary time out there.

V said...

Just found your blog, and love it. I've cut back on shopping...it's hard and I don't want to, but it's necessary. Also, my weekly trip to Target (which would go under shopping), but I look to this as my therapy is eliminated. I've also been cooking more vs. going out. We also go buy wine, beer, and liquor and have drinks at home or friends places instead of going to the bar...no fun!

Maris said...

I check my bank account daily - it gives me a much needed reality check! I also limit myself to one grocery trip per week - I waste a LOT of money going a few times per week for one thing and leaving $45 later.

Mandy said...

I dont spend like I used to. Now instead of some friends and I going out to dinner and a movie, we only do one or the other and if its a movie we try to go to the early show because they are less expensive. I brown bag it most days and take a book instead of going to Target or other shopping on my lunch hour. I quit stopping for coffee a time or two a week in the mornings before work, now its a special treat. I cook instead of going out to eat for dinner. Its amazing how much you can save just by cutting back on little things.

Blaez said...

we're cutting back on the groceries. cheaper and more health conscious items. and less splurging.

if i had to i can cut back on the cell and cable bills but don't really want to. i like the freedom of the plans i have and don't want to skimp on those.

Sweet Nothings said...

ugh, let me tell you I know what you mean..my salary was just cut 30%...and I am finally feeling it too.

my weekly trip to target is the first to goooo :(

Hi! I'm Erin said...

We've always been fairly frugal. We don't eat out very often, I take my lunch 99% of the time, I make a weekly menu and a grocery list that only includes the things needed to accomplish that menu. I don't purchase coffee or afternoon snacks. We don't really have any local friends so we don't have to worry about spending money going out all the time on weekends. My husband does work for one of the theater companies in the city so we get theater tickets for free. I haven't bought any clothes in a while because I haven't seen anything I really wanted. Overall, we're pretty boring. I would say that the one place we could cut back if we wanted to was cancel our Tivo payments of $12 a month and cut back on our cable tv bill (which we've been talking about doing anyway because I hate Comcast). So, yeah, we're doing okay right now.

Lil' Woman said...

ME & Big Mans fun spending has come to a drastic halt..esp. now with 2 jobs. :(

Angela said...

My dad was laid off at the end of the summer. It's tough.

Good luck!

CC said...

I've definitely cut back on excess spending. Not having a job has seen to that! It is really hard though since I just moved here, I really want to experience the city, but it's hard when I have no money!

I'm sorry for your friend. I'll keep her in my thoughts.

Maki said...

It's happening every where, it's really scary. My hubby got laid off in December as you already know and still no luck on finding the new job. My bro-in-law got laid off before my husband, but he just started the new job (thank god!)..

We are pretty much cooking every night to save $$$ where we used to eat out 3 - 4 nights a week before hubby losing the job. It sucks, but that's something that has to be done..

But we try not to change the lifestyle that we've had because I don't want my children to feel it. We still rent movies on demand every weekend and watch it with kids, etc.

I'm just hoping that things will get better soon, not worse.

Classy in Philadelphia said...

I brown bag it everyday! Sometimes I'm jealous of my friends who buy delicious looking meals for lunch, but I remind myself of how much money I'm saving, so I'm doing well!

Kate said...

I haven't really cut back because I've always been cheap (let's not sugarcoat it, OK?). But I've found the littlest things make the biggest difference--especially when it comes to food. All breakfasts and lunches come from the grocery store. We'll eat dinner out about once or twice a week, but usually on the cheap (I've found plenty of cheap places in Chicago, if you're interested). I've found making most of my own meals to be healthier, too. I love books and magazines so I haven't cut back in terms of quantity, but I almost never buy books from large retailers and all my magazines are subscriptions because they're waaaay cheaper than news stand issues. As far as savings, I have a certain amount taken out of one account every month and put into an ING Direct account. The interest rate is pretty high (for today's standard, anyway) and I never touch the money. This year I made over $500 in interest on the money in that account--just about enough to pay our tax guy.

The Modern Gal said...

Good ideas. I've had several friends get laid off in my business, which is having one of the rougher times. I'm just waiting for my turn. I've been saving up for a while, but I'm trying to cut back too -- and downgrading Netflix was one of the first things I did.

Mandy said...

I'm in a different situation to those people who have lost their jobs or who fear losing them. I've been living without a job for about 8 months, after moving here to the States on savings. But the economy is limiting the jobs available now that I'm looking for one! And the savings aren't going to last forever.

Your question inspired me to post on my blog - Taken By A Nursery Rhyme

SA said...

I think you have a good plan. For me I'm not eating anything from a restaurant or fast food place. I'm using coupons so much more and actually shopping at different places for a good value instead of just going into one store and buying all that I need. I've stopped my hair product junkie ways and going to start making my stuff for my hair. And I'm seriously thinking about canceling cable. Almost every show you want to watch is streamed from the network's site or on hulu and if it's not there then you can most likely download it. And no tickets to sporting events, which is a big sad for me. :( But the $60 on a ticket to one game goes to food or gas or bills so...

wontletlifedefineme said...

Well, I really don't have that much money as I'm still a student, and making ends meet has been difficult for a while, but I just try and avoid buying things that are unnecessary, or when I want to go out shopping I just stay indoors with a book instead. I'm not cutting back on dance practice and yoga though. I think exercise is too important to cut back on, even if it means taking money out of my savings account to pay for classes.

Jules said...

We've cut back A LOT! My job is secure - I'm a teacher with tenure. But Hubby is in sales...so every week there are people being laid off. I can't even remember the last time we ate out - Mr. Crock Pot and I have become close friends (since I can't really cook and all). And Family Video (where movie rentals are dirt cheap) plus the library have become staples for us on the weekend.
The first month of this new budget STUNK but now we're both feeling really good when we find new ways to save money.

Fabulously Broke said...

I'm pretty boring as is, so we only eat out once a month anyway, cook at home (although groceries run about $350/per person or $700/household), and I spend on jewellery on Etsy lol

Fabulously Broke in the City

"Just a girl trying to find a balance between being a Shopaholic and a Saver."

Deutlich said...

I know a bunch of folks who've been laid off too

It's scary as hell.

SoMi's Nilsa said...

We started cutting back on spending last summer. After we moved into our new condo. And realized how much we'd be shelling out for our monthly mortgage. We rarely eat out anymore and have severely cut back on ordering take-out. We are not planning any big trips this year (despite being offered free airline tix to Europe or South America). And instead of going on a shopping spree with our wedding money, we are being more particular about the purchases we make.

I think when we come out of this ... on the other side ... we will all be a little smarter about how we spend our money. Not such a bad lesson, though learning it can be difficult. Sorry to hear about your friend. I have friends in the same boat.

thewriterbabeseries.com said...

If it's not free or severely discounted, I don't even bother. I've always been frugal where it counts the most, but I guess cutting back on spending is such a phenomenon now b/c our standard of living was much higher than it has been (or should have been).

Ray said...

We have a very strict "entertainment" budget which is a monthly number. We have to plan around activities and on nights where we aren't with friends we stay in and make dinner rather than go out.

It sucks sometimes...but we also tend to make our own fun with movies, games, etc. I think in the long run, saving as much money as we do is more important than extravagant weekends. :)

chitowndebutante said...

i stopped my daily starbucks trips partially to save money and partially to cut back on caffeine.

and it's not so bad.

i've also stopped shopping as frequently so when i do go it's more of a treat.

Andrea said...

I watch the Today show everyday also and I know what you mean about the depressing topics they report about. Sure, all of the segments they report on about the economy and the job market and such are all true, but sometimes I have to change the channel because it's such a sad way to start my day :) I recommend brown bagging it. It works for me.

David Dotson said...

It seems like we are all cutting back on something(s). I stopped eating out so much, and have developed a brown-bagging habit, too. I've also been trying to kick my iTunes habit by downloading informational podcasts instead of music. Additionally, I've been jobhunting like a mofo. I like posts like this; since it is a subject that hits home for almost everyone, it gets everyone talking.

theoddduckling said...

Considering the facts that I'm still in college and that I am renting a house with a friend come this July (hopefully), I've been cutting back on "fun spending" for a while now. Also buying groceries in bulk whenever possible and rarely eating out.

thatShortChick said...

although I am a college student, living at home with my parents (and virtually bills-free) I have cut back on some unneccessary spending such as reducing my trips to Target and eating more leftovers.

S. said...

Ummm...I'm going to Vegas this weekend...I'll just stick to drinking and forego the gambling.

Maybe.

Katelin said...

i just canceled matt's gym membership and paused mine for a couple months, that will definitely come in handy. we've also been using the rents to do our laundry and save us some quarters, haha.

Lily said...

I love to cook, so one of my big weaknesses is grocery shopping. I'm trying to trim a little here by making better lists, planning meals, and only shopping twice/month (rather than running out and buying something everytime I have an idea for a new meal).

I've also got a big weakness for hair cuts and colors and change mine frequently. I'm spacing my time out more and accomplishing a few goals with this - saving money, growing my hair out, and I'm going to pick an all-over color next time instead of blue streaks or something else random that will grow out nicely.

I like your weekend spending plan though - that really gets me!

Coconut said...

I'm doing Oprah's Debt Diet - it's my New Year's Resolution - but I'm haiving a hard time with not buying coffee in the morning!

SarahBeth said...

I too cook on Sunday for the week for both me and my boyfriend, which saves us from buying lunches and/or dinners all week. I also suspended my monthly IRA contribution to avoid going into tuition debt (I know this is a bad idea, I plan on starting back up again in June). And the most sad sacrifice has been going back to my natural brown hair color... I loved being a blonde! But this should save some serious cash...

Miss Marie said...

Those are some great tips! We do the same thing for the weekends! Take out cash and then only use that. It helps keep us from racking up huge bar tabs LOL

Miss Grace said...

I downgraded my cell phone plan, I make a conscious choice to drive less, and I try to get all of my retail highs at thrift stores and target.

Miss Grace said...

Oh and the library. I started going to the library again.

Athena Valentine said...

I am practicing C.A.S.H ( CLothes Accessories Shoes Hiatus)I'm trying not to buy anything of this sort until March when I have a wedding to attend. I also have started keeping a budget and write in a finance blog to start holding myself accountable. :)

Megkathleen said...

I've stopped going out to dinner as much. I also stopped with the crazy expensive haircuts and only buy clothes that are on sale. I think it's good to be prepared and aware of what's going on - I've seen too many people get blindsided when they're laid off and I just want to ask them if they've been living under a rock for the last year.

Jen K said...

I hear you with the whole cutting back thing. I've definitely been trying, and I like to think I've done pretty well. Trying to keep the eating out to a minimum, and random shopping trips out. It just SUCKS that eating healthy isn't the cheapest option.
I have also been listening to Suze Orman and it would probably take me 15 years to save up a 6 month reserve...

CC said...

thanks for the encouraging words! :)

Lauren said...

I think that six months is tough. And you are right, in this city, that is alot! Your plans sound great, though.

We are cutting back, too, and have been since October. I have friends over to the condo more for cocktails and wine instead of meeting at the bar and we only eat out once or twice a week (which is a big difference from the six days a week it used to be). Ended up being a good thing as work is having troubles and I've been as much as 7 weeks and 6 days behind! Now I'm just owed a month of backpay. But because of our savings we were okay.

PunkyBean said...

I'm being laid off in May, so we're hardly spending any money.

I'm selling my dream car that was an awesome deal and 0% financing. My dad is giving me his old junker to drive until I go back to work.

We're already a pretty cheap little family (I only buy clearance merchandise, didn't eat out a lot anyway, hardly go out, etc.)

Good luck - sounds like you've got a great plan and will be okay!

lifeintheleftlane said...

I've definitely cut back on random clothing and shoe shopping. I'm also trying to go out less, whether it's to dinner or to a bar, but that doesn't always work too well!

All in all, I'm trying to make wiser choices, but not stop spending completely. If we all do that, the economy will never recover! =)

Jules @ Money Feuds said...

Sorry about your friend's job! That is scary and a tough deal...

About your saving strategies. Way to go! That is great that you being proactive. Little changes do add up.

Underoo Elf said...

I actually have two checking accounts - one for bills, one for fun/daily expenses (coffee, lunch, shopping) - and have my paycheck direct deposited, split 80/20. When the money runs out in the fun account, I have to wait until the next payday since I can't transfer money between accounts (two different banks). It's really been helpful for me to curtail spending, as has using Mint to see where the money goes.

Kyla Bea said...

I've found that meal planning is one of the best things out there. It means I can buy the groceries all at once instead of buying constantly through the week, and helps prevent me from getting take out too often.

That and I do what you do for the weekend all week so my spending on lunches & after dinner drinks all comes out of the same pot. Variable spending is just that, variable.

ay said...

I'll start by saying I have no connection to mint.com. I HIGHLY RECOMMEND it to anyone out there struggling to stick to a budget. It's free. Easier than microsoft money. Shows cute graphs of where your money is going. Alerts you if you are over budget in a category. Can be depressing to see what money you don't have but it's a great snapshot of where you are and tracks where you've been so you can get where you want to be. Check it out. And hang in there. It's only money. Life is soooo much more than that.

jenniferalaine said...

You could forget to take your debit card out of the ATM after depositing a check. Because that's what I did today and so far it's working...

Vanessa said...

I am overall very mindful of my spending. I watch my grocery budget and eat smaller portions to try and stretch meals. I really watch my thermostat since getting my last electric bill of $400.

dolcechic said...

Honestly reading The Secret, and focusing on I'll have the money regardless has really helped. I no longer worry about being in debt, and knock on wood...I actually have more money than I did in the past.

DebtConsultant said...

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