Over Christmas my partner and I discovered we were expecting (e.g. expecting a baby)
After I picked the poor man up off the floor, we started worrying about how we would manage financially in the months ahead.
It is now several weeks later we’ve started our 7 month saving plan which will allow me to take 6 months minimum off work without too much suffering. However this experience has thus far demonstrated to me exactly how much money I was spending on naughty little luxuries.
Of all the things I loved to do of an afternoon, my favourite was to make a cheese plate, buy a bottle of wine and meet up with my girlfriends for a chin wag. Oh how I can no longer do that! No soft cheeses, no alcohol, minimal caffeine and after the past four weeks I have saved over $100 in my grocery budget.
Your spending should naturally drop
Instead of my $15 bottle of wine I am buying a $1 bottle of lemonade. Instead of my $15 cheese plate I take a $3 dip and a box of $2 crackers. Instead of a $4 coffee every morning I make an instant decaf coffee at home and drink it on my way to work. I don’t buy extravagant breakfasts on the weekend as I used to, the most I can handle is dry toast and water before 10am anyway. So I treat myself to a $20 foot massage once a fortnight, and even with that small luxury I’m still spending less than I used to on brunch with my friends.
Substituting is the key to saving
The key point for me during this time is that by simply substituting a few items in my regular routine I could stand to save thousands of dollars over the course of a year. Have a think about what activities you participate in where you could make a substitute to make a saving. For example; buying generic products instead of name brand; choosing water with a dash of cordial instead of juice; going for a walk instead of going to the gym; using takeaway food containers to store left overs instead of Tupperware; taking public transport instead of driving.
The concern of living on only 1 salary
In seven months we will be living on 1 ½ salaries for 6 – 12 mths and that has also struck us with fear. As such we have started a savings account and are putting $200 a fortnight into it as a contingency to help us through the months following birth. I thought initially that finding $200 a fortnight would be difficult, but there are two principles that have made this an easier task for me; firstly, the $200 comes direct out of my pay, before any bills are paid, before I whittle it away on something silly, I save for our baby first.
Secondly, by using the substitution principle in my daily activities I have found the additional $200 a fortnight in my existing budget. This contingency fund is also invested in a high interest online savings account at 5% pa, so at the end of 7 months we should be looking at over $3000 of savings to be used in case of emergencies. If (touchwood) we don’t require these funds it’s also pretty good start to an education fund for the little one, yet another successful substitution!