Monday, 15 April 2013

Surviving until pay-day: When things get tight

This post will cover my observations about how far you can go when you have busted through your budget and have very little cash until the next payday.

I confess that I never really thought I would be writing a post like this.  I am one of those people that is insane about keeping a minimum amount in my transaction account (anything less than $500 and I start to panic) and I have been lucky enough to have had a well paying job and low expenditures my whole life.  In the last month however my expenditures got out of control, my credit card bill was huge and I moved out of home - see full details in my March 2013 expenditure tracker.

Now, normally what I would do would be to transfer some funds back from my home loan offset account to cover me until pay day.  However, after paying my credit card bill last month, which took most of my wage and not being able to save a single dollar, I committed to not over-spending this month.  To this effect I said that I would not transfer funds from my offset account to my transaction account.  I could spend as much as I wanted to on my credit card however I was also trying to limit that.

At the end of March 2013, I had ~$315 in my transaction account which had to last me until the 15th of April.  Now this wouldn't be that big a problem, except I had committed to going out nearly every day of that fortnight and I hated the fact that I would have to cancel anything for financial reasons.  Those who are good savers out there are probably shaking their heads however I'm sure there are plenty of people who know the feeling.

I am proud to say that I got through the fortnight on that amount of cash.  At payday (today) I have $30 left in my transaction account

Here are some of the techniques I used to conserve cash while trying to get to the end of the fortnight and still maintaining a full social life.

  • Deferred some non essential expenditures
    • In a recent post I wrote about how I could upgrade my phone and save money however it would require buying the phone outright
    • As I wrote that post I was about to purchase the phone (albeit on my credit card) however in light of the above I decided to continue using my old phone and just get the cheaper SIM card until my expenditures come under control
  • I went hunting for coins
    • This may sound silly, but if you are like me and HATE coins you may be surprised how much you have lying around your house and office
    • I am addicted to my morning coffee and although I could have cut this out for the two weeks, I figured that if I could fund this from coins I found lying around the house then I was effectively not spending on it
    • I found ~$100 in coins around my house.  These were in trousers, drawers, jars and (oddly enough) shoes
    • In the end the coins also paid for a few times when I forgot to take lunch
  • I ate at cheaper places when catching up with friends
    • This can actually be done quite subtly if you have arranged to catch up but have not organised a location for a lunch or dinner
    • Instead of going to a steak restaurant which is going to probably cost $40+ for a meal with a wine I went to cheaper Chinese places - just as much fun, just as tasty but for a fraction of the cost
  • I used the credit card too much
    • This was an interesting experience actually.  I never really understood how people managed to rack up so much credit card debt and then had trouble paying it back
    • When I no longer had cash to spend but still wanted to spend I found myself putting everything on my credit card, from dinners and drinks to presents and various other expenditures
    • I can see how easy it would be to get into serious debt if you were living month to month and this month's wage constantly went to pay last months credit card bill
  • I saved the cash for days when I had to split bills
    • Whenever you go out in a group, splitting the bill is almost always a cash transaction (i.e. credit card is not really an option)
    • This was particularly challenging towards the end of the fortnight when I had a few group dinners and I knew that I had to conserve my cash for these events
Before anyone says it - I know that
 a) I had quite a bit of cash and this shouldn't have been such a challenge and b) this was self imposed and I always had reserve cash if I ever really needed it.  However for someone who has never been in that position before it is a real insight into what some others go through.

Have you ever done it tough?  What did you do to try and save cash?  I would love to hear your stories and your tips are probably much more helpful than mine so please comment below

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