A poor girls guide to being great with money.

In my previous article I mentioned how I manage to do quite a lot with not much of an income. And I thought a short guide to how I manage my income might go down well as a follow-up. So here it is Amanda Harper’s guide to squeezing the life out of every cent. Enjoy.

  1. Learn to keep an accurate mental track of your bank balance. This one comes first because to me it’s the single most important money minding skill you can develop. If you don’t know what you actually have, you quite simply can not plan accurately around those limits, and may easily find yourself overspending.
  2. Plan your purchases. I don’t splurge much. Maybe a couple of times a year I will make a truly unplanned purchase, and usually it’s not a large one. I literally plan my purchases down to, and including my chewing gum. This way I can account for every cent in my bank account, and for all of my out goings.
  3. Make sure what you plan to buy is actually what you want/need. A great example of this is the netbook I am writing this on. I bought it last Summer. I had realised a few months before that my four-year old Asus 701 EEEpc was dying, and that I needed to replace it. So while I saved for the replacement I spent hours on various websites comparing the specifications of those netbooks available in Ireland, and weighed their features versus costs. So in the end I found myself owning a netbook which is perfectly suited to my needs, at a price I could, just barely, with a LOT of very careful saving, both afford, and justify.
  4. Which leads nicely to this one. If something you need costs a lot, save for it! This is partially joined to the last two points also. If you plan well ahead, and research what you need from what you need to get you should have a vague price. Then you save for it. Hell you can start saving before you even know how much it will cost. You don’t have to save a lot each week, even five euro’s will mount up surprisingly fast over time, but saving is better in the long run than borrowing at relatively high interest rates.
  5. Don’t borrow. Period. Living within your means is sometimes painful. I know that myself. I often sacrifice things I would like to do, or have, or experience because it will push me beyond my means. But it’s better that than owing what ever dark, tainted residue exists in place of my soul to some bank. (I don’t count a home mortgage in this. That’s often a frugal and common sense thing to do, if approached in the right way.)
  6. Never allow yourself to be caught by surprise by the predictable. If someone matters to you, you will know when they birthday is. So no excuse for being caught by surprise by it. Same with Christmas, Easter, etc. You can’t completely plan for the unpredictable, though you can lay some contingency plans, and have a small buffer squirreled away.
  7. Budget for the day-to-day. Have envelopes for each bill, and add the right amount, plus a couple of euro’s “just in case” to each envelope, each week. For example my broadband is 30.40 euro’s per month but I round it up to 31. This way that 60 cents will mount up over time giving me some slight buffer, just in case. We also pay our electricity supplier a certain amount every single week, and even though we are now significantly in credit we will continue to do this even through the Summer when our power bills are the lowest.
  8. Prioritize. Somethings are simply more important than others. So figure out what your own list is, plan appropriately and stick to that plan.
  9. Remember monetary windfalls don’t go off. If you’re used to your bank balance being tiny when you get a surprise windfall it can be incredibly hard to not just spend the whole lot right now. There’s almost the feeling that it has a “use by” date attached. It doesn’t, it’s money, plan to use it sensibly. Remember that it may represent a deposit for a new rental apartment in a better location. Or it may represent the chance to start that small business which could well represent an entirely new beginning for you. But that said, do use a little of it for something to make you smile inside. Many years ago I received a 500 euro windfall. Most of that money went on the following years school books, and materials. But I also spent a little on some budget climbing equipment. The former took a load off of my mother, the latter meant I didn’t have to borrow equipment every time I was invited to a crag.
  10. If something costs you money regularly, but gives you no benefit cut it out. I used to play World of Warcraft. For a long time I truly enjoyed playing it. I got immense enjoyment, entertainment, personal time with one of my partners, and one amazing friend from it. Hi Rachel!. But after a time the enjoyment waned massively, my partner and I broke up, and I was mostly chatting with my Warcraft friends on Facebook, AND it was still costing me money every month. So I cut it. That was 4 euro’s a week extra. My television had channels I never watched, I cut them and saved another 2 euro’s per week.I keep a constant track of these things. Cutting that which no longer brings joy, to make space, and allow the expense of those that will. This way I keep my budget balanced.
  11. Bad quality, cheap anything is a false economy. It’s tempting to buy the cheapest all the time when you live a shoestring life. But often this simply leads to you having to replace much sooner, for not that much of a saving. This is again where research pays off. I’m a gothgirl, I’m sure you noticed, so I wear goth boots. I also tend to wear moderately expensive goth boots. In the past 8 years I have owned two pairs of them. New Rock Demonia’s and Demonia Rangers. The New Rocks cost almost 200 euro’s, and took me months to save for. And while the Rangers were a gift they would have cost a 100 euro’s. For a girl who would have before trembled at paying 50 for a pair of anything those are huge prices. But my New Rocks lasted for almost four years, of constant wear. I literally wore no other shoes, or boots for those four years, and those boots are still in my wardrobe, coming out for special occasions as I spend their remaining lifespan very carefully. My Rangers lasted for over two years of continuous use. I have never, not once, gotten such a life span from any other set of footwear. Maybe six months of continuous use at most. And all because often cheap is simply a false economy.
  12. My biggest piece of advice is to shop around for any purchase over a certain threshold. I know it probably seems obvious, but the sheer number of people who tend to buy everything of a given category in one place. Or who buy the first thing that suits that they see, is frightening. Prices for even the same item can vary a lot from place to place. So look around, find the best deal.

Most of this list is probably very obvious to most people. But they’re all lessons I learned gradually over time, and if it’s a list that can short-circuit someone elses learning process, well then good. Living on a shoestring can be hard, soul-destroying sometimes. It often feels like running full tilt just to stay where you are. But it doesn’t have to be insanely hard. A little care, and some diligent planning can often allow you to avoid at least a little of the stress and worry that usually follows you around if you live like this. And even a little less stress is well worth working for.

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