Debt is like a dragon. While it may lie sleeping for a while, when it wakes up it can breath fire on your finances. As I began a writing career a few years ago, I did it on a shoestring budget. I was fortunate if my annual earnings eclipsed $24,000 a year. However, thanks to some careful planning I was able to get by without taking on any debt.
You have to have a budget; there is no way around this one. I used a spreadsheet that outlined my monthly expenses versus my income. I updated it weekly along with my check register. Even though I was living hand to mouth in some instances, I stuck to my budget.
You have to be accountable to yourself with your budget. You have to look at your financial picture honestly, no matter how bad it may look. Make a commitment to stay out of debt and stick to it.
Live beneath your means
This means no fancy cars, no fancy clothes. I would buy clothes from Walmart or Target, even a thrift store. Even though my car was older, it was paid for, and it got me where I needed to go.
Save for a rainy day
Even on a tight budget, you can find a way to save at least $50 per month. I would put that into a high yield savings account to begin earning interest. No, it wasn’t much, but it was something to get me by in the event that my car broke down or I had expenses for holidays or gifts.
Avoid eating out
For many people, this is a hard one. However, most restaurants will mark up the price of food by as much as 2 times as what you can get in a grocery store. I did a lot of cooking at home.
Don’t get caught in the “now”
It can be difficult, watching friends and family get new toys, clothes or go out and enjoy themselves. I knew if I wanted to stay out of debt that I had to look to the future and not to the now. When you want something, you save for it, even if it takes a little longer.
Learn to shop smart
I clipped coupons, I bought produce that was in season, I took advantage of in store special items, and I made sure I bought based on the unit price not the advertised price. The less the unit price (found on the price tag as a number in much smaller print) the more I saved. I shopped with a calculator and added up each item as it went into my cart to ensure that I stayed on budget.
I would save errands for one day per week. In order to be effective, I would start out at the furthest point away from my home, and work my way toward my home. This helped me save on variable expenses like gas and car maintenance. When the weather was nice, I would opt to walk to the store as opposed to drive.
Use less…of everything
It’s easy to become carless with items like shampoo, conditioner, or even body wash. I made certain to use only as much as I needed, and didn’t over squeeze the bottle. I never threw away food and I never let anything go to waste.
I got a debit card that let me spend and earn rewards points. My rewards card from Chase pays me $1 for every $4 I spend. This is another way of earning and saving even more when you are living on a tight budget.
It isn’t difficult to live on a budget of $24,000 a year, however, I admit I don’t miss it. Even though my annual income has tripled since that point last year, I remain frugal and conscious of my income and expenses and still do not carry debt.