Frugal strategies and outlooks - Part 1 of Allisa's spending makeover: assessing the bleeding

If you've been reading my blog for a while, you know that I'm much just as interested in the "gestalt" of frugality as I am in individual deals.  Getting Bounty paper towels for $0.50 a roll and a free tube of Colgate toothpaste and a pound of Earthbound Farm organic carrots for $0.29 is fantastic, no doubt about it.  But what is your relationship to saving money?  Is it all about belt-tightening and scaling things down?  Is it more about living a high-end lifestyle for much less?  Is it about adjusting your lifestyle to meet your wallet or squeezing your wallet to accommodate your lifestyle (and how are those things different)?

If you're like many people I know, it's all of the above. I think lifestyles and spending habits are becoming increasingly complex.  We're given all sorts of cultural messages about what we should own, how much money we should save, how much time we should spend working vs parenting vs recreation vs retirement etc..  And the truth is, there's no one single solution for everyone.

I was recently asked by my friend (we'll call her Allisa) to sit down with her and see what she could do to save money while leading her very busy, hectic lifestyle.  She's an accountant who makes a nice salary, married to a businessman, with four kids ages 4-16.  (To give you an idea of how busy she is, she had to reschedule our initial meeting three times!)  While they are doing fine as a family in terms of money coming in, she feels like an insane amount of money is going out, and she doesn't understand why.  She wants to get some control over their money flow.  "While we are okay in the salary department, we are hemorrhaging money each month, and I don't get why.  We're not saving as much as we should, but I don't have time to do things like clip coupons or run to a million different stores for sales.  What can I do to save money that won't take up huge chunks of time?"

Money gets spent in many different categories:  groceries, clothing, entertainment, mortgage, utility, house-upkeep, etc. Allisa felt very overwhelmed.  I wanted to attack each area one step at a time.

The first thing I did was ask her how much she spent on groceries per month.  She countered by asking me how much I spent, and I told her on average, $200-$250, but that's just for my husband and me, so it wasn't a fair comparison.  So she took a wild guess on her monthly grocery expenditure:  $800, give or take a few. Then I asked her to track her grocery spending for the next month by taking the receipts for anything spent at any grocery store and putting them away in a drawer. At the end of the month, when she tallied the receipts, she had a shocker:  she had spent $1,750 on groceries.  "I cannot believe I spent this much on groceries.  We're not even such big eaters!"

Cutting down your grocery bill (or really any sort of expense) is like going on a diet.  Before you start cutting foods out, take a stretch of time to record how much you are actually eating. You might be surprised at where those calories are coming from.  Before you start any sort of frugal regimen, take the time to record what you are actually spending. You might be surprised shocked at how much money is going out the door.  Before you stop the bleeding, you are going to need to know whether you need a band-aid, a bandage or a tourniquet.

Coming up, Part 2 of Allisa's makeover:  " "There is no way I'm EVER going to clip coupons."
 

Pin It