When people don’t have money, they tend to cut out what they want to buy.
- New couch? We’ll hold off on that.
- Daily coffees? We’ll stop that too.
- Upgrade to a new car? Maybe net year.
But where people should really cut, is everywhere in their budget.
Take for instance this story: a couple I know is in dire straits. They just simply can’t find a job. He’s applied everywhere, and there are no takers, even for being a waiter or a delivery guy.
However, when you hear about their budget (snippets, really, nothing specific) they have:
- 1 landline telephone
- 1 basic cellphone
- 1 full-plan Blackberry cellphone
- Fully-loaded cable TV
- Fully-loaded internet service
- 2 cars
- going to Pizza Hut weekly
And I am sure there are more expenses not listed on here.
What struck me is that they consider everything they have above there to be a necessity.
Where people should cut in their budget is not in what they want to buy or the extra luxuries they are cutting out of their lives — they should cut everywhere that they can.
This is what I’d do to the above:
- 1 landline telephone
- 1 basic cellphone
- 1 full-plan Blackberry cellphone
- Fully-loaded basic cable TV (if at all)
- Fully-loaded basic internet service (if at all)
- 2 1 cars
- going to Pizza Hut weekly
I see savings of about $250 up there, per month, perhaps more. Switching to cable internet from Megapath can help them save even more. If you can get a cellphone for the same cost as a landline telephone (like us), then just stick with your cellphone, it’s more portable.
BUT FB! YOU ARE BEING WAY TOO HARSH ON THEIR BUDGET!!!
I don’t think I am. I’m giving them a telephone at least, and a car. I even threw in cable TV and basic internet.
Anything extra is a luxury. What the hell did we do before blazing fast internet and a gazabillion TV channels?
We still lived, that’s what!
Going without a TV is not a crazy thing to me. If you want to just have the internet without TV, why not? I’d give up my hypothetical TV first over my internet.
If you don’t have money, you can’t spend on things that you think you need. Go back to the basics: Food, Shelter, Heat and Clothing.
Even for groceries — cut out meat (it’s the most expensive food category!) and switch to a vegetarian diet with beans instead.
Beans, when purchased dried and soaked over night, are far, far, FAR less expensive than meat. Just check out the price per ounce or gram at your local grocery store next time — you’ll be surprised (or not!).
Anything else is a luxury when you are on a shoestring budget, literally.
Only when you have extra money, can you upgrade in other areas.
Just a girl trying to find a balance between being a Shopaholic and a Saver.
I cleared $60,000 in 18 months earning $65,000 gross/year.
Now I am self-employed, and you can read more about 
I hate the word “poor” cuz I know someone somewhere has it worse than me so I’ll refer to myself a struggling financially college student, but I often find myself telling my friends I can go out to eat or go somewhere because I dont have the money…its a constant thing…”I can’t go.” “why?” “cuz I dont have money” “well neither do i but im going.” “No literally I dont have money.” I’m tired of this being the constant topic of conversation, I am looking for a job, really, college in a small town makes jobs hard to come by, so besides that what am I to do?
The other end of that is rich people who won’t say they’re rich because they know someone richer. This is how wealthy people avoid feeling guilty when they feel that a problem blamed on the wealthy may actually be the fault of the wealthy, they convince themselves that they aren’t part of the problem. Meanwhile, you convince yourself that you aren’t poor, so you don’t have to sympathize with the poor. This way of thinking is a way of shirking responsibility, and of dividing the aggrieved class against each other.
One common definition of “poverty” is when you are excluded from typical patterns of consumption. That is, when you can no longer afford to consume an entire category of item, you are experiencing poverty. When you aren’t saying “hold up guys, I don’t have enough money to go out for microbrews and pizza, let’s go to Wendy’s,” but instead saying “I cannot go out to eat at all,” you are excluded from a typical pattern of consumption. You were excluded from typical patterns of consumption. You were poor.
Here’s what Wikipedia currently says, and it lines up with most research I’ve read, so I’ll accept it:
“Poverty is the state of one who lacks a certain amount of material possessions or money.[1] Absolute poverty or destitution refers to the one who lacks basic human needs, which commonly includes clean and fresh water, nutrition, health care, education, clothing and shelter. About 1.7 billion people are estimated to live in absolute poverty today. Relative poverty
refers to lacking a usual or socially acceptable level of resources or
income as compared with others within a society or country.[1]”You are in “relative poverty.” You may be in “absolute poverty” if you live in the US, as unless you’ve got good student health insurance, you probably can’t afford to go to a doctor. I have been in the former for most of my life, and the latter for a significant fraction (but if I’d been in any other developed country and most developing ones, i’d only have ever been in relative poverty.) You are poor. Don’t try and pretend you aren’t. You do yourself and those poorer than you a disservice.
for me it came down to start cutting now before anything bad happens.I went from 4 cell phones,home phone,cable and internet.to cutting back on eating out.taking left over to work and school. and seling the extra car. cancel the cable after trying to cut back they didnt want to.i bought 2 hdtv antennas that works wonders.cancel my landline.(before canceling i bought the magic jack and transfer my old number to magic jack) 20 dollars a year unlimited.works great with cable internet and for the people that say about energy cost to save on electic bill.it has call forward enable.I enable it to any phone number i want my calls to get transfer to.(that way my computer is not always on).also un plug appliances when not in use(believe me it works).i also started air drying the clothes and even bought a ceiling rod that they sell to hang clothes in hangers to dry.i am using prepaid phone only for emergencies.use the magic jack when at home.use internet to watch the shows u cant get with antenna.(now magic jack has a new device where u dont have to have a computer on to make calls.but it costs more money.so far i am doing great and kick myself when i see the electric bill goes down every month.and no cable bill.no cell phone bill.no phone bill.wow i wish i would have done this sooner. Go to the library for movies and books.also check thrift stores and goodwill.cheap movies for cell.good luck every one!!! God Bless
Lots of people have reservations about cutting cable completely. I did it to fund my dog’s leg surgery and after didn’t feel the need to re-connect. The first few months are hard but you can find some of the shows online. In canada it’s harder to find everything you used to watch but I hear it’s easier in the states.
Um, why is it that “they” can’t find a job, but “he’s” applied everywhere? I don’t care who you are, there is no reason not to have both of them actively looking for work.
Also, cell phone >>>> landline; and internet is far more important than television of any sort. I have never paid for cable (it was provided free before I moved off campus in college, then I had such bad sticker-shock that I refused on principle to pay for it) and my internet wasn’t too very expensive.
Switching to a vegetarian diet to save money is the worst reason for vegetarianism that I’ve ever heard. Check out portion sizes — eating healthier and cooking meals that stretch in combination with eating the correct portion size is probably better for saving than skipping meat. For example: serving size of rice = 1/2 cup = ~200 calories. Stir fry some fresh vegetables and strips of meat! for protein, and you have a filling, healthy, and inexpensive meal.
I should probably not have gotten started. Next I’ll be ranting to myself how the media has ruined America…
I’d cut out cable and landline and car (city living FTW) altogether, get better internet service, and netflix. Then use a decent low cost android phone (no data just talk) on prepaid as your phone and list your google voice number as your phone number (talking on wifi doesn’t use minutes).
agreed!
“If at all” for internet service for someone looking for a job?
No, internet service is a necessity. Unless you’re able to mooch off the neighbors, it isn’t optional. The library is a desperation option, that doesn’t give you enough time, in most libraries, to do more than one application a day. For the most part, you can’t just walk into a place and apply anymore. Most corporate, and even some local places will just direct you to their website. No internet = no job.
Also, for being able to jump on an opportunity, you should cut the landline, not the cell phone.
Have you looked for a job in the last 5 years or so?
I recently reduced my internet and cable TV to the absolute basics. I have a handful of channels and very slow internet now, and it’s still fairly expensive. I work from home so I do need the internet and the slow internet only makes things more difficult, but that’s where I am. It certainly doesn’t feel like a triumph.
If you work from home can’t you write off the cost of the internet as a business expense?
i keep my full blackberry plan in exchange of home internet and land line. i do so that if a job calls or emails i get it right away. but the rest i agree on
My wife and I live in the country, and work in different directions, so having 2 cars is a bare minimum. We’ve cut out all the extras, and keep the sheer basics. We have basic Internet, and we share a cell phone plan with my wife’s parents to save on fees. Outside of that? Electricity and mortgage — the rest goes to bills until everything is paid down and/or off. As for a landline, we use Google Voice at home to save on the bills as well.
I’d say keep the cell phone and ditch the landline. A basic land line phone through Verizon where I live with NYS and Federal taxes comes out to be around $50 a month, and that’s not including long distance. If they’re in New York or any large city, I’d say ditch both the cars.
Depends on what kind of work they’re looking for. If they might have to commute to the suburbs, they should keep one car.
In most areas, a landline is more expensive than a basic (prepaid) cell phone. My landline I just cancel was $21 + around 10 in taxes a month, my prepaid phone is $100 a year, or $8.33 a month, no noticeable taxes (they steal $1 in calling credit a month but that doesn’t change the $100 total cost per year).
I know so many people who are dead broke but have way nicer stuff than me (i.e., iPhone, iTouch, flat screen, lots of TV channels).
The TV channels are the only ongoing cost there. Selling most of those things would bring temporary relief, and may become necessary at some point, but would not help them in the long term.
if you’re in the city you can almost definitely cut out the car and replace it with an occasional zipcar rental and a bike or public transit pass.
Beans have toxins in them that can be harmful if not prepared properly, as do many other plants. Before suggesting cutting meat out of one’s diet, you might want to consider health implications of doing so.
Quit overreacting. All you have to do is cook them properly – follow the package directions. There are plenty of health implications from pathogens in improperly cooked meat such as Salmonella, e. Coli, etc., not to mention all the other health implications from eating an animal-based diet. Maybe you should think about that before dissing someone for suggesting that they replace meat with beans.
I’m currently not in dire straights, but to be budget oriented, I don’t have too much expenditures beyond cell phone and internet. My boyfriend and I each have a separate car and separate jobs.
I think the most difficult thing to cut would be the internet to the slowest service. I feel that having something reliable and expedient is crucial if you’re in their situation and looking for jobs.
I’d opt out of cable entirely and have two basic cell phone plans. With a decent internet plan, most stations have full episodes of tv shows available to watch.
Another thing that works is complaining to companies when you get crappy service. Use the internet if necessary to get to the top people. IN just the last month, I got a $100 gift card from Old Navy (complained to CEO after crappy in-store service and problems) , a $60 credit from Amazon (just emailed them with numerous mistakes in their listings and problems with sellers) , $420 from Apple (had to speak to store manager about problems with Mac and trainers and got refund on one-to-one membership, price match on amazon, and free extended warranty), $15 a month off from cable company just for threatening to close my account and so on and so forth…..Also use price match when companies will match and give you extra.. I recently did that with something i bought from skinstore.com and got over $100 back as they did a 115% credit).. Email companies for coupons 90% will send you – often will send one or two free coupons and the rest .50 off (which hopefully your store will double)…
i actually cut the landline years ago and just have a basic talk cell phone plan which Im going to cut even further by switching to prepaid with my current (paid for) tmobile phone – which hopefully will last another year. I think the cell is cheaper than the landline and you get free long distance. I held off for a long time as the first time I got a cell was 2007 and friends were begging me to get one – and till this day I still don’t have any data but its getting hard to keep that unless you want to buy a new phone. I want to cut cable but I stupidly signed a 2 year Directv contract. I want to get an antenna and just get basic HD with a small HDTV I got for only $300 on Amazon. (And if I can figure out how to use those streaming services and or record TV). I do watch some shows when possible online instead of subscribing to a higher tier of programming (i.e. I watch Logo on their website) But Ive decided it would be ‘healthier’ for me to do without TV and actually live my life. I haven’t eaten out or gone to a movie in 2 years…Only get videos from the library. Only buy groceries on sale based on circular- mostly buy 1 get 1 free items and then other basics at Walmart which are 30% less than my local grocer. But I still need to cut!!! Ive got medical bills that are over $200/week on average- sometimes even more and its not sustainable on a disability check. I have to have internet but Ive saved $15/month for over a year by threatening to cancel…But I can’t keep using that excuse- they’ve caught on. (but if I can watch Tv thru the internet, it would pay for itself right?) Btw, I only signed the Directv deal because at the time it was a huge value – It still is…i didn’t pay for any TV services for the first 9 months of my contract, but now I’m paying $75 – Don’t have HD – just standard TV and one DVR. I drive a 1999 Honda but again that can only last so much longer even though it has only 45000 miles. Everytime I get it serv iced they tell me I have to pay thousands for parts- but I don’t know – I assume theyre probably gonna be right soon. I wish I lived in a city where I didn’t need a car – I used to live in chicago and saved so much money on no gas, no insurance, no parking, no car! But its paid for. So i need some more savings ideas.
The problem with cutting internet, cable and phone lines/cell phones is that you are typically locked into a contract that sometimes has ridiculous early termination fees. Sometimes it’s worth it to keep a $80 a month cell phone, rather than pay the $300+ termination fee. (Because hell, he might have a job within 3 months. Then he’d be paying the early termination fee, plus any new plan/phone fees.
You can often request to suspend or downgrade service, which avoids the ETF. Especially if you tell the company the reason why you’re downgrading. That $80/month mobile plan can drop data service, have them block all SMS messages, and go to the smallest minutes plan, and probably cut the cost down to <$30/month. That's $50/month in savings.
And to counter your example–most ETFs are less than $300, especially if you're not at the very beginning of your contract. Even assuming that, it's cheaper to pay a $300 ETF than to be on an $80 plan for 4 months. And if he gets a job at 3 months, then GREAT–he's likely got enough spare income to afford getting a new mobile phone service. (Not to mention a working phone, so he won't have to pay for a new one, and if he goes with a pre-pay service or T-Mobile, may even find there are cheaper options than an $80/month, fully-loaded service.)
A lot of times they won’t let you change to a lower cost plan if you’re under contract..It depends. Sometimes cable even charges you to downgrade service. But try cutting cable. I know several people who cancelled their cable and the cable company forgot to actually cut all the cable. THeyre no long paying for it but they’re still getting the basic channels so at least they have reception on broadcast networks. I also think a basic cell phone – prepaid – is better than a landline. At least for me, the landline was the same or more expensive and also charged for long distance. I also hate texting because why should I get charged if someone texts me? I know its only .20 but its embarrassing to tell people not to text you because you have to pay per text. also hate when I read that it costs the phone company .003 and yet they’re charging .20-.30 for the sender and the recipient. Highway robbery
If he has a paid-for Tmobile/GSM phone, check reseller SIMPLE MOBILE – They use the Tmob network and if you have an unlocked GSM phone, they give you unlimited everything (including international texting and 3g data) for only $40 a month. Prepaid is the way to go. I have a Tmobile phone and my contract has expired..and even though I had a grandfathered cheaper talk only plan – I don’t use it enough so Im going to try to go to the prepaid – either the $30 plan that gives you a combo of 1500 minutes and texts…or the pay by the minute…I ts just hard to predict how much you’ll use your phone – esp if you’re looking for a job – or in my case have lot of medical issues…and very isolated..but never wanted to get into a situation where i was afraid to call someone because of the cost…cuz i need to get out of my depression and isolation even tho I’ve lost most of my friends and family has totally abandon me
I think you make some great points here! So many of my friends who are so deeply into debt refuse to cut back on eating out, alcohol, and other completely absurd expenses. It’s their business and their money, but I still have to roll my eyes when they say “I’m broke!” — such a relative term. Sigh.
People are embarrassed to tell their friends they can’t afford a restaurant or a movie. I go through that al l the time. I had to tell a friend to stop texting me because even though it was only twenty cents, it was just bothering me that i was paying for something when he could have just emailed me or called me . People assume you have unlimited texting like they do or you can afford a $12 movie. And its hard when yorue depressed and lonely like me and then can’t do the stuff on the rare occasion someone tries to get you out of the house
Pet peeve of mine: when people I work with try their damnedest to get out of work, then whine until my ears hurt about how broke they are…
@65c43257cbb9a7508c77eee696e4281b:disqus – I have actually told people I was broke when I wasn’t because I would rather not eat the overpriced and unhealthy restaurant food. Is that wrong? I don’t think so…
I absolutely agree. The first thing people should do when they are short on money is cut back in everyday expenses. Great job at illustrating everyday expenses as well.
I have found when people say their cutting back, they have a way different definition then I do. If I really needed to cut back, I’d start scrimping again at my food bills, gas, and find ways to make sure I didn’t eat out or buy fancy coffees and energy drinks. I’d also get rid of the landline and cable if I wasn;t working and the blackberry. I’d keep internet though, if I wasn’t eating cat food.
There are tons of things you can evaluate and really not even feel the pain of cutting. I just cut out our satelite because we can watch everthing online. We use our wifi($32) when at home and don’t pay for internet on our phones. Also shopping your elecdtric bill to make sure you are locked into a low rate.
I don’t think you are being hard at all. There is no need for many things like that, especially if money is tight.
We used free Over the air Tv for the last 3 years and only broke down and got cable recently because our new place had no reception. Even then I managed to get cable for $10 a month. If money got tight, I wouldn’t even be willing to pay that for tv.
Great post, great job.
Where do you find cable for $10. Even if all you get is the basic network affiliates for reception reasons, it is much more than that where I live. And if you don’t have an expensive HDTV and are still using CRTs you really can’t get local reception without cable. I wonder how we did as kids
Well when there was a the over the air switch over to digital rogers offered a deal where for $10 you could get a very basic cable package. I do prefer the free over the air we got with our antenna but since we moved to an apartment on the main floor of our building we just can’t get get it any more. Maybe in our next place.
I’m not sure what its like in the North Americas, but here is Oz both hubby and I both look for and apply for jobs via the internet. Many of the jobs I’ve applied for over the past 2 years (mainly govt roles) can only be applied for via the internet, so I’d say basic internet is a necessity for jobseekers – unless – they have access to job seeker assitance centres that provide free internet for job seeking purposes as we do in Oz.
I would cut land line and keep the basic cell phone. Seriously, if you are both unemployed, then it’s time to cut everything.
My mother says that in our post 9-11 society, cell phones are a necessity, not a luxury. On the other hand, I lived for 5 years without a land line.
Housing – the largest
expense most families have and many do not realize how unnecessary a lot of the
space is. Whether you rent or own,
reduce your housing costs or subsidize it by renting out a portion.
Decor and Furnishings – Be
grateful you have something to sit on, sleep on, take hot showers with, and
appliances that allow you to store food for long periods of time. Realize that
you don’t NEED a George Foreman grill or a fancy fridge that makes ice cubes.
Entertainment –I know people
who have tons of debt but still blow a ton of money on concerts, nights out,
trips, etc. Be grateful for the
entertainment you do have. Pets, tv,
internet, sports teams, the library are forms of entertainment people take for
granted.
Phone – I switched our landline to VOIP and
now only pay $40 per year. No downsides
so far.
I agree; I want to cut my housing but short of foreclosure nothing i can do. I want a smaller place but housing values in my condo have dropped 50% – its a no win
Could you rent out the condo (for the price of your mortgage plus a little extra for taxes, which is typically less than the usual rent payment)?
I’d cut the landline not the basic cell phone which can function as both, prepaid phones are great there is no monthly bill and you just pay for what you use. I gave up my landline in the 90’s and havent looked back, now I dont know anyone under 50 who still has one.
Basic internet is also a necessity, especially for job hunters. Also through using Hulu or Crackle or the various other free tv and movie sites you can cut cable completely.
I have a lot of vehicles so I may be a bit biased on that one 😉 As long as they are paid for multiple vehicles are not a whole lot more expensive than one, you’re only paying for insurance and registration. I drive the same amount of miles regardless of how many cars I have and spend close to the same on gas and maintenance, its just spread out across several vehicles instead of all on one. My old truck only costs me $18 a month to sit there ready to drive and I only have to pay for gas when I take it out. Others here in the mountains will keep 1 4WD winter vehicle registered but not insured most of the year and will rotate winter and economy commuter vehicles on and off insurance seasonally to keep costs down.
You’re right..I cut my landline too. My only problem is when the phone malfunctions Im out of luck cuz Im not working and don’t have access to a landline. At least with a major, I had a store I could go to and get a replacement. Im afraid if I change to prepaid, I won’t have that but I guess thats the risk I have to take. I agree internet is a necessity – but I called at one point and threatened to leave for dsl and I got a $15/mos off for 12 mos (I think it was a new customer promotion and I complained that I should get that too and I got it – its not much but it was a savings). Prepaid is good or like I said earlier if you have a GSM phone look at Simple Mobile which gives you a $40 unlimited plan; I might consider that but think will go for an even cheaper Tmob $30 plan or pay by minute. I drive a 99 car with low mileage but Im going to have to put money into it and i don’t know if its worth it. My main problem is medical bills. Im on disability for mental illness- Im supposed to go to weekly therapy , groups and psychiatrists and can’t afford it. Was going to non profit and they just doubled the prices. Meds are hundreds of dollars per month. What I really need is to go to a long term hospital for treatment – at least a couple months but they charge $1200-1500 a day and I can’t afford it and they don’t take my Medicare disability insurance so Im out of luck and stuck in a cycle where i barely leave my house…all friends and family have abandoned me – I’m surprised I’m still alive . No one can understand how bad it is and no one understands…they think Im lazy- not the case…b
I would also add that they can probably check their gas expenses too! Maybe now isn’t the time for extra trips or driving somewhere if they could easily walk, and depending on the area even switching to public transportation would help save some money.
I’d argue that basic internet is almost a necessity, unless they have options to access the internet for free like the library. So much job searching is online nowadays. When I was job searching, I had to constantly be looking for jobs and sending out applications.
I was going to post this exact comment. How else are you going to learn about jobs that might require you to move?
Surely you can go to your local library for that though?
Depends on where you live. Currently, my local library charges parking. (not cheap!) Paying for basic internet would be cheaper than paying the parking fees!
Besides, I’d rather have access to email all the time. In the past, a few potential employers have contacted me via email or through LinkedIn. I wouldn’t want to wait a day or two to respond!
The library computers are often down where I live…And also you might not be able to get to them often enough and you’d hate to lose a job opportunity because they emailed you and you didn’t get back to them quickly enough…But its a good idea… I get DVDs from the library as well as music CDs. You’d be surprised what they have. Its also prob not totally legal but you can get any music from file sharing sites or sites that offer free trials. I haven’t paid for music in years.
Good points 🙂 I don’t think you have to completely cut meat out of your budget though. I keep my grocery budget in check by eating beans and lentils and buying a whole chicken and stretching it as far as possible. (Roast it, soup, wraps, etc.) If I ate beef or pork, I’d fine the cheapest cuts available and learn how to prepare them so they’re fantastic.
Want to know what else keeps my budget down? I rarely eat dessert. No cookies, no cake, no ice cream, no candy, no sugary snack foods — at least not on most days. I’m amazed at how much people spend on food that is not good for them. They’re the “luxuries” in the food diet, in my opinion, not necessarily meat.
Also buy from the circular. I buy majority of buy1get1free sales and just buy extra portions of meat when they’re on sale. The cashiers even know me by now and have told me they do the same thing. You start noticing the patterns and if you buy a lot of stuff , it usually goes back on sale by the time you need to replenish your quantity. Also get generic whenever possible. And use coupons. Also monitor the checkout; Cant tell you how often things ring up incorrectly and the cashiers won’t even notice. Our stores have policy that item is free if it rings incorrectly and I often have to fight for that. Also email companies for coupons. (Or tell them you bought an item and it was bad and they’ll send you free coupons…Not proud of that but it works if you’re desperate)
Another tip if you have large bank fees, go to an internet bank like Ally or ING…Most of them have free checking and free debit cards…and even have ways that you can use free ATMs. I have BOA but don’t use a debit card but even so, Im thinking of quitting them entirely. BUt they don’t charge me any fees cuz I had a countrywide mortgage that is now BOA.