Advice for the recently laid off 2: How to spend less money

If you worked for a big company you hopefully have a severance package; if you worked for a start-up, or a small company, you hopefully had some stock worth something.  Either way, if you’re unemployed and looking for a job, or going out on your own, managing your spending is going to matter. 

For one thing, those corporate expense accounts and tech support calls are gone; for another, you don’t know when the money will start to flow again, so you want to manage what you have.  Assuming you are not anticipating dire straits, but want to be conscious as you cut back, here are some suggestions on ways to manage spending.

1. Downscale where you eat lunch out
Forget expensive sushi and Foreign Cinema unless a friend with a job is paying. Have more of your lunch dates at the cheap and cheerful ethnic restaurants and casual cafes most cities have. If you’re someplace with nice weather and a local park (like South Park in SF), suggest grabbing a sandwich and a drink and finding a park bench (I had a great meeting like that last month). No one cares about fancy lunches anyway, so this is an easy place to manage cost with little impact.

2. Let go of impulse buys–online and in real time.
For my friend A, it’s the books at Amazon.com; they’re irresistible. For another friend, it’s Target–she just keeps finding things she has to have.  And for a third friend, it’s the bargain stores like Marshall’s and Ross-she’s saving money, so why not pick up some stuff?  Cute, but here’s the deal–in a recession, smart people cut  spending.  And smart people without regular paychecks slow down on buying things. So, put your spending on a diet. 

Some strategies for spending less on nice to have items include: only pay in cash (and put that specific bit of money in your pocket for use in that store, no other money to be pulled out), defer a purchase by using the “if I really need this, I can come back later” trick to slow your impulse spending down (and then don’t go back and buy it later), and playing the game of seeing how little you can buy, not how much
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3. Make a budget (and manage your spend)
In other words, understand what your fixed costs are (housing, transportation, insurance, entertainment, food & sundried, etc.) and what’s discretionary.  I cut a chunk of cost from my life when I downgraded my cable (I’d pretty much stopped watching) and downgraded my landline phone. I cut another chunk when I stopped buying take-out sushi for dinner every time I walked through a decent market and started going home and making fish or chicken, instead.  In this same vein, review your gym, any personal training programs, therapists, etc and decide it it’s worth it to maintain, or if you want to stop going, switch to another provider, or cut back,.  Ditto for expensive haircuts and coloring; do you want to continue to maintain your light blonde, or is the moment to go darker with blonde streaks? And so on
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4. Make your own ketchup. And brew better coffee.
Okay, it’s not making your own ketchup exactly(that would probably cost more), but it’s re-evaluating what you pay for convenience now that you have more time. Spending time in a café when you’re working from home is one of these expenses that quickly becomes essential, but the $4.00 lattes and the $18.00 quick meals on the way home add up and don’t contribute much to your bottom line or your well-being.  If you give up some of the things you got in the habit of spending money on when you were employed, you’ll save money and get to use if for something more central.

5. Redefine fun
One of my friends has a monthly open house where she hosts a bevy of people for drinks and dinner. It’s one of the great good times of the planet, IMHO.  You could do the same, but a lower-cost way to approximate this good time is a cooking club or a monthly potluck where you and your friends get together with good drink, good food and good company at someone’s house, not a restaurant.

In a similar note, go out for drinks instead of for dinner, or go have dinner at home and then go see a movie. Spend more time on the weekends hiking and biking, and less time shopping(why good look at stuff you are NOT going to buy?). If you have a garden, work in it; and if you don’t and you can, go get some plastic tubs and plant a bunch of herbs to enliven that home cooking(or Trader Joes prefab) you are going to eat more of.

6. Chill down on the travel, weekends away, presents, and big ticket items
Steady jobs mean money for occasional weekends away, more trips to see friends and family, and less angst over a new dishwasher, refrigerator or car.  This may be stating the obvious, but deferring airplane tickets, spa junkets and car purchases is exactly what you want to be doing if you just got laid off and want to manage costs.

In this economy, no one is going to think less of you if you tell them you’ll visit a few months from now, or that your concerns around money make that Napa weekend a bad idea. Similarly, you can dial down on the gift-giving and people will get it–we’re in a recession, folks.

7. Make sure you like your sweater (aka, manage heating costs)
You want to conserve money at home, as well as out. That means understanding that keeping it warm and cozy inside this winter is going to cost a whole lot more–which you may not want to spend. So, getting acclimated to that warm sweater, that dog on the bed, that insulation around the windows makes good sense. And if your friend comes over and wants to turn the heat up, make her a cup of cocoa.

8. Swap, don’t shop
One of the best shopping excursions I’ve made in recent years was to a friends’ birthday party that included a clothing swap as part of the festivities. One woman and I basically swapped wardrobes, as I seized her (now too-small) more formal office clothes, and she grabbed my (now too-big) free agent, kinda hippie clothes.  Not only was trying clothes on and sharing fun, but I got some great items…and at a wonderful price called free.

9. Eat what’s in your house–or cut down on the stockpiling
Maybe it’s my Great Society 60’s/70’ss upbringing, or maybe it’s my shopping patterns, but my freezer is packed with food, and so is the cupboard. Last night, instead of going out, we had dinner made with things that actually were in the freezer, cupboard and the fridge. Novel concept, eh? If you’re a food accumulator–just eat what you’re captured and brought home–and slow down on the stocking up till you do.

10. Grow your own food, compost,  and be more sustainable
Okay, to be truthful, I don’t think doing this will save anyone who throws some tomatoes and herbs into containers much money; you might spend more, But, you’ll be eating healthy food you grew yourself, and recycling your food waste into compost for those plants(my friend in Denver has a organic and a non-organic compost pile; I wouldn’t go that far).  Urban gardening is something we’re all going to do more of in the years to come, consider getting started now.

11. Be a more conscious spender
Are you spending impulsively, or out of habit or emotion? Do you end up passing free time in stores, buying stuff? Becoming a conscious spender is the best way to manager your spending because it means yo
u spend money when you meant to, on what you intended. And that’s the best way to save of all.

12. Read How to Cook a Wolf.
The marvelous food writer MFK Fisher wrote a book during WW2 on how to feed yourself well during food rationing and through poor student days; it’s still a great read…and as tough as things seems, they were worse back then.

Latest Comments

  1. marnie.webb.myopenid.com says:

    Terrific post, Susan. Very particle and many of the suggestions don’t necessarily feel like giving up very much.
    I’m going to take issue with growing food cutting expenses though. You say it doesn’t cut much and that hasn’t been my experience. Sure, when I only had enough open space to grown bruschetta toppings, tomato by tomato it was more expensive. But having my own fresh food in the garden made me choose to eat at home more often, to cook, and to generally engage in other activities (a garden dinner potluck, for example) that brought down food expenses overall. It’s the habit that it gets you into. And walking in the backyard to pick that tomato — rather than driving to the store to buy it — saves all kinds of things.

  2. Nadia Khan! says:

    Well, In this economy, no one is going to think less of you if you tell them you’ll visit a few months from now, or that your concerns around money make that Napa weekend a bad idea. Similarly, you can dial down on the gift-giving and people will get it–we’re in a recession, folks.
    Nadia From PayDay Loans Blog.

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