Tightening your belt

There are many of us who have known this day would come. We've been preparing for the changes a big increase in oil prices would bring - not just to the price of fuel but the flow-on cost to almost everything we buy. We've also been preparing, as best one can, for climate change. We bought tanks a few years ago, have solar hot water, have cut back on plastics and try to conserve and reuse. We have our systems in place here and although we always look for better ways or living on less, I feel confident, without being smug, that we have made a move in the right direction.

But what happens if you haven't prepared? What if you've been working on building your life and then you notice prices increasing, there is a downturn in business, you're paying off your mortgage, have quite a bit of debt and you realise you're in trouble. You or your partner might even have lost your job. You're living a life that needs those two pay packets. What happens now?

I received two emails in the past week describing exactly that scenario. This post is for those two families and for anyone else who needs another perspective on an all too common problem.

You need to change the way you live. I'm not a financial adviser but all is not lost. You can recover from this and go on to live a full and happy life. It won't be easy but it's better than going bankrupt and losing what you've worked for. There are tough times ahead for many people but while much of the mainstream media is still advertising 50% off sales (ironically for businesses closing down or struggling to survive) here in the blogisphere you will pick up some good tips that will help you recover from living a "normal" life in 2008.

The first thing you should do is to stop spending, work out a budget and track your spending. Those three things will give you the best understanding of your financial situation. It will be difficult to stop spending and live on less but you will benefit from it in the long run. Let's face this honestly, you need to change, and if you can tighten your belt and work at it, there is a new way of living waiting for you.

Stop spending - on everything except what you need to live. You should keep paying off your debts and buy food and fuel. Everything else is on a need to live basis. This strategy will help steady your ship and help you establish a plan.

Work out a budget - so you continue to pay off your debts and have money to buy food and get to work.

Track your spending - take a small notebook and pencil with you every time you go out. Every time you buy something - even if it's a pack of chewing gum, write it down. After a week you will have a vague idea of where your money is going, after a month you'll have a very good understanding and should be able to stop spending on many things and cut back on others. For example, you don't need two mobile phones, you may not even need one. You don't need pay TV, pizza delivered to your door, a second car, a new dress or golf clubs. You might want these things, but you don't need them.

If one of you have lost your job and you're now trying to live on one income, all is not lost. It is now the job of the person who is staying at home to save as much as possible through good homekeeping and being frugal. If you read through my blog, there are posts on different ways to shop, stockpiling to save money, cooking from scratch, looking after what you own, making your own bread, soap, shampoo and cleaners, and getting back to basics. You will need to reskill yourself in a number of ways, but you'll probably find the information on how to do that if you look through my blog or by clicking on many of the links on my side bar. Your blog neighbours are here to help you.

I grew up in much simpler times when people saved for what they wanted. We had no credit cards and if you didn't have the cash, you went without. We didn't feel deprived at all. It was uncomplicated and we were independent. We don't need to have everything instantly - saving and waiting for what we want is good for us. It makes us appreciate what we have. It's normal now to want something and to buy it immediately on credit. It's normal now to carry debt. It's normal now to have more than you need. It wasn't always like that - this is an aberration. Like spoilt children we have been given all we want. We are made dependent on our banks because we borrow money to buy our wants. We have been deskilled because we now buy food and clothes that don't require anything of us, except our money. We've either forgotten or have never learnt how to cook from scratch and how to make what we need. Having everything we crave hasn't made us happier. There is more depression now than ever before, more bankruptcies and more divorce.

We need to get back on track. We need to simplify our lives and realise that we don't need all that crap to be our true and authentic selves. It probably needed climate change and peak oil to make us look critically at what we have become. Now that time is here, let's make the most of it, and of ourselves.

I hope you come to understand that everyone must limit themselves. All of us can only spend what money we have, not what credit we have. If you continue to spend, banks are there to help you, until you are deep in debt. Take charge of your own life, rediscover your hope for the future and become as independent as you can be. The true test of this is if you are strong enough to take that first step and then to keep going. Be aware that many people are going through the same thing, you are not alone. Find a good book - Your money or your life is excellent, or a blog or website that keeps you on track and focused. Here are three websites I'm happy to recommend: AU Simple Savings, USA Dave Ramsey, UK Money Saving Expert

It will help you to stay motivated and swap stories with others who are dealing with the same tough issues. It won't be easy but it will be satisfying and I guarantee you this - when you come out the other end with your financial affairs in order, being able to look after yourself without having to buy everything you need to do it, you will feel stronger, wiser and happier than you were before your change.


  1. Wow that's uncanny. I was thinking of this last night. How the simplification we've already done stands us in such good stead and how hard it will be to start from scratch in a difficult spot. As usual, you've written about it so well Rhonda.
    I believe the first key here is STOP SPENDING. Spending is such a habit for mots and a bad one. Reskilling is so important too. Set goals for the new skills you need, one by one. It's too big if you try and do everything at once.

    Very inspiring Rhonda, I bet that helps those who have emailed you immensely.

  2. Hi Rhonda Jean

    Very well said! I have been trying for the past couple of years to get this message through to my family and we have made progress, but there is still a way to go. Like you, I was raised on if we don't have the money we don't get it regime. Unfortunately, my partner still likes to use his credit card.

    One idea I have introduced into our household is the "Wish Book". Everyone has a page and when they see something they want (mostly rather than need), they can write it in the wish book. That way we have a ready made list for birthdays and Christmas, although I still think we go too overboard on these events. It also helps to limit the spending between celebratory events.

    All this stems from our "throw away" society. I can't believe the things that people will throw out that could be usefully still employed.

    Anyway, thanks for the post - I will print it out and leave it on my partner's desk!!

    love and light

  3. We've been living with a tightened belt for years, but the price increases, no pay increases, and an unfortunate run of luck since last year financially have us going under now. I am extremely grateful for a pantry and freezer stocked with many things and that I have gotten into gardening again, but when the stockpile runs out .......... well, I don't want to think about that.

  4. Excellent...sound wisdom, Rhonda. We're not at the beginning stage, but somewhere in the middle of trying to implement these principles and make them our lifestyle. I can say this as an encouragement to anyone who is discouraged...the smallest changes DO add up. We've weathered so many emergencies in the past four years, I can hardly count them! Thankfully, I have a husband with a steady head on his shoulders, and we've committed to teamwork, rather than pulling at separate directions. Our goals become clearer the more we stick to our goals. The nice thing for anyone doing this is that often unexpected GOOD surprises come along, too! In all, no matter what the ups and downs, it just makes more sense, and there's some relief and peace in knowing we've taken steps and responsibility...we're not doing without...we're taking charge of our resources and prioritizing them. That is empowering; economizing so that we have the resources available for the most important things :) Anyone can do this! I hope anyone trying to make sense of their situation can be encouraged that there IS a way to personalize it to benefit their situation...and bring about lasting solutions.

  5. Great advice...
    Although we are not exactly where we want to be we are doing pretty good and working on the areas that need working on!

  6. Excellent advice Rhonda! Wish I had found you (and MSE) before I went bankrupt :)

    I'm disabled and living on state benefits and although I have less income than ever before, conversely I have more spare cash than ever before; those little changes do add up.

    Robbyn is so right in her comment control of our finances is the most empowering thing!

  7. What a fabulous post, with so many excellent ideas to follow through. I do my best to be as frugal as possible but the rising food prices here in the UK are becoming seriously scary. Even a 'tightwad' like myself is finding it difficult to control my spending. These are seriously frightening times financially.

  8. You always seem to write about what I need to hear. My partner and I are still in school and haven't really even had a chance to start our lives yet. I often think about what I can do, since we have a tiny income as it is (fortunately, we both get enough financial aid to make school almost free...for now), and renting doesn't lend itself to making home improvements or a real garden to speak of. But what we can do, and what we're working hard at, is saving every extra penny we can get our hands on. Sure, we still spend on Netflix, and will occasionally buy something or go out to dinner when we should probably save that money, but we still have quite a lot of money in savings for people our age, and my partner is making big steps in paying off his credit card debt.

    Naturewitch-- What a wonderful idea with the wish book!

  9. Consumer spending would have to be one of the biggest problems that mainstream media has yet to air publicly; and any wonder why! Better not to say anything that might cause further downturn in the economy!

    Yet the environmental damage caused by consumption is increadible. I read an annecdotal report that looked at the wealthier suburbs of Sydney. The point of interest was that if every household in those suburbs changed to energy efficient light bulbs it would make no improvement in greenhose gas emissions.

    This was because of the amount of spending on consumer items. Everything we buy takes energy (and raw materials and water) to produce and therefore depletes them and adds to emissions. Stastistics demonstrated that when people have money they, perhaps naturally, spend a lot more.

    We've been SO indoctrinated to believe that wealth brings happiness but as you so rightly say, this is NOT so. If you asked people if they thought they were well off or have everything they NEED (and this has been done in the excellent book "Affluenza") it's the people on higher incomes that answer no! So, if we want to stop spending on WANTS (our NEEDS really are few) I believe we must rediscover what gives us a sense of real meaning in our lives, rather than just assuming that wealth will deliver it.

    Regards, Marilyn

  10. I used to be upset that my husband had to take an early retirement (Disability due to extreme environmental allergies).

    However, I am now so thankful that I've learned how to live on less. I remember how hard it was to make those changes but now they are done without thinking.

    We have taken it to another level, though. This Spring, I'm even cutting out most garage sales and thrift store outings. Only when I am looking for something specific do I now go to the thrift store because I can always find something to buy there othrwise. Even if it is cheap, it is still spending money.

    Keep up the inspiration!

  11. Hi Rhonda Jean,

    I feel you've just given me a much needed nudge to look at our family budget again. It's been over a year since I even looked at it. Even though we're surviving, I have no idea how!

    I am trying some things you have recommended in previous posts to convince my husband that we waste too much and that we really can afford for me to continue to stay home with our young children. Like putting the money away that I save from the groceries in a plastic bag.
    Then hopefully it's tangible and more eye-opening for him when I eventually show him how much we used to waste.

    Anyway, thanks for the prod, great post as usual.


  12. Rhonda,

    I can say that being debt-free is wonderful but there are many scary times ahead. We still need to stay on a budget.

    The others are so right about how hard it is not to spend... I try to save a bit each month but it keeps getting harder with gas being so high and groceries are plain crazy:)

    I don't know how many people are living with everything sky-rocketing. I heard that the US gas could get to $5.00 a gallon by Christmas Ouch!

    Many Blessings,


  13. We have lived frugally for so long that I didn't realize my 17 year old daughter has learned the lesson so well. She visited down south and went with her Grandma to the mall for the first time in a year (we live on an island in Alaska--no malls) and she was going to get this and this and this...

    Grandma said she picked the things up and looked carefully at them; some she even carried around the stores with her a bit. In the end she put everything back and came back empty handed. On the way home when Grandma commented "I thought we were going shopping" my daughter told her that she realized that they were things she wanted, not needed and just being around them for a little while satisfied her want. Plus she is so used to not spending money that the thought of leaving all of her hard earned cash in someone else's hands for "stuff" didn't appeal to her at all. :-)


  14. We have been on the fringes of living frugally, but only got seriously motivated a couple years ago when we sensed the "bubble" was about to bust. I'm proud to say now that we are finally thinking about our expenses, but we could do more.

    I second the recommendation for Your Money or Your Life. Still one of my all-time favorite personal finance/frugal living books.

  15. Like many readers, we have been down this road ourselves, to pay off debts (we currently have none) and to save for our first house...

    I had a fascinating "revelation" yesterday. We have a lot of stuff still in "storage" due to us having to move in emergency circumstances. We went by there yesterday to pick up a couple of items and I just stood, looking at so many possessions, boxes, furniture, that we have been living without for 6 months.

    Just goes to show how materialistic our world is, and that, having just the basic needs and our family safe with a roof over our heads, we can survive.

    I am currently teaching my boys, 11 and 8, the differences between Needs and Wants.... and they even catch me out sometimes. I'm very proud.


  16. Thats what I have been trying to tell people for a while now and not many even listen until they are in real trouble.
    The main things is to stop spending and only buy food,pay bills and fuel. The rest you can do without. We have been on a pension for years and are better off now than before. People can't understand how we live on our money but we only buy what we need NOT what we want. I think that makes a big difference.
    Hope the people that emailed you take all this in and do what you recommend as it will help them, it may take a long time but they will come out the end ok.
    Hope things work out for flmom too, hang in there

  17. As always i enjoyed your post. Here in New Zealand, in the last hour or so the petrol just went up to $2.12 per litre. when will it stop. we spend approximately $120.00 per week on petrol and we are very careful but we do have a big car which is my husband's baby.

    sophie in New Zealand

  18. Thank you, thank you so much for this Rhonda. I needed this inspiration and will have a look at those websites you mentioned.

  19. I love the old saying that you have to cut your coat to fit your cloth. The problem is that so many people obviously haven't been doing it! And on an environmental scale, we haven't either.

    I just found an old budget night thread on a bulletin board where a bunch of women were talking about how an income of $100K "wasn't much" *boggle* I somehow doubt they've sorted out their needs and wants!

  20. Great post. I do see a lot of adults I could describe as 'spoilt children'. In fact, I still 'see' things I'd like, think about it and realise if I really wanted it, I'll have to save up for it, not go in debt for it.

    Keep it up!


  21. Once again Rhonda you have hit the nail on the head, a great post, and links to sites that can help.

    On Money Saving Expert there is a Forum one of them is moneysaving - oldstyle, its excellent tips for saving money answers to questions, there is also the daily blog where members have a 'chat over the garden fence'

    Keep up the good work, I love reading your blog, have it on my favourites...........

  22. I agree - fabulous post Rhonda! Now that I am cooking a lot more from scratch I am starting to understand how to put a recipe together and how you can substitute ingredients etc. Having relied so heavily on convenience foods for so long this is a huge stepping stone for me! You are so right that my generation doesn't know many basic skills (which I find strange because many of our mums are so good at all that stuff??). Again, thanks for all your knowledge that you share. Tamara

  23. I always wonder if I'm such a pessimist or if other people who are still big spenders just don't see the same things. My own sister, ravishing about a new house they're thinking of buying, and their current home is even bigger than ours! I don't know, living like that would scare the h*ll out of me in this day and age.

    Christine from the NL

  24. can i please put my name down for the swap??

  25. Thank you for your post. So many people feel helpless, that there is nothing they can do, but there is always some way to cut back, or make do. I always think back to my grandmother's time, without dishwashers, clothes dryers, restaurant meals. We can make do with so much less than what we have, we just have to set our minds to it.

  26. Rhonda,

    I have just made the ultimate sacrifice in order to stockpile, I have put all my quilting magazines on free cycle, they took up 2 shelves in the bookcase in the only store cupboard we have......an enormous sacrifice for me, many of then are old favourites, still perhaps who ever takes them will take up patchwork and quilting and learn to live frugally too.....one can live in hope.............

  27. Hello Rhonda

    We are in the same situation here in Canada. You see people starting to change their lifestyles around and living a more simple frugal life.

  28. Very wise words as usual Rhonda.

    UK bloggers: money Saving Expert has a brilliant budget planner on the site which I would highly recommend you seek out.

    Good luck to everybody in the coming difficult times.

    Much love,


  29. Thank you Ronda and all who made comments. All very timely. I think once a family is committed to a true budget and sees it as a positive thing and not the dreaded "B" word that they will begin to see that there is money there that can be better spent. I was glad to see Dave Ramesy in your post, his program has been instrumental in helping us take control of not only our finances, but our life. His Total Money Makeover is such common sense and was for us at least, easy to implement. Once a person is sick and tired, they are able to go forward and take control. Your website and all that it entails--not just makin' do--but ENJOYING the peace in your life that comes from making do is very inspirational to all of us. Thank you. Also, another inspiring book is "The Millionaire Next Door". Anyone can be one with some effort. It is all within our grasp.

    Again, thank you. I can hardly wait each day to read your post.

  30. Came across this little gem on a website for a super fund tonight:
    "To give you an example of how much you will need in superannuation for retirement:

    3 meals a day
    x 2 retired people
    x $10 per meal
    x 365 days a year
    x 20 years in retirement
    = $438,000 for food alone"

    What planet do these people live on? $60 a day for food for two people?

    And the next line: If you are like most hard working Australians you are also going to want to enjoy your retirement, maybe a European holiday, regular golf, a new car or boat, a holiday house...

    Oh dear, I think I have a way to go yet. :-)

  31. I recommend the book The Two-Income Trap: Why Middle-Class Families are Going Broke by Elizabeth Warren and her daughter (whose name I can't remember, sorry!) EW is a law professor at Harvard University and I think this book states some useful ideas very clearly. Now some of the information relates to legislation in the US and doesn't apply to other countries, but if you can get a library copy it's very worth reading.

  32. I totally agree! We have cut out all of our credit cards and are down to a 10 year note on the house and payments on the truck. Putting savings into the bank and trying to become as self sufficient as possible. Homesteading has become a true hobby of mine. Love your blog!

  33. Yep...things are changing now. It's both far from unexpected to me on the one hand - but astonishing how fast (as in positive breakneck speed) things are changing on the other hand. I am trying to remind myself of the plus sides to this - there will be fewer cars on the road and maybe fewer planes in the air than otherwise (so - a quieter environment and fresher air to breathe). I am glad I got rid of the mortgage and debt - but am still worried I wasnt able to make all the preparations I planned on before this started happening. Am now waiting - and watching - for the British Govt to start giving out large grants towards retrofitting houses, so we arent reliant on the "Grid" anymore for power and hoping they will do so before my fuel bills shoot through the roof if I dont have this retrofitting (that - like many - I have no way at present of affording just left to my own resources).

    Still - I've done what preparation I could manage to do before stuff started going "belly up" - and, being a bit of a political animal personally - will be doing my teensy little bit to remind our Govt that "the personal is political" - so get with those grants and removing VAT from fuel bills and all the various ways politicians could make this easier for us ordinary people in the street.

  34. So very well said, as usual Rhonda. I can honestly say that stopping our overspending and saving our money has been one of the best things we've done for ourselves as a couple (not to mention a family). Money troubles place great stress on a relationship.


Thank you for taking the time to comment, I read all of them. Comments are an important part of my blog because they help build a community here.
These comments are moderated so yours won't appear until after I've read it.
No commercial information or links will be published.