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27 Aug 2011

Cutting the Budget

Nothing raises you from your financial sleep like a loss of a job or salary. I would love to think that I am generally reasonable with my finances. I can do with a bit of budget cutting as I am bordering the shopaholic and the financially responsible. I wish I were more to the frugal side but I gave up on that frugal lifestyle dream long ago. I just love jewelry and bags and shoes too much to let go of. To rub salt to my open wound, I looked back to my working day balance sheet to see what has changed in my personal finances, since.

Its a bit scary to see how much I shopped and shopped. Mainly for food and for my closet. The more my real estate passive income increased, the more food I seemed to buy. That is apart from my growing taste for everything costly. I still cant stand a cheap rug and cant do without my rare find antiques. The sad part is that, I cant do without all my style pieces, even after I left my stable income. The past week was about me looking back and hopefully learning from my spending patterns. I shop for food more than an average person. I hardly ever eat out because my family is quite particular with what they eat and how its prepared. Its a blessing that everyone in this family loves cooking..

Here is the list of things that I will never give up, unless absolutely necessary:
A good laptop
High quality coffee
A spacious home
Jewellery and handbags (an investment from my grand-kids)
(edited to cut out rubbish)
Antique furniture
Travel (apart from annual visits to our two sets of parents, travel is our only form of indulgence. We do that with cash, never on a credit card.)

Things I have cut on
Stilettos (being at home, I have limited places to wear these)
Formal wear (I buy too much tracksuits though)
Car Gas
Hair Salon (believe me, when staying at home, your salon visits get to be further apart than when you have a formal 9-5. I find my beauty salon visits have also become far apart.)

Opportunities for Cutting the Budget to Save and Invest:
1. Magazines: I bought one this month because my friend's business was featured. I have canceled all subscriptions but I spend more on magazines that I never get to read now compared to when I was subscribed. Why do I keep doing that? I have no Idea. I decided to have a magazine fasting for 3 months. That's about $30-$50 extra per month.
2.  Home decor supplies. I think my house is OK for another year. Except for a really good antique or vintage piece here and there.
Savings of about $30 per month.
3...
I didn't think this will be this difficult, I seem not to be able to see where a full $200 will come from. That's what I need for a "budget cut" investment. I know I have a $200 that is wasted somewhere in my budget. I just have to dig deeper. When I looked at the past years spending, I was a bit ashamed of myself. My beauty product spending alone was a little crazy. The fact that I don't eat out didn't equate to any savings. My food budget is always out of hand because I love guests and entertaining. The deal is, I pay with a debit card for everything, no credit cards. I make money and I spend it.

As for the rest of the budget, I am happy to know that I give enough gifts every month. It makes me feel less extravagant. Charity work is also something I love doing now and then. 

If, like me you love shopping, get more automated savings and investments. Apart from my real estate investments, I have a couple of other investments to lock some of my money out of sight. I have all my retirement and life insurance policies too. Its wiser to pay yourself first, and I see no better way than saving and investing. Let me know if you have any plans of cutting the budget to save and invest too. I would love to learn from your plan.

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