Tightening your financial belt

The Budgeting Series

Introduction – tightening your financial belt

*NOTE: This is part 5 of a series on budgeting.* ***Updated for 2023***

If you have missed the previous articles in this series, I encourage you to read them before moving forward – they are in linear order for the reader’s sake:

Ever feel like you don’t have enough money? (Seriously, who doesn’t?) Have you ever wondered where your money went? You get paid on Friday and by Monday morning (or earlier for some) we are effectively broke. We joke about our circumstances to diffuse and deflect, but we are still broke – and will likely repeat the same pattern again and again. Have you wanted to change but didn’t know where to start?

Additionally, as we view the COVID-19 pandemic in the rearview mirror, it has become even more important for people to trim their budgets wherever they can. That’s where this post comes in.

Unless you keep track of every dollar you spend you likely are spending more than necessary. Wouldn’t it be nice to have some margin (extra money and some cushion to boot) in the area of finances? For my money, I believe every person should have a budget, and if you haven’t yet, read Budgeting 101 so you can get a grasp on your finances. You HAVE to know where your money is going before you can reign things in, after all.

Well, this post is going to focus on tightening your financial belt – with some specifics from a trades point of view. There are some challenges associated with finances that are applicable across the board but let’s face it: skilled trades have unique challenges we must consider. Take for example the shifting work which sometimes besets guys in the trades. For many, the moment they step foot on the job they are working themselves out of one.

If you can’t see the light breaking through financial dark clouds, consider tightening your financial belt

There’s no complaint here, either; it’s just the way it is. A lot of guys enjoy different job sites, different scenes, and different types of work. For many, the reality is a dynamic and ever-changing landscape – and they like it.

It’s not without its challenges, though. Finances have to be handled differently. Someone who travels, changes jobs frequently, is employed by several employers, etc. has to develop a different plan than those reporting to the same place day in and day out. Someone telling you differently doesn’t know what they are talking about.

But for many of us, a lifestyle has emerged while navigating the waters of skilled trades. We know how to pay our bills, get by with the money we make, and hopefully treat the debt monster like the powerful beast it is. (Steer clear!)

What we need, then, is to pay our bills more effectively and to maximize our money – not merely spend it recklessly. We need to monitor our money better. We need tools at our disposal. We need to tighten our financial belt.

I thought about this for some time in an effort to be relevant – throwing around worthless information/advice only helps the one giving it. That’s not my intent here. I want what I write to be relevant and useful. In light of that, I’ve come up with a list of things I know many could use/do in an effort to tighten their financial belt.

And when you do you’ll discover you have more money than previously thought. It doesn’t just appear out of nowhere; you just aren’t hemorrhaging it anymore. It’s interesting how that works. Think about the overtime you work and how fast it is spent – many times it’s effectively gone before you are paid for it. Why? Because we aren’t actively managing our money; we’re passively managing our money and actively spending it.

Tightening your financial belt can be painful – but extremely beneficial for your financial health

Enough introduction. Let’s get to the meat and potatoes of this article. Below, I’ve listed some ways that I personally tightened my own financial belt and others that I know have done the same. I’d like to say this is buffet style – take what you want and leave the rest – but that’s not quite accurate. I implore any and everyone reading this to seriously consider implementing all of these (as they are applicable) to maximize your return. I mean, if we are after a way to see more from our paycheck it won’t do to simply do one thing when more discipline equals more yield.

Let’s look at a quick list of things to help you tighten your financial belt and improve your financial prowess.

Quit going out to eat

For many, going out to eat is one of their largest financial drains

The first on my list, and for good reason, is to quit going out to eat. Do you know how much money food costs? If you’re like me, your wife takes care of the grocery shopping. I don’t get involved except making requests and carrying the groceries in (best believe I’m carrying ALL the bags in on one trip) but every now and then my wife talks to me about it. Food for one person is one thing, for a family of 5 it’s another. Food is a necessity and a costly one to boot. What’s amazing, though, is how much we spend on the convenience of eating out.

The Bureau of Labor Statistics for the year 2015 estimated that Americans spent around $7,023 on food and $4,015 is food at home. If you’re doing the math that means a $3,008 difference – or 43%! Essentially, Americans are spending nearly half of their food budget eating out. That’s A LOT.

What’s more and just as amazing, is a study Forbes cites, asserting you spend about FIVE TIMES for a meal at a restaurant you could have at home. WOW.

Now it’s not my intent to come crashing down on the industry – especially when COVID-19 has done great damage. I simply want to point out what the costs are comparatively and get you thinking. Nor am I saying quit going out to eat altogether – just realize the true cost. When you do, it’s eye-opening for sure. What could you do with that extra money if you went out to eat half as much?

It’s expensive to eat food, period. When I consider my own bills, only the mortgage and savings are higher than the food costs. Even so, we periodically enjoy going out to eat and are sure to reinforce what a privilege it is to do just that with our children. I also feel like we enjoy it more when we go out to eat, too since we limit it.

Chances are if you are looking for ways to save money and tighten your financial belt this is an area most could improve on.

You will save money. Losing weight though? Meh.

Quit going out to drink/socialize

If you’re serious about cutting back costs, this is a sure-fire way to roll some back

I never was one who frequented the bar; I always thought it was crazy to buy two beers at a bar when you could purchase a 12-pack instead and enjoy it at home. People have their reasons for going and spending but it’s WAY more money than I care to spend.

I bring this up because when we couple going out to eat with going out for drinks we have a very large drain on our financial resources.

I worked with a guy one time who would balk at an $8.00 breakfast but wouldn’t bat an eye at a $100.00 bar tab. It’s a matter of perspective and importance at this juncture. Still, it’s worth noting the cost of going out and socializing can be high and prohibitive for many.

Yet, I know people who do this at least once a week; many visit on a more constant basis. The thing is, this fount of spending has the ability to outpace that of eating out for some. If this describes you you would do well to control the monster of overspending. Take the time, count the cost, and see just how much you spend in this area. You may be surprised at just how much of your income is going down the drain here.

Cut the cable/streaming platforms

If you are tracking things, you would be amazed at how much money you are spending on cable/streaming platforms

Some might find this strange but I have never had cable. No satellite, either. I found it to be cost-prohibitive when I weighed out what I actually watched. Well, that and I was B.R.O.K.E. when I started out. I was very familiar with being house poor back then.

And besides, we’ve all heard the complaints before. The cost vs what we actually watch. Most people watch a set few channels but have several hundred at the click of a remote. At some point you have to ask yourself are those few channels worth the cost?

*I need to state this caveat, though: I’ve never watched that much T.V. anyway. Usually when I say this most people say the same thing; you see, the amount is subjective. I always follow up with something like, oh, I only watch about 2 hours a week, if I’m lucky. The reply I get? Well, we watch a little more than that.

Why do I interject this? Simple: I watch so little it makes the decision very easy for me. Again, the decisions of how you tighten your own financial belt are always personal. Now back to your regularly scheduled post.*

I was talking with a guy some time ago who told me his bills collectively for television entertainment ranged $200 – $300 a month. He had cable, satellite, a firestick that was jailbroke; all in pursuit of entertainment. The worst thing is, he was sort of complaining about the cost but was complacent enough to not do anything about it. And I’m willing to bet the entertainment gurus know this.

Another friend of mine complained about paying $300 a month for satellite – but she decided to do something different. I don’t recall the name exactly but for a one-time purchase, she gets a lot of entertainment. She weighed it in the scales and satellite was found wanting.

Again, I hesitate to say it’s a buffet here, taking what you will implement and leaving the rest. Coupled together, they all have the power to really change the direction of your finances. The things listed here most can easily identify with and trim – should they want to. It’s about intentionality.

If you want to see some alternatives for the standard cable package check this out here.

Alternatively, there is another strategy that can be utilized here – should some form of entertainment be a necessity for your family. Emerging with regularity are the numerous streaming platforms – Hulu, Netflix, Amazon Prime, Vudu, Disney Plus – and many more I’m not going to write out. Each offers an abundance of content as well as entertainment only found on their platform. We have access to many of these ourselves because various family members pay for them and then share the access with us. A prudent and shrewd family could distribute the costs similarly and reap the benefits – with minimized costs. This would be a step in the right direction toward tightening your financial belt.

Quit Smoking

Cigarettes are a considerable cost when you add it up

Yes, I know – I’m meddling here. Still, there is no denying the cost of smoking cigarettes is high – prohibitively so for those who truly want to tighten their financial belt.

This website has an amazing cost breakdown on average by state. They noted the average cost per pack nationwide was $6.65 and if two packs a week are smoked that’s $688.00 a year. That’s the average nationwide, though. The cost of states varies widely. In New York, the cost per pack is $10.47. In Virginia, it’s $5.86.

All things considered, what could we all do with an additional $700 a year? It doesn’t seem like much when we are paying for that pack but the cost, as we can see, adds up. If you are looking for a way to tighten up your financial belt, especially after the effects of COVID-19, this is a way to save some dough for sure.

Quit Drinking

Not partaking can definitely help you tighten the purse strings

Since I’m on the subject of quitting something, I’ll add quit drinking, too. It may cost less to drink at home as opposed to socialized visits but the cost is even higher than cigarettes. I know this because I enjoy good beer at home. I’ll save my opinions of what constitutes great beer here but suffice it to say it’s costly. I haven’t done a cost analysis but I’m willing to bet it’s TWICE the cost of cigarettes. This notch on the financial belt is one I haven’t personally conquered – I like to enjoy great beer, after all. Moreover, I think a little transparency goes a long way, too. I advocate for adapting as many of these as possible to tighten your financial belt and if you do they have the power to change your financial legacy. The same applies to me as well as the readers here.

If you enjoy adult beverages cutting back or cutting them completely is definitely a viable option for tightening up your financial belt.

Cut back/eliminate vacations

Vacations – like going to a beach – cost money and are another way to throttle back spending

I know people who almost never take a vacation – they would tell you they don’t have any disposable income to take off work and go somewhere. On the opposite end of the spectrum are those who take a vacation whenever they feel like – money doesn’t matter to them. A simpler translation is they take a vacation whether they have it or not. They have no problem charging their vacation to that ever-convenient piece of plastic.

The problem, of course, is that the money has to be paid back at some point. And, if you are one of those individuals who hardly ever takes a vacation, it could be because you have money tied up elsewhere. Moreover, I’d want to ask this question: Who enjoys a vacation better – the person who paid for it all in cash or the person who will be paying for it months afterward? The question is rhetorical – we already know the answer.

If you do have the money for a vacation, postponing or eliminating it is a viable way to tighten up your financial belt.

Get rid of your credit cards

Credit cards are sneaky – they can lock your money up for months and/or years if you let them

Talking about charging your vacation is a good segue into this next point: getting rid of your credit cards altogether. If you really want to tighten up your financial belt, getting rid of your credit cards is a superb way to do it. The reason? Much of your financial health is directly linked to behavior and not circumstances. You can read my article on The Principle of Behavior and Not Circumstances for more information but I’ll say this here: Do not dismiss that principle because your knee-jerk reaction is negative. Forgo your preconceived notions and bias, read the article, and let the truth change your mind.

Don’t believe me? How much would you charge on a credit card if you didn’t have it? Hint: none – you couldn’t. There is a very real reason why credit card debt is second only to mortgage debt – at a whopping 1.04 Trillion – with a T. (Student loan has now eclipsed credit card debt, currently standing at 1.7 Trillion). There are a lot more statistics concerning credit cards along with the debt that surrounds them and this is a good place to start.

The takeaway, no matter where you fall in the spectrum of credit card debt, is that most cannot control their dependency and therefore should get rid of the pieces of plastic. The principle of removing the temptation is at play here. After all, why would you give someone who cannot control their spending cart blanche with a piece of plastic? Instant gratification may be the mantra driving the nation but it doesn’t have to drive you – there are other alternatives. It’s my personal opinion that this one action alone can make more headway in tightening a financial belt than any other on this list. If you have the discipline to cut the plastic out of your life and live within your means then you are far ahead of many others already.

Conclusion

The skilled trades are a venerable profession; noble, honorable, worthy of our admiration, and desperate for advocacy. The last thing I want to see are many turned away from a fulfilling career in the trades because of a lack of financial preparation. Those of us who have been in this game for years now understand the difference between them and those in an office. Understanding this difference, though, is half the battle. More important is acting on the differences, demonstrating the viability of the trades, and tightening the financial belt for all to see.

For my part, it’s not enough that the skilled trades are a great place to earn a tremendous amount of money. After all, if you are living paycheck to paycheck it doesn’t matter how much money you are making. The better tactic is to tighten your financial belt and really augment the skilled trades for others to see.

It may seem daunting now but you eat an elephant one bite at a time and that’s exactly how you can tighten your financial belt – one notch at a time. Let’s get at it, then!

Lastly, I’ve taken the time to break down the articles for the budgeting series I am putting out and put them in linear order – one builds on the next. Here they are: I’ll amend articles and include this list at the bottom of each, making it simpler to navigate from one to the other.

*NOTE: This is part 5 of a series on budgeting.*

Tightening your financial belt

The Budgeting Series

Introduction – tightening your financial belt