Darren and I have lived with varying work hours our entire married life ( 23 + years ). We've always had a baseline budget to work with and any extra hours has always been a bonus.
At the start of the year when I was doing all the budgets, I thought it would be a good idea to write out an emergency budget just in case we are faced with the unexpected like job loss or illness. When the unexpected happened in the past, we've scrambled as soon a possible to cut our expenses. Having the emergency budget written out has given us peace of mind. We feel prepared for anything now.
The emergency budget is a bare bones budget that only includes the day to day expenses like food, petrol, chemist, and haircuts etc etc.
A starting point was to look at our usual budget that includes the above items as well as direct debits for our new car, Cook Island holiday and local holidays As I went through each item / category, I either cut it out of the budget or cut the alloted amount down to the bare minimum we could survive on.
Of course our holiday and car direct debits could be cut it we need to. There will always be another chance to go on a holiday. My new car is not needed for a few years so we'll have the time to save.
The emergency budget included a heavily slashed present / gift budget. If times were tough, I'd bake biscuits for presents, make items from my material stash or make boxed sets of greeting cards from my paper stash. I've always had an overflowing gift cupboard that could supply presents for a year. Of course there is my jars of jam and bars of soap I could give. This is an area I feel in control of.
Our wardrobes have plenty of clean, well looked after clothes and shoes with new socks and under things bought on sale and stored away. We could easily go a year without needing new clothes. If the emergency budget had to be put into action, clothing would not be included.
Our food budget at the moment is about $120 a month for the three of us. It sounds impossible, but if we needed to we could cut it down to $100 a month and grow more food and eat really basic meals and snacks.
Thankfully we are pretty healthy and rarely need to buy anything from the chemist. Sometimes we have too much money put away for chemist expenses. So if needed this area could be cut down.
We'd cut pocket money right down to the bare bones. In other words, just enough to buy one morning tea per month.
Once I'd written out the emergency budget I'd slashed over $1100 for our monthly budget with a possible extra $200 slashed if it meant the difference between sinking or swimming.
Do you have an emergency budget you can fall back on in hard times ?
Will you consider writing out an emergency budget in the near future ?
Wendy this is a fabulous idea and excercise for everyone to do just in case so if the worst happens we can all transition to the emergency budget.
ReplyDeleteWe have a budget that is fairly minimal anyway as we are paying off a mortgage on our home. I did this exercise too and looked over the budget when we first made it so know exactly what I can cut out expenditure wise in the budget if need be.
Congratulations on keeping your grocery budget so low too which is possible by cooking from scratch and still being able to eat well as we do here.
Have a great week :).
Sewingcreations15 (Lorna).
Hi Wendy, Liz from WA. This is a topic I think about a lot, especially since January when hubby took a calculated risk and accepted a promotion which although came with a hefty pay rise also comes with the higher risk of redundancy. Having been in the mining industry for 25 yrs there have been several occasions when he has narrowly avoided redundancy, strangely always just before Christmas! On these occasions I have always sat down and reviewed our budget. As the kids have grown the budget always changes, and only have one dependent child now which helps!
ReplyDeleteIf the worst did happen, I do always keep an emergency fund which would keep us going for at least 6 months of reduced living costs.
Some area's I would cut back on -
Christmas costs, these would be slashed as I save every month for this.
I would reduce the repayments on the investment property to the minimum amount, freeing up $800 a month.
Food budget which is $200 per month could be easily reduced, and like you would grow more produce, and we would probably live on home grown lamb!
I would sell the spare car, which is a luxury, reducing registration costs and recouping some cash! I'm actually in the process of doing that now.
Education savings for my youngest son's future would have to be postponed!
We do live quite frugally day to day but definitely room for improvement! Some things I would try not to alter would be the insurances, properties, cars and life insurance!
Sounds like a good idea. I'm still interested in how on earth you feed a family of 3 on $120 a month...do you have a link to a blog post on your website. I didn't realize it was this small of an amount.
ReplyDeleteHi Kathy
DeleteYes I am interested too in the $120 for 3 people a month. If I can make it work for $150/$200 a month for 4 of us instead of $700 I'll be laughing.
Wendy has some great ideas that's for sure! Wendy x
Hubby and I have talked about an emergency budget but we have never written one out. We do have a 6 month emergency fund. If Hubby lost his job we could stretch that much further because all extras would be cut. So it would get us about 9 months with basics. My grocery bill is $400 a month but we would just eat what we have. I am almost at 6 months of food storage except for fresh fruit, veggies and dairy. We could get by on $100. If it is when my garden is in full swing even less. Great topic.
ReplyDeleteoh my giddy aunt, I thought I was doing reasonably ok with my money, I don't grow veg or fruit, in fact I've neglected any sort of gardening since the 2011 floods, and I have become a pensioner 13 months ago but find it easy to live off my pension because I am blessed that I no longer have a mortgage ....BUT I feel so lazy - $120 a month for groceries for a family of 3?!?! I spend that much just on myself! I am so in awe of your abilities. so, dust myself off and make time to have a really good look at what I'm doing seems to be on the cards during April. thank you so much for giving me a "wake up" moment, perhaps 8 years is long enough to be asleep.
ReplyDeletecan't wait to see what tips I will find in the future, what a legend you are wendy xx
A good plan Wendy. We have an emergency fund and like you the pantry well stocked to fall back on. But it is a good plan to have expenses we could immediately cut. I keep checking on you for baby news!! xxx
ReplyDeleteHi Wendy I've been reading through your 'food' ideas and how you make $120 work so well for your family. I am interested in meal ideas which I would probably find on your blog. We are a family of 4 adults and a mixture of vegetarian/vegan appetites with only mince and chicken on the menu for the men. I buy vegan beauty products, recycle/reuse where I can and have takeaway once a month unless we are going out for an occasion. We homemake most of our takeaway - burritos, tacos, hamburgers and do make use of leftovers, if any, for other meal times.
ReplyDeleteSo we allow $350 a fortnight for groceries which is not that high really but I would like to cut it back as I don't particularly enjoy spending alot on food because its the meal creation I make that we should enjoy. My son has left school and is on casual wages so he contributes where he can, my daughter has two years left of school and she's being homeschooled so there's no real high costs there.
I didn't mean to ramble all my stuff here but I feel this is a reality check for myself to get tips from you.
Thank you Wendy x