Voluntary Simplicity Step 2: Making Your Money Work For You

What does this mean? In a nutshell, it means taking what you have monetarily and getting the most out of it. Almost everyone reading this post either currently works or is retired from working. Those same people have or are working for a financial goal. Typically the goal is to pay the mortgage, household expenses, some entertainment, a vehicle, gas for the vehicle, savings for retirement, etc. Additional financial goals may include paying off debt, putting yourself or a child through college, and/or becoming financially independent.

When you are working for a monetary goal, you want the money you’ve worked so hard to earn working toward that same goal. Spending money mindlessly does not help to achieve that goal. If you don’t know what you’re spending your money on your money is not able to successfully do its job. You need a plan for your money. The biggest motivation for me personally, is to get more control over our life. If you can get a hold of your financial life you can better determine where you’re going and how you’ll get there.

Have you ever thought of taking a job because the salary is hard to resist, regardless of whether or not it will make you happy? Have you ever been in miserable in a job but can’t financially afford to leave? Do you get upset that it takes two paychecks to make ends meet? It’s time to re-evaluate your earnings and spending. This isn’t about deprivation but rather spending wisely and making every dollar count. Spend with purpose.

How many times do you get to the end of the week and wonder where all of your money was spent? One dollar here for coffee, five dollars there for a magazine, five dollars for a fast food lunch, three “quick” trips to the grocery store where you purchase what you need and then some and so on. It’s very easy to mindlessly spend money particularly with the convenience of debit cards.

Another very difficult question to ask yourself is, how much money have I earned in my working years and what have I got to show for it? Has my money worked effectively for me? Of course you can still spend frivolously but assign a number to what that will look like. If you make a budget too rigid chances are you won’t stick to it. Don’t let another week go by where you aren’t sure where all your money was spent.

So what should your money do? In step one of Voluntary Simplicity I wrote about starting with tracking your spending so you can determine where your money is being spent. I also suggested using the envelope method for budgeting your money. You want to establish a budget that works for you with these things in mind:
• You need basic necessities (i.e. mortgage/rent, water, heat, gas, food, etc.).
• You need a budget for enjoyment (i.e. clothing, entertainment, coffee, etc.).
• You should create an emergency fund that liquid and available if immediately needed.
• Excess can go into an interest-bearing savings account.

Some examples of ways to spend less and save more include:

  • Make lunches at home to bring to work during the week.
  • Use coupons for grocery shopping and check the weekly sales flyers. **Be careful, however, to only use coupons for items you need and/or would typically buy. If you purchase something only because you’ve got a great coupon, that doesn’t mean it’s saving you money.**
  • Before running errands think of all the places you need to go to save gas and time.
  • Weekly or monthly grocery shopping. This helps your money work for you in 2 ways – 1. you are planning your shopping, therefore looking at flyers, bringing coupons and determining what your needs are and 2. the more times you stop at the grocery store, the more chances you’re purchasing mindlessly as well as wasting the gas and time to go.
  • Break the habit of no impulse purchases and think about each purchase (Do I need this? Do I want this? Do I love this?) prior to making it.
  • Eat at home and prepare food from scratch.
  • Start a garden and preserve your harvest for meals throughout the year.
  • Think of your purchases in a new way – how many hours of work does it take to purchase this? For example. If I want to buy a new pair of shoes that cost $65.00 and I make $15.00 an hour I have to work over four hours to pay for those shoes. Are they worth it? Another example is going out to dinner. If I make $15.00/hour and my husband and I go out to dinner and with tip it costs us $60.00, not only do I have to work four hours to pay for that dinner, but that’s also half of our weekly grocery budget spent on one meal. It makes a difference when you look at the big picture.
Savings, wherever you can find them, means you can put more money to work toward your short-term and long-term goals.  What are some of the ways you make your money work for you?

To read the entire Voluntary Simplicity Series, click {Here}


TexWisGirl said...

I love your last point the best - great way to look at spending as "how many hours???"

I am blessed that I don't like fancy clothes, fancy restaurants (alto I always enjoy a good meal out), fancy cars, or much of a fancy life. I've also been blessed to have had a good head on my shoulders when it came to money and budgeting and scrimping. I use coupons, I plan grocery lists and chore lists for trips into town, my "splurge" spending occurs at places like Dollar General, Family Dollar & Big Lots. My life is rich here at home so I don't need too much else to make me happy.

My hubby, on the other hand... He shops one meal at a time, gets bored at home so runs to town often, buys (a few) expensive toys for me and himself, but all in all, I've taught him to be careful.

Staci at Life At Cobble Hill Farm said...

Thanks Theresa. My husband is similar. He likes to run errands. His errands tend to cost us a bit of money because he always finds things he "needs".

Lizzy Lane Farm said...

Well put and gets me thinking again.

Another thing I try to think about is buying in bulk if the cost per unit is not higher than smaller options. Bigger is not always less.

And, I try to use tasty recipes tried and true that use less ingredients and more basic ingredients. Say milk and sugar over condensed canned milk. Less to stock in the pantry.

Had to chuckle over the point of working 4 hours for a single meal, and don't forget there are no leftovers for later.... :)

Thank you so much for sharing this with us.


mountain mama said...

yes, great points, it's taken some adjustments, okay, a lot of adjustments but we do just about everything you suggested.

great post!!!

Staci at Life At Cobble Hill Farm said...

Karyn, so true. You really have to calculate to ensure buying in bulk is worth it. Great tip. Thanks Mountain Mama - yes it does take some adjusting to (and slipping back into old habits), but if you keep the goal in front of you it's easier to keep plugging ahead. :)

Unknown said...

I completely agree, when you look at how many hours it took you to get that money suddenly it doesn't look as tempting.

Was wondering and found your blog, looking forward to reading more.

Staci at Life At Cobble Hill Farm said...

Thanks Valerie - glad you found us!

Jamie said...

Hi there I just came across your blog from the Barn Hop.I love it!!!I have been reading for 35 minutes now.I am going to add you to my blog under Homesteading blogs.

Please stop on over for a visit and read about my family of three learning about homesteading while raising chickens and homeschool.

Staci at Life At Cobble Hill Farm said...

Welcome Jamie! We're so happy you've found us.