Cutting the Budget When It's Already Cut to the Bone

"I know I have written to you before asking for help but Disaster has struck since my cancer diagnosis and we are on one wage which only just keeps a roof over our heads.  I am reading and re-reading your books and website info which is helping. But I have debts that I want to kill and then have savings so that if the Big C comes back we are not in the poo again.  How can I cut back even further? I have been to the banks and utility companies to re-jig things. I now pay by the fortnight for my gas and electricity and so that is not a problem.  Is this the way to go?  I hate having to go to the charity organisations for hand outs but I have had to do this at times. I hate asking for help. Did you ever have to do that when Disaster hit you?" (I've kept this anonymous to protect privacy)

When I read your email, my heart broke for you. I will never forget the feeling of despair, when money was tighter than tight and it felt like we were never going to survive, let alone get ahead financially.

It is so very hard when you feel like there is nothing else to trim, let alone slash, and yet you're still barely treading water.

Here's how I coped: I focused on the things I could control. I was pregnant, we had two little boys, half a house and a whopping great mortgage (actually it was only the interest rate that was whopping, thank goodness).

There is always something you can do, even if it's just choosing to only cook enough for each meal, with absolutely no leftovers. Or to just drink water or milk for a month (amazing how much that will save you, even if you just give up tea, coffee and juice or cordial - it's not a huge amount but it could be enough to pay off a bill).

Look at what you are doing and how it is helping your family. Letting the despair control you won't get you anywhere; it makes you feel worse and like just giving up. Don't do it! When you give up your chances of ever getting back on your feet, let alone ahead, are almost zero.

Instead keep plugging away, little by little.

I know you have children, so get them involved. Let them learn from you that you control the money, it doesn't control you. That can be hard, especially when you see things you want them to have. It's your job as their mother to make sure they think of themselves as rich, rather than poor. If you need to change your attitude then do it, and do it quick smart.

Find things to do with them that don't cost any money. Look for things you can do together. Teach them to cook. Let them help you make dinner each night, or treats for their lunchboxes. Instead of going out, let them have their friends over to watch a movie and eat popcorn or pancakes or for sleepovers. Make your house the fun house to be, where all the kid want to come to play.

Take this opportunity to turn your life around and make it better. I think the phrase "bloom where you're planted" suits here. Look at your attitude. If you are feeling poor and hard done by, then you will be miserable and pass that on to your family. Instead be content with what you have: a family who loves you, a roof over your heads that you can make into a home, an income, friends, the best country in the world to live in.

That doesn't mean you have to stay right where you are now, it just means be grateful you have those things. Choose the things that are important to you.

We had to. We took a long hard look at the way we were living and decided a lot of our expenses weren't really what we wanted, let alone necessary. We ditched those things. We stopped going out to eat. I cut back on playgroup days, instead having everyone come to our house. I supplied the tea and coffee and the other mums took it in turns to bring the morning tea and craft activity for the kids. I learned to cut hair. We walked to the park rather than drive (when the boys were old enough we rode our bikes). We stopped buying brand new clothes for the kids (I learned to sew and made a lot of them), instead haunting garage sales and op shops (I found garage sales better quality) for their clothes. I could buy brand name clothes in almost mint condition for 50c or $1 a piece. For $10 I could outfit a child for a whole season. And if I was careful and looked after them, I could sell them and recoup my money, meaning it cost me nothing to keep my children clothed.

On that note, look for ways to increase your income. The easiest way to pay down that debt and get ahead is to increase your income. Can your husband take on a part-time job? Wayne worked three casual jobs for four years to keep us going. I taught embroidery classes in our loungeroom twice a week. It won't be easy, but it is only for a short time. Have a garage sale. Get selling on eBay or Gumtree. Do you knit or sew or crochet? Can you make things to sell? Hand-crafted items sell like hotcakes on Etsy.  Just be sure to use this money to pay down the debt, and once the debt is cleared use it to build your savings.

There is no instant solution to your problem. You didn't get into debt overnight, and you won't be out of debt overnight.

It isn't easy. It will take a lot of effort and a lot of sacrifice. But it's only for a short time. It's not forever. Keep that in mind and keep plugging away and little by little your debt will disappear and your savings will grow.