When I started actively paying off my debt six months ago, I had to significantly cut down on my day-to-day expenses to free up as much cash as I could. Long gone are my morning lattes, beauty and fashion magazine subscriptions, express manicures during my lunch hour, afternoons at fancy hair salons, dinners at exclusive London restaurants to name a few… all gone.
It was time to learn the art of frugal living. To cut back even more, I moved out of my expensive riverside London flat that cost me 42% of my basic take home pay every month and temporarily moved in with my sister. I am renting on my own again but this time I was looking for something that would not exceed 33% of my basic take home pay… and I succeeded! Oh, and my new flat is just across the road from my old place, so it’s still very much riverside.
I’d say that my living expenses currently eat up about 57% of my take home pay every month (my commission from sales or side income not included) and leave me with about 43% to allocate towards my debt and savings. I would ideally like to reduce my living expenses to 50% of my basic take home income and allocate another 50% towards my debt and savings. As a side note, all my extra income (a rough estimate of £3-4k each year) will be going towards two funds in the New Year: emergency and travel. More on this soon.
Given the title of this post, you probably know where I am going with this. I am still looking for ways to free up some cash in my existing budget. Seriously, when does one stop? Transportation is the second highest item of expenditure in my budget after housing costs. I am fairly lucky in the sense that my employer pays for my annual travelcard – and in turn I pay it back in 10 months interest free. This little arrangement has saved me £234/year or £19.5/month in 2013. My commute is about 40 minutes door-to-door on a train each way.
Now, I can save even more money next year. By switching to a bus (before you ask – I am not even considering riding a bike to work as the traffic scares the hell out of me). By switching to a bus, not only will I be saving £234 but I will also be making a further saving of £432/year or £36/month. As tempting as this sounds I have to take into consideration the fact that my commute will more or less double in time. Instead of 40 minutes door-to-door, it will take me 1 hour and 10 minutes each way to commute by bus, or an additional 40 minutes every working day! What is more, there is a strong possibility that I will still have to occasionally take a train and assuming it will cost me no more than £10 each month, the monthly saving will only be £26…
So here’s the question – is it worth it?
Yeah, I didn’t think so… I have given this some serious thought, and I have realised that a saving of £26-36 per month is not worth 13-14 hours in extra commute time! And although I won’t be switching to a bus after all, I have come up with a little goal… namely, to make an extra £36 each month to make up for this “potential loss” in transportation costs.
What would you do? Would you switch to a bus to save a bit of extra cash or would you not go that far?