Tightening our belts

Torsten and I are lucky. So far we haven't felt any of the effects of the recession, at least not directly. Maybe we feel it obliquely, through the decisions we make or don't make in a tight job market with the ever-present threat of layoffs--but otherwise, it hasn't really affected us.

But still, we want to be careful. We spend well within our means, and all the extra that we save goes into an FDIC-insured money market account that accrues interest at a low but steady rate and allows us access to our funds at any time. We haven't touched our 401(k)s, and we aren't worried about them--we have youth on our side, and figure that the market will go up and down a million more times before we need to start relying on our retirement funds.

We are lucky in that we earn more than we need to spend, and we have very few financial obligations, relatively speaking. But we are still trying to cut back on our spending, to pad our savings account as much as possible. Both of our jobs seem relatively secure, but I suppose you never know, and it's nice to have a backup fund. And if we don't need to rely on the backup fund for backup, it will be used as a down payment fund instead. We are lucky in that respect too--first-time home-buyers in a buyer's market. We are the injection the market needs, apparently. And we want to give it. But not quite yet.

So there are a few things that we are trying to do in order to save money:

• Bringing lunch from home. I know, this is the tip that everyone gives, but it really makes a difference. It basically costs nothing--just add a bit more food into the meal you're cooking the night before, and you've turned one meal into two. And I don't know about the rest of the country, but a quick lunch at a sandwich shop in DC can easily add up to nearly $10. That's a lot of money over time.
• Similarly, we're going out to eat less. This is also part of the whole healthy living thing, but it's amazing how fast the cost of restaurants adds up. And also, after our two-week honeymoon, we were both really craving healthy home cooking, so that makes it easier.
  
• Not tempting ourselves. Perhaps this is the silver lining of living in DC, which doesn't have great shopping and forces you to go to the suburbs for a shopping mall. If I go to Macy's, I can drop $100 very quickly. If I don't go there, I don't spend the money. Simple as that.
  
• Not going to the grocery store as often. The trick here is to actually use the stuff you have sitting in the cabinets and the freezer, instead of telling yourselves that the cupboards are bare and therefore you have to go out or order in. If we go grocery shopping, we inevitably add things to the cart that we don't really need--snacks or fancy drinks or magazines, and the tab really adds up. And we gravitate toward the new food we've purchased instead of eating what we already have. Not grocery shopping every week really helps us keep our bills down.
• It sounds obvious, but no impulse purchases. I have the one-click purchase option on Amazon turned off so that I have to think a tad bit more about things before buying them. When I shop online, I put things in my shopping cart and save it to come back to later. And often I talk to Torsten about stuff I'm going to buy before I buy it, so that we can consider if we really need it. Bouncing ideas off each other makes it really easy to realize that you don't need something you thought you did.
• Playing the credit card game. This definitely won't work for everyone, and I know that a lot of people say that if they spend only cash, it helps them cut back, but for us it's the opposite. When we have cash on hand it tends to fly out of our wallets, and tempt us to do things we wouldn't otherwise do, like take cabs. We have a bunch of credit cards with different rewards--for purchases at stores we shop at a lot, or travel or restaurant or grocery purchases--and we make sure to always use the right credit card for the right type of purchase. And then, and this is the key part, we pay them off completely every month. Otherwise the interest you pay by far outweighs the cash-back rewards.
  

So tell me, are you feeling the effects of the recession? What are you doing to make sure you can make it through?