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Tight for money? Here's 5 expenses that I cut back on when I was in that situation...

In my final year of undergrad at uni, I was tight for money but I still had a little buffer room. I wasn't working part time as I'd decided to dedicate the majority of my efforts to my studies, and I was also part of the basketball team. My masters programme was a different story. Once again, completely focused on sport and study, but complications meant that I would receive my postgraduate loan over two years and that most of it would be used to pay my tuition fees at first.

By the time I got to the final 8 months, things were starting to get uncomfortable. I'd found an internship in Paris, but an intern salary can only go so far in such an expensive city. At the same time, I'd began working on my masters' dissertation, so there was really not much else I could have done to supplement my income at this point.

Fortunately, I'd anticipated the possibility of being tight for money ahead of time. As such, I was able to revise my spending habits and adjust accordingly to make sure that I could meet my basic needs, and still enjoy my time as a student without compromising my long term financial health and stability. Here are six expense categories in which my spending habits changed, my reasoning behind the changes, and how it has changed my long term attitude towards my spending in these categories.

#1 - Rent

It might not be the most obvious category, as once we're living somewhere, we seldom think about moving except for relocation or perhaps moving in with someone else. However, for a lot of us this one of our biggest monthly expenses, probably taking between 30 to 50% of your monthly income. In my case, I was moving from city to city and between countries for different parts of my studies, so finding somewhere affordable to live was frequently on my mind. However, I didn't just settle for affordable - I made it my mission to find ambitiously low rents wherever I lived. Here's how I did it:

As my stays in different places were typically short term stays, I didn't necessarily need a beautiful place to call to home - just somewhere comfortable where I could relax and sleep in the evenings and on weekends that had enough space for my stuff. I also decided to live outside the city centres, opting to live in the suburbs. I stayed close to public transport for easy and not too lengthy commuting if needed, and during my studies, walking distance to my University campuses. As a student, I made sure I took advantage of my entitlement to certain benefits. For example, council tax exemption in the UK and CAF (a form of social aid in the form of rent subsidies) in France. In almost every place I lived during these two tight periods, I managed to pay sufficiently low rents to free up some of the rest of my income for other needs.

As a young professional, my accommodation needs are practically the same as they were as a student. After continuing on to work in Paris after my internship, I still live in the same residence that I lived in as an intern. As it continues to meet my needs in terms of space, comfort and ease of travel to work and to the centre of Paris, I see no reason to move to a bigger or more expensive apartment.

#2 - Eating Out / Ordering Takeaway

N.B. I don't typically order a lot of takeaway food, but for those who do, I'll include it in here as some of the same principles for eating out can be applied.

Being part of various social circles, I often receive invitations to eat out. I love a good meal out. I like spending quality time with my friends too. But can you imagine my reaction when at one point I realised I was spending nearly £100 a month on eating out? If you eat out more than once a week, you could easily be spending over a £1,000 a year on restaurant food...

This is a tough one to take in. On one hand, that's a lot of money considering that could be feed yourself for a lot cheaper at the supermarket. On the other hand, there is an important social and relational element in eating out as well, that I think is important for our friendships and relationships. This can be particularly difficult to refuse if there are birthdays, celebrations or impromptu invitations where lots of people will be going. In addition, sometimes it‘s nice to eat quality food and not have to spend time and effort preparing something. Especially you’re not a fan of cooking...

Somehow I figured out a way to make everything in the prior paragraph work! First of all, I set myself an "eating out" budget per month. Something that allowed me to enjoy a nice meal out without spending excessively more on food expenditure than I had to. To account for possible spontaneity, I also assumed that every meal would be self-prepared until meals out were arranged or proposed. At the same time, if I felt that my eating out spend was going up and I needed to stop, I wasn't afraid to decline. Another alternative rather than eating out is cooking and eating in with your friend(s). And for those that have a cantine in University or the office, it can also work out cheaper preparing food rather than eating in the cantine, now matter how cheap it may appear. You don't have to be tempted by those meal deals.

The benefits of this were a lot greater than expected. Despite still tending to go slightly over budget, I've still saved a significant amount of money by being intentional about saving money on food. What's more is that I became a lot more conscious of what I was eating on a daily basis and was able to adapt my diet to make it a little healthier. I also enjoy eating out a lot more, and I appreciate the experience of eating and spending time with friends a lot more than when I took it for granted.

#3 - Transport

I have a driving license, but haven't needed a car and have relied on public transport for many years. Am I not already saving money? How can I save more than I already do?

If a monthly pass is your best and cheapest option in terms of public transport (as it is for me in Paris for example), then you're already doing your best in terms of cheap public transport. What you need to do next is simple. Stick to your transport pass wherever possible. No Taxis, no Uber, no Lime scooters. Find your cheapest and most reliable form of transport and stick to it.

If your public transport options are more based on a tariff system (such as in London, or when I took the bus back in my hometown of Newcastle), then find ways to make your journeys cheaper. Whether its taking the bus in London rather than crossing through various fare zones on the tube or overground which might increase your journey price. Back in Newcastle, I used to walk all the way when I used to go into town rather than take the bus or a taxi at night (I lived close enough for it to not be too far), or sometimes part of the way to buy a cheaper ticket.

For those of us that may need to travel across the country or internationally, if you are not constrained by time and if you don't mind travelling early, from an airport or train station away from the centre of the city, or even taking the train or bus instead of flying, you can save money this way too. And of course, make use of those railcards, student discounts, whatever you have.

Today my travel mindset is a little more flexible than back during the time when money was tight, and as a keen traveller I do like a goof travel experience. Nevertheless, knowing that the objective is to get from point A to point B, I always ask myself if I am able to and want to travel for cheaper than the first options that are shown to me.

#4 - Subscriptions

When money was tighter than today, part of the review to decide what to cut back on involved an audit of my bank account to see how much was going out every month. It was surprising how many subscription services I'd signed up for over the years that I was no longer using, not using to their full potential, or were just not bringing me anything of value that I wanted to keep paying for.

Just like that, I cancelled PlayStation Network which I was too busy to play regularly (£40 / year), Netflix which I wasn't really watching (£6 / month), and I downgraded to a cheaper mobile phone contract (saving about £5 / month). It may not seem like much, but that works out at £172 / year.

When I was deciding what to cancel, it made me realise that I only wanted to be paying for services that were absolutely essential for me, and that I would get my money's worth. Which is why Spotify Premium with student discount was the only survivor.

#5 - The Gym

Depending upon your sporting level, needs or activities, you might be willing to completely cancel your gym membership and stick to cardio, bodyweight exercises and the outdoor gym in the park or near the beach. You might even end up buying some weights or dumbbells to do some exercises at home. But if you play sport at a competitive level or really take health and fitness serious, you may want still want to invest in going to the gym.

During my final year of undergraduate study, the gym was included in my basketball membership fees for the year, so it wasn't really something I gave much thought too. When I went to France however, I needed a new gym and money was tight. I took on an investor's mindset and looked for what I could pay the least for that would give me the best "return on investment". In gym terms - somewhere a low membership fee that allowed me to regularly access a good range of free weights, weight machines and cardiovascular machines to be able to improve my fitness. The gym I ended up signing up to offered a significant discount for paying for the full year up front, and I saved over €100 by signing up for an off-peak membership. It meant (and still means) waking up early to go before work, but the health benefits and financial savings are worth it for me.

I've since been tempted to upgrade to a different membership, and even switch gyms. But honestly, I'd be paying more for practically the same health benefits.

Where am I now...

Today, I have a full-time job and I'm in a better financial situation than I was during these two seasons of my life. I could get a nicer, bigger apartment. I could eat out more if I want to. I could go to a better gym. Despite this, my spending habits haven't changed much since I started working.

Though it was neither easy nor pleasant having to be tight with money over several months, it served as a lesson and helped me to reevaluate my attitude towards spending money. I realised what was really important to me, and what wasn't so important. I learned how get what I wanted or needed for cheaper than I was paying before. I learned how to make the most of what I had. For me it's not about being cheap, its about understanding your priorities and having control over your finances and doing what you want to do with them.

Whatever your financial situation today, I truly believe that anyone who reads this article can take something away. The changes I made allowed me to survive without compromising my long term financial situation. The lessons that I've learned have stuck with me, meaning that I can save and invest more income today to build a better financial future.

What expense categories would you cut back on if you were in a similar position? Do you have any of your own tips or advice that others could benefit from? Leave us a comment with your thoughts!

Millennials With Money exists to provide personal financial education to Millennials and young people, and build a community of people who are motivated to creating long term financial health.

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