Thursday, January 20, 2011

Reduce Reuse Recycle

I know what you're thinking, and no, this isn't about cans and bottles. It's about money. I've been trying to employ the 3R's into my financial life as well as with items at home. Hopefully I can keep both of them out of the trash? Here's how it works:

Reduce - Your Expenses
Reuse - Your Expenses
Recycle - Your Expenses

Okay, so they all say the same thing, but it's actually two different types of expense I'm talking about. I'll explain.

Reducing expenses is fairly self explanitory, almost everyone reading this blog is trying to do the same thing. In my grandfathers words:

If your outgo exceeds your income, your upkeep will be your downfall.

I like that saying; it's catchy and it gets the point across. If you want to keep more of what you bring in, you have to figure out how to spend less of it. Sometimes it's as easy as keeping track of where it's going, sometimes it requires painful cuts and changes in lifestyle and expectations. Mine required both: I needed to track where my money was going to see that I needed to adjust my lifestyle and expectations. I don't use any fancy accounting programs or online software, I use plain old Excel. Or on my home computer, Numbers. Pencil and paper works fantastic here too.

Reusing expenses is one that I've actually been doing a fair bit now that I think about it. The most recent example of this was this semester's university tuition. School is expensive, and I didn't have $2000 sitting around waiting to be used on courses and books until work reimbursed me in May. So, we got work to reimburse me as I was paying out of pocket, rather than at the end of the semester. My first expense was $250. When I got that money back I added a little more to it and paid $300. Then $400. Then $450. I snowballed the same money onto my university tuition until it was completely paid for with minimal pain. Same with my medical expenses; as I pay out the money and get reimbursed for it, the money will be put back in the medical envelope to be reused the next time I need medication.

I've done the same thing with a $25 microloan I made while I was in university. I had been reading about microloans and how they were giving a hand to people that the banks wouldn't lend to due to the size of the loan or not enough credit history. I signed up with Kiva, who seemed reasonably reputable, and donated $25 to a young woman in Tajikistan to start a business. When that money was paid back, I donated it again to a young woman in Ukraine. It will be paid back again soon, so I'll be able to lend it to someone else. It's like the charitable donation that keeps giving.

Recycling is easy; once something has outlived it's usefulness, turn it into something else! My last tuition expense reimbursement should be sitting in my account tomorrow. Rather than saying "Yay, free money!", it's going towards my internet set up costs and a big credit card payment. It's going to feel so good watching that sucker get knocked down another notch! The hard part here is avoiding the "Oh perfect! Now I have money and I can buy ________." or "Now I have money for Starbucks this week!"

No. I. Don't.

I have money that can be used towards my goals, not instant gratification. Isn't that what got me into trouble in the first place? Right, avoiding that. Onwards and Upwards.


Daisy said...

I like this post! It makes perfect sense to me. I read about donating to women in third world countries. It seems like such an amazing cause. I think I might have to follow your lead and do that!

Cassie said...

Thanks Daisy :) I like the microloan donations because you can help people repeatedly with the same money. If you don't want to do it anymore, you take your money back out of the system. While there is a risk of losing your money if they don't repay the loan, the percentage of people who do is very low.