A few years ago I realized that if I wanted to "make it" as an illustrator, I'd either have to start making a lot more money, or I'd have to start cutting down on what we spend as a family. If you don't spend more, you don't need to earn more. For all the luxuries we enjoy being self-employed (working from home, making our own hours, living in a city, not needing childcare at the moment, etc.) we can't always depend on a set income, but we can control what we spend.
Write down a Budget
We set out a list of things we like to spend money on and things we need to spend money on. I was at an advantage because I track all of our expenses so I could look through months of real spending by category, but even if you don't have this, you can look through last month's costs and see how things add up. Once you know how you spend money, you'll be able to decide what's important to keep spending on and what can get cut. Here are some of our categories:
This is a big one. I hadn't realized how much $$ I was wasting on groceries. We cut out snacks and prepared foods, and now we eat basics like potatoes, vegetables, fruit, rice, beans, and meat. I make our granola instead of buying it. We buy store brand yogurt, milk, bread, and eggs. Salad dressing can be made from lemon juice and pepper (add oil if you want!). We managed to cut our grocery bill from $800 to $250 per month.
We decided that we like going to breakfast more than dinner, so we save money by going on breakfast family dates. A morning out costs about $17 with tip. Coffee is a lot cheaper than a cocktail! Eating out budget: $250 (we could definitely cut this down!)
We dropped cable and got a digital antenna, we try to use lights/fans/etc. only in the room where we are at the time, we don't use a dryer, and we run a full dishwasher. Even with Hazel's cloth diapers which run up the water bill, if we dry them on a rack they're ready by the time she needs them again. Utilities run us about $350 per month.
We're lucky in that we don't need a car at the moment. We bike around and can use my family's car when we need to since they live very close. We also have access to a car share program when we're in Philly. This is a HUGE saving. Even if you can cut down on car usage one or two days a week, the savings will be pretty great. Transportation budget $100 (we chip in for gas and insurance.)
Clothing, Entertainment, Etc.
I used to have a clothing addiction! I bought a lot of things online and didn't think anything of it until I saw just how much I was wasting. As a new mom, I find that I don't have much time or energy to put into my clothes at the moment, so I default to a jeans and cute top look. I buy new things from time to time, but I've started going to Marshall's instead of Anthropologie. It's a good challenge to minimize and at the same time evaluate the value of each thing in your wardrobe. I have a check list: it's gotta be flattering, fun to wear, and inexpensive. We don't go out much, so entertainment at home doesn't cost a lot, but I do love going to Starbucks for a treat a few times a week. Wasteful? Yes, but I love it more than I love going to the movies, or drinking. I think it's fine to choose one wasteful fun thing to do, but make it one, not three! Clothing, Entertainment, etc budget: set at $0, but we usually spend about $25-75)
This is a boring but important one. We decided to keep our higher coverage for healthcare and raise our deductible (the amount you have to pay for a problem arising) for home insurance. The health insurance for our family costs $600 or so a month. Homeowner's insurance for our place costs about $150 per month.
That's a sampling of our budget, and maybe these are a few ideas will get you started? I hope so - it's a lot easier to save money than to make it!