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Ouch. My Belt's Too Tight!
We're not going to rehash the bad news of the last few months. Times are tight, belts are tighter. You've been hoping for the best, but forgot to prepare for the worst. In lieu of trying to do a complete 360 and live like paupers (which is really about as effective as crash dieting) how about working to be live frugally in small ways? Each day, you're faced with choices, and each choice adds up.
Find ways to save money where you can. Try carpooling or riding your bike to work. Both decrease your gas bill, and your carbon footprint! Look for ways to reduce your debt too. Cut entertainment spending and skip the fast-food a couple times a week in favor of a healthy home cooked meal and some board games with friends and family. Just because you aren't going out doesn't mean you can't have fun!
Being frugal doesn't mean being cheap or doing without, it just means making do within your means. What ways have you adapted your lifestyle? Has it been easy or hard?