Sorry for the holiday hiatus … lots to do, but I am back with a very eye-opening, personal post. And that is how being financially savvy can save your budget.

I am going to be sharing a lot of personal information here, but it shows very clearly that by watching your money, you can make it!

As you may know, my income dropped to one-fifth of what I was living on before — and I still watched my money then. What’s the numbers? I averaged a little over $100,000 for about four years, and have been living on $22,500 a year for the last two years, and only $7,000 in 2007. The reason? Need I say more? Real estate meltdown.

But we are surviving and with a very little impact on our day-to-day life! Sure, the days of 15-night cruises to Hawaii are history, but I still managed a three-night one to Ensenada this year!

The best news is that for the first time in two years, I did not need to pull $10,000 from savings in January to give me a head start on the coming year (and by that, I mean, I was out of money). I take that as a huge victory, and I chalk that up to the fact that my budget-saving measures are working — and well!

Not only that, I have six months’ living expenses in the bank!

To answer a couple questions/doubts, I am not living on credit cards. My total balance is less than $700 (and that was for real estate association fees). I’ve resigned myself I cannot pay those off in one fell swoop, but with a chunk payment here and there, I can pay ‘em off in a matter of three to four months.

I last hit savings in January 2009 for $10,000. Otherwise, it is intact (and actually improved, thanks to a stock market uptick).

How am I doing it? It’s the cumulative effect of watching our budget — and looking for savings wherever I can.

Here are some salient points on how I did it:

Bottom line — I ran $198 negative this year. Now that’s do-able. I just ran the numbers, and by just doing the above, I saved a little under $8,500. This underscores now what I know — why didn’t I need to hit savings for $10,000 this year! I just wish I would have done these measures even earlier, but I am so proud of myself.

Want an even better picture of how watching your money is a job — the savings I made this year is as if I worked 24+ hours a week all year long (tax free!) at a minimum wage job!

I hope this post gives you inspiration. It sure showed me that what I am doing is working!