Written by Carol, one of our readers:
We’d all like to save money each month, but how to go about it is another story. Start by making a budget; that scary, imposing, restrictive plan that keeps you in line. Only it doesn’t have to be that way, a budget is really only putting down on paper your priorities and recognizing you absolutely cannot spend more than you make in any given time period. It also, contrary to popular belief, doesn’t have to come together in one sitting, start the first month with just writing down general categories and amounts. Over time you can refine and fill it out more completely. It took us three months to get a good handle on our budget, each month getting more and more detailed, even today we are constantly adjusting the numbers.
Once you know where you money is going it is now time to start trimming the fat. If you look at your monthly expenses, looking to saving $500 it will seem overwhelming and impossible. But what if instead you looked at shaving a few dollars off each item? As we began looking at our budget we decided to go through and renegotiate each item we could. After knocking out the cable and downgrade our cellphone plan – saving $65, reviewing our car insurance and changing our coverage – $25 less and changing our restaurant habits to only twice a week. This all totaled approximately $125 a month in savings. Besides the mortgage payment, food and general merchandise are our biggest expenditures.
Even with the constant coupon clipping and avoiding the pricier groceries stores we couldn’t make the budget numbers and the real world numbers agree. That’s where web surfing finally began to payoff. There are plenty of websites out there that can multiply you efforts. The blogs that track specific stores rewards programs, letting you know what items are free or worth the most rewards points/bucks, will give you an edge. Lots of promotional programs let you trade your name and email address for free samples and /or coupons.
Also look to farmer’s markets and co-ops, we spend $17 every two weeks for $50 worth of fresh fruits and vegetables. Little by little we have shaved almost $200 off our monthly grocery bill.
Try once a week cooking, or once a month cooking if you’re ambitious! There are so many tasty once a week cooking recipes out there that you’re bound to find some that you like.
Due to the fact that we didn’t start our marriage with the financial acumen that we now possess there is a tidy sum sitting on credit card balances. This can be a dangerous lever, waiting to dump us over the edge at a moments notice. We headed it off by finding a low APR, zero interest on balance transfer offer and moved everything we could onto that card. Then we proceeded to cut up our physical cards except for one emergency card and have begun applying the snow ball methodology. The snow ball theory has you paying off the lowest balance card while making minimum monthly payments on the others, as you pay off a card you roll what you had been paying on it into you payment on the next one. With this consolidation we erased about $50 a month in additional interest fees.
Lastly, we began looking at efficiency around the house and in our travel habits. By lowering the thermostat by 3 degrees and running only full loads in the dryer, we cut $15 off the electric bill. Using public transportation and walking for quick trips to the nearby store translated into more than half a tank of gas saved every two weeks; which at today’s price means $50 a month left in our pockets. Together we have identified our spending priorities, changed our spending habits and challenged ourselves to find fun and rewarding ways to save a little bit in each category on our budget. This has tallied up to savings of almost $400 a month, which comes in handy when saving for the next rain day.
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Posted by Leila D:
There are tons of ways to save money on monthly expenses but most of these ways consist of cutting back on day to day luxuries that we don’t really need. I’m always trying to find good ways of saving money and I always end up finding something new to “get rid” of in my life. But this can sometimes be a good thing. Let me talk about a few ways.
The first for me would definitely start at home. I live in Texas so the weather gets a little crazy here. I find that weather sealing my windows and doors saves me a ton of money during the winter. Spending a mere $50 dollars in the first month to make my gas bill in the low $100′s the rest of the season is way better then spending close to $300 a month for almost four months in a row.
Next in home would definitely be energy saving bulbs and fans during the summer months. I once had an electricity bill of close to $600 bucks in a one bedroom apartment. That is all it took to wake me up and make me more aware of how much electricity I was using each month. I found that the energy saving bulbs cut it back about $8 bucks a months so they pay for themselves in the first month.
Next I bought some plug-in stand up fans for each room. I figured that the air conditioner cooled the whole house, but why would I need to cool the whole house if I’m only in one room at a time? Well I don’t! So for about $100 bucks at a place like Wal-Mart or Target you can almost cut your electric bill in half depending on the size of your house.
Now we move on to eating habits. Eating fast food everyday like the average American can lead to it becoming a habit of spending $15 to $20 bucks everyday just to eat! I pride myself on breaking that habit and spending $15-$20 bucks on food a week. That’s roughly a $120 a week difference. But not only do you save a ton of money, you can lose weight, feel better, and overall end up healthier. Plus you learn a lot of fun fruit and vegetable recipes. So just remember, the grocery store is the way to go. Also try to learn some once a week cooking tips. Check the link for more information and some great once a week cooking recipes.
Last but not least is saving money on gas. This one isn’t for everyone, but for some of us, its huge. I personally live about a half a mile from work. So of coarse, I walk or ride my bike. Some people spend close to a grand a month on gas. That to me is insane. I drive only when I have to. Which is going out of town, across town to see friends or family, or in a minor emergency. And in this case, just like with food, you lose weight and become more healthy from walking or riding a bike.
These are just a few simple ways to cut back on money each month. You can always come up with new and improved ways to save money. So feel free to use mine and come up with some new ones of your own.
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A budget is a tool to help you plan, prioritize, and manage your income and expenses. Review your budget often and update it when you are experiencing a change in income and expenses.
1. Write down your monthly take-home pay. Or if you’re out of work, your unemployment compensation. If you’re in sales – or work on commission – you may have to estimate, since your income may vary from month to month. List income you receive from any source, like a part-time job, a tax refund, gifts, unemployment, public assistance, dividends, and alimony or child support. Add the entries to determine your actual income for that month. Keep in mind, some of these amounts may fluctuate.
2. List how much you deposit in savings each month from your take-home income, even if it’s only a small amount.
3. List your fixed monthly expenses – the predictable, set amounts for the must-have items and services that you pay for each month – like rent or mortgage, car payment, and telephone, cable, or Internet access.
4. List your variable expenses – the amounts that change, as well as the expenses you pay weekly, monthly, quarterly, semi-annually, or every year – like groceries, clothing, haircuts, property taxes, auto and homeowners insurance, and gas and electric.
5. List estimates for once-in-a-while expenses – like birthday and wedding gifts, or holiday gifts and entertainment.
6. Total your fixed and variable expenses and divide by 12 to get a monthly estimate.
7. If after paying your bills and putting money in savings, you still have funds, you can carry over the balance for the next month or use it for unexpected expenses. If this month’s balance is negative, look for ways to cut back on the variable expenses.
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