Ways to reduce budget

[Wrirya]

Was so impressed by the thread below of budgets and expenses for 2011, I thought I was frugal and now believe I am a fat spender after reading about people that love on 12k per year. That is amazing! So you have all inspired me to clean up and overhaul, however it seems like every time I try and cut back I get stuck. Could you please share the three best thing you have done to cut your expenses?

Thanks in advance for sharing

 

[chris2008]

1. We keep track of every cent in writing on a daily basis. Set up our monthly personal financial balance sheet to show every cent we own and owe.
2. We try to eliminate impulse buying, esp. food, clothes and home decoration.
3. To avoid impulse buying of books I have joined a library.

 

[ratto]

Everyone's situation is different, so it's difficult to give anything specific. As a general rule, I found it's extremely helpful to have a monthly balance reconciliation among all my bank accounts and credit cards. In this way, I know immediately which category exceeds my budget. Also at the end of year, I can easily get an idea about my monthly and yearly expenses from my spreadsheet for future budget planning.

Also whenever possible, I would like to charge everything to my credit cards, only two. In this way, I will reduce the chance of forgetting to log any purchase via cash without receipt. I use credit cards like check book, never carrying balance. So a 19.99% or whatever APR is totally meaningless to me.

Finally, I take this quote from Bertrand Russell: "To be without some of the things you want is an indispensable part of happiness.".

 

[Wrirya]

1. We keep track of every cent in writing on a daily basis. Set up our monthly personal financial balance sheet to show every cent we own and owe.
2. We try to eliminate impulse buying, esp. food, clothes and home decoration.
3. To avoid impulse buying of books I have joined a library.

Good advice. I like the daily tracking.my wife and I where meeting weekly and got out of the habit. I think that made a Hugh difference. Also knowing how much you have and owe makes alot of since and motivation to keep the budget tight

 

[Midpack]

Most people focus on reducing the cost of existing expenses, for example:
- Switching from AT&T to Net10 for cell phone service and killing landline service
- Trading in the BMW for a Prius
- Switching from a premium DirecTV pkg on 3 TV's to a basic Dish Network pkg on 2 TV's
- Sell 'toys' you don't use anymore (boats, jet skis, quads, kayaks, furniture, electronics, exercise equipment, jewelry). Not things you still enjoy, but we often have stuff laying around that we've lost interest in. eBay is a wonderful thing IMO, I sold about 75 items over two years and netted thousands on stuff that I never would have used, and much of it would have been thrown in the trash netting $ nothing!
And these are effective.

We've found just reducing the frequency of expenses, without reducing quality or cost per event just as helpful, for example:
- We like to go out for dinner at some higher end restaurants. The answer for us was not to confine ourselves to less expensive restaurants, it was to go out to our favorite places a little less often. To our pleasant surprise, we enjoy going out for a nice dinner even more now while spending less. We were going out so often we didn't fully appreciate it.
- Used to go to the movies almost every weekend in winter, now we go once a month if that. Seeing some movies for $1 at Blockbuster Express is just fine. The ones that really translate better on the big screen, we still go to the theater.
- Keep things longer. Keep cars, electronics, appliances for another year or more. Don't replace until something wears out, vs replace just for new model.

And when something breaks, I used to just go buy a new one without much thought. Now I consider can I fix it, can I do without or substitute something else, buy used, share with a neighbor? If not, buy new but there are often other options.

There are so many approaches, the latter is sometimes overlooked. Best of luck, it's a process you work thru over time.

Over the past five years or so, we've cut our spending by more than one third just reviewing every category and adjusting most. All but one of the above are things we actually did. And guess what, our quality of life has not diminished at all that we can see. "Stuff" is over rated IMO, experiences are way more fun. It's surprising and satisfying!

 

[Trawler]

As others have stated we found the following:
1.Track monthly expenses by catagory.
2. Took a look at each catagory and asked ourselves how to reduce that expense. IE bid out insurance, cut out land phone line, reevaluated celluar plans an caariers, revaluate cable provider and package etc etc etc.. We Evaluated every expense catagory one catagory at a time and made plan on those we wanted or could impact
3. We took action and reduced one chosen catagory expense each month.
4. For past 6 years we have contued to repeat steps 1-4 .

Result was an initial 36% reduction in expenses and then we have been able to manage to keep total expenses the same or less each year. In other words our new houshold budget was 36% less than we were spending before tracking and we have never gone over new total annual budget since.

 

[Ronstar]

I'm going to learn a lot from this thread. The only time I ever cut my expenses was when I broke my ankle. I really couldn't travel. I couldn't buy toys because i couldn't carry them from the store. I just sat home and watched tv for a few months. By far the most frugal months I ever had.

 

[haha]

I'm going to learn a lot from this thread. The only time I ever cut my expenses was when I broke my ankle. I really couldn't travel. I couldn't buy toys because i couldn't carry them from the store. I just sat home and watched tv for a few months. By far the most frugal months I ever had.

Similar to the best way to lose weight is to get some kind of stomach ailment. The weight just melts off. If only you weren't so gray it would be a great time to get some pics.

Ha

 

[Hamlet]

I cut back to just internet access on my cable (which includes local channels for "free").

I bought one of those little streaming boxes and signed up for Hulu plus.

Saved about $40/month over paying for cable TV.

 

[Mulligan]

I tend to do like Midpack does. Im not extravagant to begin with, but I look to be more efficient in what I do, instead of getting rid of it. Of course how much you need to "whack" is a determining factor in what you look at, too. I tend to think $ 10- $50 a month savings as big victories. Slashing thousands is a whole different area. Some of mine recently 1) threaten direct tv with cancel, to get the $10 month hd price off my bill 2) dropping landline and getting a $30 a month cell plan with 1500 minutes and texts and internet through Virgin Mobile 3) Getting my home premium reduced because they kept sneaking increases in value of the home when that was not the case 4) actually using coupons from newspaper from things I always use anyway 5) maximize your cash back credit card to purchase everything you can on it including monthly bills (pay it in full at end of month though ) 6) You might want to google year end tax savings strategies to see if any apply to you. I went over my income limit for a state tax benefit this year, and was going to lose almost $2000. Then I figured out by putting $3k in a 529 plan it would get me under the limit and recapture it. 7) Being single, I usually bought smaller portions at store, now Im going to get over my laziness and by bulk of items that keep.
I used to think it was trivial and a bore to do those things, but now I kind of make it a game. Anytime I see something and say well it only saves $5, then I tell myself it took 10 minutes to do it which equates to working $30 hour tax free. That is way more than what Im worth in the working world so I do it

 

[Amethyst]

It all sounds a lot like how to maintain your weight without starving yourself, doesn't it? Eat the good stuff, only less of it, and less often. Learn to cook so you can make good stuff from raw materials, instead of paying somebody else to prepare and package it for you. Plan your meals instead of grabbing eats on impulse.

Amethyst

 

[Ronstar]

Similar to the best way to lose weight is to get some kind of stomach ailment. The weight just melts off. If only you weren't so gray it would be a great time to get some pics.

Ha

You're right on Ha! The weight does melt off - and save a lot of $ on food at the same time. I don't think we need pics.

It all sounds a lot like how to maintain your weight without starving yourself, doesn't it? Eat the good stuff, only less of it, and less often. Learn to cook so you can make good stuff from raw materials, instead of paying somebody else to prepare and package it for you. Plan your meals instead of grabbing eats on impulse.

Amethyst

I see a pattern forming here. Seems like a lot of $ can be saved by eating out less, and eating at home more but at less quantities. We went to Vegas a few months ago with a couple that enjoys fine dining. We ate some great steaks, but I can grill the same quality steaks at home for a lot less money.

 

[jebmke]

I have shifted my investments around. My average tax rate for 2011 should be in the low single digits.

 

[LauAnn]

Little things:
1. Replaced land line with a Trac phone. No data or texting.
2. Always buy store brand groceries; they are usually a better deal even with coupons.
3. Eat at home more often than not. I could really do much better in this category. But I have no patience for cooking.
4. Pay by the bag for my trash pickup. Most of it goes into the garbage disposal or into a relative's trash.
5. Settle for flights with connections rather than non-stop.
6. Downgrade the rental car.
7. Turn the heat down significantly and night and when at w*rk.
8. Don't water the grass in the summer, let it go green.
9. Don't renew the magazines you don't have time to read.
10. Don't go for the fastest internet speed; nor the most cable stations.
11. Don't use air conditioning.
12. Don't heat rooms you can close off and don't use.
13. Cut out or back on the alcoholic beverages.
14. Use the library rather than buy books.
15. Cut way back on purchasing clothes and jewelry; do you realy need more?
16. Shovel the snow yourself rather than buy that snowblower.
17. Cut your own grass.
18. Rent the kayak rather than buy one.
19. Pay off the mortgate and instead put all that money towards future ER.
20. Fertilize your own grass rather than paying a service do do so. Or don't fertilize at all.
21. Grow your own vegetables; learn to can or freeze them.

 

[tightasadrum]

Little things:
1. Replaced land line with a Trac phone. No data or texting.
2. Always buy store brand groceries; they are usually a better deal even with coupons.
3. Eat at home more often than not. I could really do much better in this category. But I have no patience for cooking.
4. Pay by the bag for my trash pickup. Most of it goes into the garbage disposal or into a relative's trash.
5. Settle for flights with connections rather than non-stop.
6. Downgrade the rental car.
7. Turn the heat down significantly and night and when at w*rk.
8. Don't water the grass in the summer, let it go green.
9. Don't renew the magazines you don't have time to read.
10. Don't go for the fastest internet speed; nor the most cable stations.
11. Don't use air conditioning.
12. Don't heat rooms you can close off and don't use.
13. Cut out or back on the alcoholic beverages.
14. Use the library rather than buy books.
15. Cut way back on purchasing clothes and jewelry; do you realy need more?
16. Shovel the snow yourself rather than buy that snowblower.
17. Cut your own grass.
18. Rent the kayak rather than buy one.
19. Pay off the mortgate and instead put all that money towards future ER.

Yikes! 11. Don't use air conditioning/?? Getting a divorce would be far more expensive.

 

[haha]

Yikes! 11. Don't use air conditioning/?? Getting a divorce would be far more expensive.

And only slightly less uncomfortable.

 

[LauAnn]

Everytime I cut back on something which seems to only reduce expenses by an inconsequential amount I multiply it by 10 to really appreciate that the savings is considerable over a decade.

 

[LauAnn]

As others have said, it really helps to keep track of everything you spend, and using a credit card rather than paying cash really makes this much easier to do. When that statement comes, I categorize every item on it.

Also, in addition to just tracking the $ amount of your utilities and gasoline use, keep track of how much you are using in terms of cubic feet, gallons etc.

 

[ripper1]

Coupons, coupons and more coupons. My wife only buys what is on sale and then uses coupons on top of sales. When she or both of us go to the grocery stores we buy a lot of loss leaders and in bulk if we can. This works especially well also if you like the product. No sense in buying things cheap just because they are cheap. It all adds up and then when we go out and have a good time or dinner once in a while we have the extra money.

 

[RAE]

It is really just a matter of prioritizing expenditures (within your available budget) based on what you really want out of life. For example - I'm retired now (since early 2010), and my wife and I really like to escape the northern winters for 6-7 weeks and spend that time in a warmer place. That is very important to us, so we make sure we budget the $$ for it every year, by cutting back in some other areas that are not quite as important. Our budget for clothing, food, entertainment, and some other things is fairly low, which frees up some $$ for our winter travel (don't worry, we still eat VERY well........we just cook great meals at home, and dine out only rarely). That is just one example, but I think it illustrates the point. If you have a goal, saving $$ to help meet that goal becomes a challenge......and it's actually very satisfying and rewarding to do things that help work toward that goal, at least for us.

 

[Khan]

Thermostat: 60F, 50F at night
A/C: 85F
Don't drive much
----------
On the other hand: donate/give much

 

[jebmke]

13. Cut out or back on the alcoholic beverages.

Whoa, let's not get carried away here.

 

[Wrirya]

I cut back to just internet access on my cable (which includes local channels for "free").

I bought one of those little streaming boxes and signed up for Hulu plus.

Saved about $40/month over paying for cable TV.

How does hulu work? Do you have too pay to watch. I signed up but was never able to get access to watch anything

 

[Alan]

How does hulu work? Do you have too pay to watch. I signed up but was never able to get access to watch anything

Regular Hulu is for free - my son watches loads of stuff on it. Hulu+ you pay for but it gives a lot more choice, and you can use streaming boxes like a ROKU to watch Hulu+ on your TV.

 

[ohyes]

jebmke --- we think alike