Reducing Expenses
In this three-part blog series, we have shared how we learned to have a good budget meeting and how we create our monthly budgets. In this third and final post, we are excited to share what has probably been our favorite part…reducing expenses!
In the past, when we have thought about reducing expenses, we think of going without something and choosing things to give up. While that can be a part of it, there’s more to it than just that. The downside is that reducing your monthly expenses can take up quite a bit of time. Shopping around for better savings and actually making the switch can take months to finalize, but don’t let that stop you from giving it a try. Once we got started, it was almost like a game or a new challenge to see how low we could go on some of our recurring expenses.
Our first bit of advice on this one is to go after one thing at a time. This is important when you are looking at expenses like wireless service, internet providers, and home and auto insurance coverage. It can be exhausting getting recommendations, comparing new coverage to existing, and figuring out if the savings is worth the switch. For the most part, we handled these big items one month at a time.
Sprinkled in with these big items, we also tackled smaller items that can really add up. For example, I wasn’t willing (yet) to give up getting my hair cut and highlighted every few months, but I was able to find someone who cost less than where I was previously going. For the rest of the family, we found a good deal at a local salon where we could prepay for multiple haircuts in advance and receive a good discount overall.
On a larger scale, we started unloading things we pay for that we found to be unnecessary. We ditched cable, again, and most importantly, we got rid of one of our cars! Yes, we liked the car. Yes, it was a great car. Yes, it was convenient having the car. No, we did not need the expense. By selling the car, we were able to eliminate the car payment, eliminate the gas and maintenance, and eliminate the auto insurance. The savings per month were huge!
With all of these savings each month, we had enough to budget towards paying off our student loans. Thanks to debt snowballing, with each loan we pay off, we take the amount we were paying on that loan and apply it to the next loan we are working towards. We are eliminating debt faster than we ever thought was possible.
Now, we told you reducing expenses was our favorite part. So we want to share with you some of the ways we were able to reduce how much we were spending each month:
TV Provider—our best advice is to cut the cord on cable. With so many streaming services, many people can find the programs they want to watch and subscribe to only that provider. We pay less than $30 per month for all of our streaming combined (this includes Amazon Prime which we obviously use for the free shipping).
Internet Provider—do not be fooled that you are getting a better deal by having all of your services bundled. This might be the case, but it might not be. We drastically lowered our overall monthly payments by eliminating cable/satellite, switching to a different wireless provider, and having a stand alone internet service plan. Call around and don’t be tempted by the “one low price” offer.
Wireless Provider—this one we had to wait a while to do until all of our phones were paid in full. One major lesson we have learned, DO NOT pay for your phones over time in your monthly bill! Once we no longer owed on any of our phones, we researched different companies and plans and made the switch. We were able to get better coverage, a better data plan, and a much lower monthly rate.
Auto and Home Insurance—this one took a while because we wanted to be sure that we could get the same or better coverage that we already had but at a lower cost. We did find better rates when home and auto are bundled together. There are lots of companies out there, so our suggestion is to ask around who people are using and if they have had a good experience. Next, get rates and compare. If you find one that is a savings to you, go ahead and make the switch.
Health Insurance—we have not had traditional health insurance coverage for nearly five years. We made the switch to a Christian health share plan after our traditional insurance rates were more than we could afford. We are paying nearly a third of what we would be paying with a high deductible insurance plan. We have had a great experience using the health share plan and we would not trade it for traditional insurance any day. Health share plans are not for everyone, but we do believe they are worth researching and discussing.
Restaurants/Eating Out—this is a budget line that is nearly nonexistent now, but at one time was comparable in amount only to our monthly mortgage! With a busy lifestyle, it can be very easy, and can feel necessary, to eat out whether it’s fast food or sit-down restaurants, but this budget line can become very expensive. We have eliminated eating out entirely except for birthdays, once or twice while on vacation, and maybe 2-5 other times the ENTIRE YEAR. This includes everything from ordering pizza to getting fast food. We just do not see the benefit of paying so much no matter how convenient it may be. We have realized, if there is debt that needs to be paid off, then when it comes to eating out, there just isn’t room in the budget!
Buy Used—we have saved quite a bit of money by not buying things new. Before we purchase anything, we first see if there is one for free (we are members of a great “Buy Nothing” Facebook page). If not, we then we check Facebook Marketplace and local thrift stores. We have bought just about everything from a pool table to a piano, from patio furniture to bikes, and from special event dresses to our dining room table. We have also learned to look for services at a reduced price. For example, we found an organization that offers free neutering for our dog and reduced prices for other services. These are all things we once paid full price for and would purchase without the least hesitation. Now, we always try to find free, cheap, or preowned before we pay for anything!
Subscriptions and Services—we had to look at our subscriptions and services line by line and compare cost and quality. This includes subscriptions for health and wellness products, beauty and skincare products, and household products. This includes services such as lawn care and housekeeping. It’s important to see if the subscription or service is worth the savings or convenience overall. If not, it may be time to cut that item.
Brand Name vs. Generic—we started looking at everything in our home from shampoo to hand soap, from cereal to coffee, and everything in between. Again, if you can switch to a comparable product for a lower cost, then you should make the switch.
Let Kids Spend Their Own Money—we have found it is better if kids have some “skin in the game” when it comes to the things they want and the things they want to do. Yes, kids will ask incessantly for anything under the sun. We now say “yes,” and “how will you pay for it?” Turns out, most things aren’t worth it to them when it comes to spending their own money. If it is worth it to them, they will happily spend, and we find, will take better care of that item. We have also taught the kids to look for the items they want preowned. They happily do this knowing it can save them money!
When reducing expenses, you may find you can save $25 per month or you may find you can save $200 per month. If you can trim $25 per month, just think, that is $300 per year! If someone walked up to you in December and said here is a $300 check you can use towards debt payoff, would you take it? Would you be excited? If yes, you should be that excited to save $25 per month to apply towards your debt now!!
For us, it’s now almost like a game…we look around asking ourselves what can we eliminate? What expense can we lower? Are there more things we can do without? And for certain, this has kept us from making new purchases that would keep us from getting closer to our goal of paying off our student loans.
Now we realize we haven’t thought of everything. Please share your tips and tricks! What are ways you have reduced expenses? We love to hear about all of the ways people are saving money and paying less!
