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Category: budget

How I Got My Finances in Order Part 4: How I Spent Less

My Simple 4 Step Financial Plan:

  1. Stop increasing debt
  2. Get Out of Debt
  3. Build an emergency fund
  4. Invest
  5. Bonus step: retire

Now we finally get to the post you’ve all been waiting for. What I did to save money This is largely my personal story and my not apply to you.  The ultimate simplistic formula for financial success is money coming in greater than money going out. It is in the actual execution that we encounter problems. To make sure you have more money coming in than going out there are two things you can do.  You can reduce your expenses and/or increase your income.

How I reduced Expenses:

There were three major places I worked on to cut my expenses. I sold things that still had a monthly payment, I reduced my monthly bills, and I created and stuck to a monthly budget.

Sell Things that Have Payments

This one may not be possible or even apply to some people. Sell item(s) that have payments. These items include cars, other vehicles, boats, property, and large ticket items like appliances. For some items the decision might be emotionally difficult but from a practical angle a no brainer. I am talking about that boat you splurged on or your extra car/motorcycle just for fun.

It may seem simple to just get rid of anything that has a payment but the actual decision can be very hard to make. What if you are underwater on the loan. Should you wait until you can get enough in payment for the item or sell it immediately taking a big hit to cover the cost. Maybe you don’t even have the money to pay off the extra. You have to have a car for work but you won’t have enough money to buy a reliable vehicle if you sell the one you are still making payments on.  I can’t make these decisions for you. You have to make them, but be willing to make very hard choices that might cause difficulty in your life. You gotta do what you gotta do to get out of this mess. Luckily, I was able to sell my car and had access to another vehicle free of charge.

Reduce Bills

One important way you can cut expenses is to lower your monthly bills. I was shocked how much money I could save  a month.

One of the biggest places I found savings was in the cable/tv bill. I cancelled all my extra channels just going with the most basic package to keep my internet connection.  I saved almost a hundred dollars a month this way. I know people that are paying over 200 hundred a month just on TV. The world is full of cheap and easy ways to be entertained.

Another place you can find savings is in paying for phones. If for some bizarre reason you still have a land line get rid of that thing. Also look for a simpler plan. Perhaps you lower you data package or join someones family plan.

You can cut some more expenses by reducing your electrical bill.  If you are still using old school bulbs replace them with modern energy savings one.  Turn your heat down. Turn your ac down. Make sure you turn off lights when they are not in use.

Cancel any service or subscription that you can do without. You don’t need magazines most information can be found online for free.  I canceled my spotify subscription. I could handle having commercials in my streaming music.  I did keep my netflix because I have to have some entertainment. Do you really need that World of Warcraft game?

Cut Expenses

This is where the real battle to save money mostly takes place. This is when the daily/monthly struggle of keeping a budget is fought.

Eating out had been one of my biggest out of control expenses. In the dark olden times I spent about 600 dollars a month eating out, sometimes more, rarely less. So one of the biggest targets of my cost reduction was eating out. I didn’t just come up with a dollar amount I would allow per month. I created a whole plan of what days and where (or what price range) I would allow myself to eat out. I cut out all paying for lunches except for one 10 dollar lunch a week. I scheduled 2 dinners a week at approximately $20.  I also allow an extra meal out every other week. Like with most of things I allow flexibility and don’t beat myself up if I have an extra meal out.

Now with much less eating out the amount you spend on groceries will most likely go up. There are things you can do to try and keep costs down here. Wasted or rotten food can be one of the biggest cost amplifiers with groceries. Meal planning will help you only buy food you actually end up using. This will help you make a grocery list and only buy things you will actually eat. You can also save money by buying at a cheaper store or cutting back on expenses cuts of meat etc.  I also have been able to get meals from getting free food at work. At least once a week we have pizza or sandwiches or something that I can grab for later.

One almost completely unneeded expenses are drinks. Whether we are talking about drinks at the bar or spending six dollars on that nutrient deficient calorie filled  vente iced frapo whipped diabetes drink, you aren’t really adding anything to your life. Having said all that I do still allow myself to have a couple beers with friends. So much for my pontificating.

This one doesn’t really apply to me, but maybe you spent a lot of money on clothes, shoes, household items, etc. I don’t. In fact I haven’t bought on article of clothing in over two years and have barely noticed. Though I am starting to run out of socks.

My Goal

My goal with my budget was to cut my expenses as much as I could while still living my life.  I could have gone really extreme and cut another couple hundred dollars off of my monthly budget, but I wanted to make this a long term sustainable thing.  I spent several months playing around with the budget, decreasing this increasing that, till I found one a could consistently stay within while still living my life.

Next up, earning more money.

The Return of the Slackers Guide to Life

The journey goes on step by step

Awhile back I ran a self improvement blog called the slackers guide to life.  I still own the url www.slackersguidetolife.com. As you can see it just redirects to here.  As with most of my blogging attempts it never quite took off the ground.  I ran it for over two years and had maybe thirty posts ever.  Every few months I would hide all the posts and schedule them to reappear as if the blog was a running concern. I did not give up on the idea of self improvement. I just got tired of not succeeding and having nothing useful to write about.

There are several reasons why I didn’t want to announce the return of the Slackers Guide to Life right when I first started making positive changes. Studies have shown that just announcing the intention to change can satisfy the desire for change. I wanted to have some success under my belt before starting to write. I also wanted to concentrate on the actual changes in my behavior and not worry about having post worthy things going on.

So what successes have I had over the last few months?  With one fairly long break do to weather and sickness, I have been running somewhat regularly. My resting heart rate has dropped from around 100 bpm to the mid 60s.  I have moved up a notch on my belt and even started wearing some smaller pants I had lying around. I’ve taken to rarely eating out, maybe one lunch and 2 dinners, this has helped both my health and my wallet. The last three months I have, amazingly, been within my budget.

So look forward to some more posts in this series.

Before the budget, the purge

This is  the followup to yesterdays post.  I guess since I asked you to track your spending for a month I really should post this in a month.  But it is my blog and I’ll do what I want.

So now you have an idea of were your money goes.  If you are anything like me you found some surprising if no terrifying results.  I was spending between four to five hundred dollars a month on eating out.  That and random unplanned purchases are where the most of my money went.  Unplanned purchases are when you are wandering through a store and just see something and buy it, fifty dollars for this video game, buy a couple of shirts, etc. I was losing another hundred to two hundred dollars a month on unplanned purchases.

So before I worried about a budget I determined to cut out the waste. I first figured out a clever way to deal with unplanned purchases.  I didn’t allow myself to buy anything.  I could not purchase anything that was not essential.  Eventually I allowed myself to buy things If I had saved up the money.  This removed the temptation to buy things when just out and about.   I didn’t have to argue with myself over whether I should or should not buy something. There was no discussion just no. I am not good with subtlety.  I need black and white decision making.

You can see my need for black and white in my handling of eating out.  I allowed myself a couple of times out a week.  Very quickly I was back to spending four hundred dollars a month.  Guess you can’t win them all.

Rich , happy, and free part2

Remember our mystery quote: “I am happy as long as I am healthy, and I am rich as long as I am not in debt.” In part one I talked a little bit about health.  Here in part two I plan to try and give some specific help with finances.
I might have mentioned it in the past but I used to “write” a self help blog called the Slackers Guide to Life.   I still own the domain it just redirects here.  I put write in quotes because I almost never actually wrote anything on it. I divided the effort into a few categories.  One of the only categories at which I had any success was money.  So let me share some of my limited wisdom.
So you are drowning in credit card debt and only making minimum payments.  You make good money but never seem to have enough. The first thing you have to figure out is where all your money is going. I I don’t recommend jumping instantly into trying to budget and save money.  Take one month to determine how you are sabotaging you finances.  You need to record every purchase of any kind you make.  There are apps to help with this.  I currently use mint to track my budget and all my spending. But when I started I actually found it better to do so with just  a notebook. I recorded the date, the amount, and what I purchased. Once the month finished I went back to the list.  You can break the expenditures into as many categories as you want.  I went with a simple systems.  I grabbed a red highlighter and marked outlays that weren’t good for me or were unnecessary as bad. The rest were acceptable.  
When I finished I totaled everything up.  I was shocked to find that my bad outlays were almost twice as much as the good.  Be cutting out some of the bad things I could literally save hundreds a month. So I recommend trying this for one month to start.

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