Previously I talked about gathering all your financial info so you know where you are starting. I call this digging your head out of the sand.
When I started digging my head out of the sand the first thing I did was wrote down everything we spend money on in a typical month, and everything we owed. Ouch, not a fun number to look at.
Next, I started reading about budgeting, and trying to get a handle on our budget. The first month I cut some easy expenses, and over the last 4 months I have diligently gone through every expense and figured out any way I could possibly cut it or get rid of it completely.
Here’s a breakdown of what we are projected to save this year based on all our spending cuts.
Refi Savings $4200/year
Auto: $672/year (see my insurance post here)
Life: $60/year (by setting up automatic BillPay monthly)
Gas/Electric: $360/yr (using power strips and being more energy conscious)*
Water: $60/year (running the water less, fixing drips)
Cable internet and phone package:
Cut cable : $921/year
Shopping with a list: $2400-$3600/year (let’s average that and say $3000)
I’ve also been stocking up on items we use frequently when they are on sale, as well as eating more seasonally to avoid expensive out of season foods.
finance charges and late or overdraft fees (saved by automating and creating a cushion in our main accounts) $3600/year
Other expenses cut:
cancel gym membership $1080/year
packing lunches $1000/year
cut back on eating out $2400/year
Total Savings: $17,593!
*=we put 2 areas on power strips, make a conscious effort to turn off lights, unplug power cords, and unplug our small kitchen appliances.
These are not all of our expenses, as some were unable to be changed. This should prove to anyone who is disbelieving that small and big changes can be combined for a big win.
The savings we had is fairly high, and the majority of that savings is going towards living beneath our means, and paying down existing debts.
It took approximately 10 hours of work. Well worth it!
Have you cut expenses? If so, where? And more importantly why?
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