My wife, Cathy, and I have been on a mission in the last year or so to drastically cut expenses from our monthly budget. As you'll read in today's post, Cathy is the detail person who tracks the spending and savings.
If you're a regular reader, you know of our long battle dealing with our son's addiction. During these years, we made some terrible decisions with our finances. The result – pretty much starting over in our mid-fifties.
We didn't let that tear up our marriage, though it was definitely not an easy road. One of the things that got us through is the ability to talk about things we didn't necessarily want to talk about. That includes talking about money and finances.
There are definitely things more important than money. However, money and finances are in the top two or three reasons on almost every list you'll see on what causes divorce. That's why we make it a point to regularly review and talk about what we're doing with our money.
Anyway, once we began to get ourselves back on track, we looked for ways to cut our expenses. We combed over every aspect of our spending to find ways to cut. In today's post, we will highlight how we did it and how much we've saved. We'll also talk about what we've learned over the years.
Cathy is the primary author. I add my two-cents worth here and there.
Here's our story of what we saved and how we did it.
How We Cut Our Monthly Budget
Hello everyone. It's Cathy, Fred's wife. I love saving and making money. Though this first topic isn't part of our monthly budget-cutting ideas, it did put a lot of cash in our pockets. And it was a lot easier than we thought (especially for Fred).
When Fred started his blogging campaign, I started reading the articles on saving and cutting expenses. Nothing excites me more than saving money; finding innovative ways and ideas on how to save.
Back in the day, I loved cutting coupons on Sunday, (I know old school). One of my favorite things when we first married (going on 35 years), was to clip coupons out of the Sunday paper and place in my little coupon divider before heading to the grocery store. I grew up on very little. Early on, I learned how to save and be frugal.
After reading a couple of blog articles, I decided it was time to approach Fred about selling stuff we’ve had sitting around the house for years. In other words – to declutter. You have to understand. My husband hates change! He's resisted this plea to declutter for years. To my surprise, this time he agreed!
I almost went into shock!
The biggest shocker was he let go of over half his books. Mind you; he had four bookshelves full. We are now down to two! The last two are a work in progress for now. I wrote about our decluttering in an earlier article. I brought in $3K from selling stuff! I’m still on the bandwagon of selling items we don’t need, but it’s been slow moving lately.
Cash made from decluttering – $3,000
Fine tuning the budget
My focus has been on cutting our monthly budget. I reviewed our budget from the beginning of the year to now. I was amazed at how even the most straightforward items cut or paid off have saved. I’m sure some of you will say, it’s not rocket science, but I’m psyched about it.
Our grocery bill here in the DMV (DC, Maryland, Virginia) is ridiculous! What a sore spot when trying to eat healthily or even gluten-free. Fred has his office at home. To get out of the house, he went out to lunch. A lot! When we looked at the budget and what he was spending, he decided to quit going out for lunch. I had already stopped going out for lunch at work, mainly to watch my food and calorie intake every day.
Going out for lunch (or any meal for that matter), in the DMV is expensive. We figured his eating out would average around $10/lunch. Places like Chic Fil A (one of Fred's favorites) are less. Others are more.
Monthly budget savings – $200/mo.
On Sundays, I began preparing great lunch options for both of us. That helped him with the lunches out. Here’s a quick analysis of how much we’ve cut on the grocery budget since January.
We usually plan and cook our meals for the week on Saturday and Sunday. Saturday is the meal planning and list making. We will either shop on Saturday or Sunday to get the items on our list. Meal planning has helped us save a lot of money. It cuts out most of the trips to the store to pick up extra things we forgot.
We cook for the week on Sundays. We share in the weekly meal prep. Fred loves to cook in the smoker and on the grill. When he does this on Sunday's, it accounts for two or three meals for the week. I cook soups, some Mexican dishes (tacos or enchilada) that accounts for a couple of meals. On nights we cook during the week, it's usually salmon or fish that we can prepare quickly.
Food cost savings
For many of you reading the following numbers, you will be shocked. I've read accounts from other bloggers about their grocery bills. At those rates and in less expensive parts of the country, our budget could feed a family of six. Out here, it's crazy.
Sperling’s Best Places Cost of Living index for Reston Virginia is 155.5, compared to the National average cost at a 100. It's expensive even shopping for groceries at Trader Joes, Aldi, etc., which we do. Reston is not a cheap place to buy anything, especially housing or food.
When we looked back over our food budget for 2017, the average came in at $1,437/mo. During the first nine months of 2018, we averaged $1,087/mo.
Monthly budget savings – $350/mo.
We feel pretty darn good cutting our food budget this much. However, we're still working on ways to slim it even lower.
Next, we looked to find other areas of unnecessary spending.
Fred loves his music. He was spending around $30/mo. on iTunes music. He also had subscriptions for Pandora and Spotify. (As an aside, the Spotify saved probably $20/mo. over the iTunes spending). We were even paying for Sirius XM radio in both cars. We stopped the contracts on our Sirius for, a yearly savings of $780 or $65/mo.
Why do you need Sirius when you have Pandora or Spotify on your phone? Not sure where our heads were when we picked that up.
Monthly budget savings – $95/mo
FIOS vs. alternatives
For many households, ours included, TV and mobile phone service make up a substantial monthly expense. We knew we were spending way too much for both but had the standard two-year contract to get all the bells and whistle discounts with the package. How many of us get locked into these kinds of deals?
We rarely watch local or, for the most part, even most cable TV channels. At the end of the evening, we'll often watch Shark Tank or a rerun of a comedy series. Mostly we spend time watching movies, or a couple of favorites like This is Us or Criminal Minds. Fred, of course, watches sports.
Our Verizon TV, internet and phone bill were around $230 a month. The package included a required home phone (which we never used or answered), high-speed internet (which I need), and the TV package. Fred did his homework to find ways to lower the costs without sacrificing what we both wanted.
He got the internet for $64.99/mo. He bought a Roku HD connection for a one-time $69.99 fee (which you don't need if you have a Smart TV) and YouTube TV for $40/mo. We get everything we wanted and stopped paying for what we didn't. We have Netflix, Amazon Prime, and numerous other options, both free and optional paid add-ons (which we don't use).
Our monthly bill went from an average of $230 to $105.
Monthly budget savings – $125/mo.
We have two beautiful Akitas named Titus and Kaylee. If your guessing who’s the boss, and you guessed Kaylee you got it right. The female rules!
After three other dogs which we had to put down from old age and cancer, we decided to purchase insurance on the pups this time. The coverage was great during their younger years. The company we started with changed the coverage. It was less coverage for the same premium. Fred went to work shopping for another option.
As we get older, we pay more for insurance. It's the same for pets. Before we switched a few years ago, we were paying around $130/mo for both dogs. When we changed to another company, our cost only went up a couple of dollars to $132, and we had much better coverage. A few years later at renewal, it jumped to $147/mo. The reason they gave (which is always the same) was that costs and claims in our area had gone up substantially.
A $147 a month for (2) dogs, totals $1,764 a year. When we calculated their remaining life expectancy, we realized it would be more expensive paying for the insurance than saving for any major vet bill.
After a bad experience with our last dog and cancer, we will not spend money on cancer treatment. That was a horrible experience. Nor we will run all kinds of test on them like we did our first dog and brought him home for five days with an IV. Fred and I slept in shifts around the clock with him on the floor. That was hard on the dogs and us. We won't do that again. That helped us decide to drop the coverage.
Monthly budget savings – $147/mo.
Eliminated car payments
A few years ago, we refinanced both cars at a lower rate and a much shorter payment period. I realize some reading this are questioning why we ever borrowed to buy our cars. Reread the first paragraph of the post for the answer.
Because the interest rate was so much lower, the shorter payment period didn't increase the monthly payment. In fact, they went down slightly. We have now paid off both cars.
We have two Kia's, a 2012 Sorento and a 2011 Optima. Not sure if you know that Kia provides a 100,000-mile warranty on the drive train and engine. That warranty comes with the car. Of course, they offer an extended warranty. We declined.
We purchased a Kia Optima, and we’ve had a few problems with it. However, we have not had to pay any out of pocket on it except for tires and breaks. When we took it in for regular service, they told Fred it was out of oil. There were no oil marks in the parking place.
A week or so later while driving to work, I heard a very loud clicking sound in the engine. We took it to the dealer to have it checked. The dealerships told us there was a factory defect in the piston construction of some 2011 Optima's that caused them to burn oil. The result – a brand new engine for the Optima. Zero out of pocket dollars! We think Kia rocks!
Monthly budget savings – $680/mo. ($320 Optima, $360 Sorento)
Continued budget cutting
This is just the beginning of budget cutting for us. We review our budget together twice a month. I’m the bookkeeper of the house, that’s what I do for a living. In my day job, I help my department manage one of our many division's budgets. It's a budget of over $50 million. I love keeping our division on track, on time, and right on point with their budgets.
I build spreadsheets to manage these budgets. You could say I've become a spreadsheet geek. I'm OK with that. We use Mint to track and categorize our spending. I built a spreadsheet to manage it more closely.
I recently took over managing my husband’s company’s budget. He had a basic spreadsheet. It wasn't doing what he needed. I built a new one to better track his business.
I’m a detailed person, and part of keeping dollars on track and budget is all in the details. I point out any discrepancies or where I see we can cut dollars on spending. Most people hate that kind of detail but not me. The more detail, the better. Bring it on. I find it challenging and rewarding. With the few savings mentioned here, so far, our budget is down $1,597 a month. Love it, but I know we can do better! Stay tuned as I research other ways to save.
It took us a long time to really focus on the expenses the way we are now. The effort has been worth it. Here are the totals for the year:
As you see, this is not a small amount of money. The declutter cash was a nice bonus. To us, it's money that we didn't have and I wanted to account for it, even though the focus is on how to drastically cut expenses.
You'd be amazed at what you might find in savings if you went through your budget this way. I'm sure many who are reading this are already doing most, if not all, of these things. It was an eye-opening exercise for us. I have to say, I'm pretty proud of what we've accomplished in the last year.
We've changed the way we think about budgeting. It's made us more aware of the little things we do with our money that can add up to a significant cost.
We've always talked about money together. Now, our conversations about money are more meaningful. Now, we're working together to find ways to save. It's a fun exercise.
You can follow Cathy on Twitter. She's Mama Lemon @mammlemon.
And now it's your turn. What other ways you’ve cut expenses? Have you decluttered? What tools do you use to track and monitor your expenses? Let us know in the comments below.Follow me on social media