By now, you know it is wise to do and maintain a monthly budget because if you don’t pay attention to your money, it will disappear right before your eyes. However, some people don’t realize that they are in complete control of their budget and their expenses. You choose what kind of shelter you have, what kind of car you drive, and how much electric you use.
Since you are the author of your own story, I would like to help you when it comes to savings. There are possible savings in every category in a budget and you get to decide whether you want to save your hard-earned money or keep giving it away. I always recommend a balance. Figure out what is most important and keep those few items and save in other areas where it is a little less painful. For me, it was the internet. I just didn’t want to not have internet in my home, so I sacrificed in other areas to make it happen.
Here are some savings to consider in your fixed expenses:
Rent or Mortgage – How much house or apartment do you really need? Living in a small apartment can save you $6000 – $9600 per year. This doesn’t have to be a permanent living situation, but you could really make progress if you tried it for a year or two.
Insurances – Once you have a small emergency fund of at least $1000, change your deductibles on all of your insurances to $1000. This can save you hundreds per year.
Cell Phone – There are plans out there now that are $50/month unlimited everything. If you are under contract with a company, drop anything that you are not using or that is not necessary. FYI – A teenager only needs a basic phone with, maybe, unlimited texting. Added to a family plan, this is about $20/month. If you have the internet at home, you may not need it on every phone in the house. You don’t have to go bare bones if you don’t want to, but be wise with your costs. You probably don’t need everything you have now.
Electric – Turn off and unplug items when they are not in use. Turn up or down your thermostat when you are not home. Open windows on beautiful days like today. Wash your clothes in cold water. Dry your clothes on the energy cycle and only for as long as is necessary. Don’t leave computers and cell phone chargers plugged in when not in use. Maintain your heating and air conditioning units. Wash dishes by hand from time to time.
Cable – Try to find the best deal possible if you are going to keep cable. If you want internet, as I did, you can usually bundle in cable and home phone for only $30 more than internet alone. Search for the best deal and negotiate a 2 year contract or more to lock in the rates. Don’t be afraid to change companies.
Credit Cards/Student Loans/Personal Loans – You must stop using credit cards for them to go away. Use your extra savings per month and pay off your debt as quickly as you can. Many people could free up from $200 – $1000 per month just by getting rid of credit cards and loan debt. The only way to keep your money is to stop giving it to other people.
Car Loans – Either aggressively pay them off or sell the car, even if you lose money. You can save $5400/year by getting rid of a car you couldn’t afford and getting one, with cash, that you can. Use the extra money to get out of debt and build savings and then save for a newer car.
Remember, some of the major sacrifices you may choose to make are not permanent. You get to choose how you live your life. But think of all you could do with no debt and money in the bank. I have found that I enjoy that life and have continued my savings even when I didn’t have to. I like keeping my hard-earned money. You should too.
Part 2 tomorrow – How to save with your controllable expenses