10: budget 101

This post is a continuation of the post 10 ways to reduce your monthly expenses. Here is number ten on the list. I intentionally haven't included an amount we saved with this, because budgeting can help you save a lot, or just better help you reach your goals.

10. Make a budget

I must confess, when we first created a budget for our income/expenses, I was skeptical. I was afraid that it would mean a complete lock down on the money, and absolutely no more fun.

After sitting down and figuring out how much we make and how much we spend on things that must be paid for (electricity, rent, food, etc) helped us get a better grasp on our financial situation. We knew how much leftover income we had after living expenses, and could budget it out based on how much we want to save.

Having a budget for things like going out to eat, seeing movies, etc (what we have categorized as ‘entertainment’) has helped us spend less on them.

Before we made a budget, it wasn’t uncommon for us to spend an extra $400/month and have no idea where it went at the end of the month. It had been spent on the occasional cookie, a cup of coffee every so often, lunch out at work a couple weeks a month, nights out, etc. 

Having the budget also forces us to prioritize what we want to do as far as entertainment goes. It makes us think about if we want to go to breakfast this Saturday morning, or save the money and get a nice dinner next week. It makes spending money very intentional, which is what prevents the huge credit card bills at the end of the month due to impulse buys.

Three easy steps to a budget:

1. Determine total income

2. List all mandatory payments

3. Subtract mandatory payments from income and determine how to allocate extra income

Here is an example of a budget, similar to what Alex and I use. (Remember, this is just an example, things can be added/subtracted based on your life.)

Monthly Income	Income 1	1500
	Income 2	2000
		Budget	Amt Income Left
Expenses	Tithe	350	3150
	Food	200	2950
	Rent/Mortgage	1000	1950
	Couch Payment	50	1900
	Student Loan	70	1830
	Car 1	82	1748
	Car 2	283	1465
	Cell Phone	84	1381
	Insurance	185	1196
	Natural Gas	80	1116
	Internet	53	1063
	Entertainment	150	913
	Cars (Maint + Gas)	150	763
	Savings	500	263
	Other	263	0

Keep in mind that your budget should reflect what is important to you. For example, if saving for a house is a priority, savings should be increased before entertainment.

Happy budgeting!

9: Take advantage of things that are free/discounted

This post is a continuation of the post 10 ways to reduce your monthly expenses. Here is number nine on the list, and how we accomplished it.

9. Take advantage of things that are free/discounted

 

Books – I love to read and it’s very hard for me to walk into a bookstore without walking out with up to three books. However, buying so many books and then reading them once can really be expensive. Our local library has a great selection of books, and I can even put books from the library on my Kindle! This has made reading much easier, and easier to not spend money on books. See my page of books to find books I've read on my Kindle.

Movies – We like to rent/see movies, but seeing a movie is really expensive, and renting a movie (even from RedBox) can really add up. Our local library also has a great selection of movies! We do have to be on a waiting list for most of the new ones, but we’re not that picky about our movies.

If we really want to see a movie in theaters, (it’s an experience, and getting out of the house is definitely a plus!) we see them on Sundays, because a local theater does $5 movies on Sundays. This is much preferred to the $10/ticket we’d normally pay. Most movie theaters have a night of the week that is less expensive, like a Tuesday, when people don’t see movies as much.

Coupons – We haven’t quite gotten into the extreme couponing that is possible, but we save coupons to the restaurants we frequent most, and try to only go if we have a coupon we can use.

Clothes – Clothes go on sale all the time. I have found that unless I specifically need an item of clothing (a new pair of tennis shoes, a replacement for my one black camisole, etc), clothes can wait awhile. So, if you think you’ll want a new bathing suit next summer, buy it at the end of this summer when they are on sale. Alternatively, you could wait until you have a coupon.

Gym Membership – I can appreciate wanting a gym membership, but they are expensive, and usually aren’t used as much as they should be to be getting your money’s worth. If you live in an apartment with a fitness room, you can use that instead of a gym. If you own a home, it’s possible that your HOA fees include a membership to the local rec center. If neither of these is an option, a good alternative to a gym membership is a small set of weights at home and a couple good exercise videos.

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7-8: benefits of marriage

This post is a continuation of the post 10 ways to reduce your monthly expenses. Here are numbers seven and eight on the list, and how we accomplished them.

These two things are things we could combine and save money on when we got married.

7. Combine car insurance

When we got married, we were eligible to combine our car insurance, as well as our renter’s insurance. This brought our total insurance payment down by a small amount. (This wasn’t a huge expense cut for us, but it did contribute a little.)

8. Combine health insurance

Alex was getting private insurance, since he owned his own business, and the payment was about $200/month. My insurance as a single person through work was $80/month, coming to a total of $280. Adding him to my insurance at work when we got married brought our total payment to $180/month.

Even if one of you is not paying an exorbitant amount for private insurance, combining to one insurance carrier through one of your employers will most likely be cheaper than each holding your own insurance separately.

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5-6: cheaper living expenses

This post is a continuation of the post 10 ways to reduce your monthly expenses. Here are numbers five and six on the list, and how we accomplished them.

5.  Switch to a cheaper cell phone plan

When Alex started his business, we determined that he’d be on the phone a lot, so we decided we’d need unlimited cell phone minutes. We were paying about $170/month for a big name cell phone company. We switched to StraightTalk, and now pay only $90/month for unlimited talk, text, and data. We have experienced a slight cut in service, but nothing we can’t deal with for the price cut.

6. Minimize rent/mortgage payment

This is another one we didn’t do after Alex moved in, rather, I did it when I moved into the apartment. I picked an apartment with a fairly low monthly rent, even though the apartment isn’t the biggest/nicest apartment I could have gotten. Keeping that payment low has really helped us control our monthly expenses. We currently live in a 1-br apartment, and have worked really hard to minimize our stuff to be able to stay here as long as possible. It's easily saving us more than $300/month to not rent a 2 or 3-br apartment. If you have a mortgage payment, it might be worth looking into refinancing to minimize the payment.

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