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Cutting Costs for the Household with Budget Priorities

July 25, 2012

We have a strict budget in our household that we rarely veer from, even a bit. Our priorities dictate that we save as much as we can for the future so that we won’t have to be in debt for any future purchases (even large ones like vehicles or housing), while still enjoying what we have now. We leave below our means – and have not been in debt at all. We own both of our vehicles, and have a substantial savings for both a future house and we’ve started a retirement fund with a Roth IRA. There’s no right way for everyone – and besides basic needs like food, a home, and clothing, the priorities & what makes you happy may be dramatically different than our household, especially since all households are different sizes, different loves and hobbies, and different income levels. This is the list of how our household cut costs, live below our means and stay happy. Our budget indicates that our basic needs – housing, food, vehicle fuel and maintenance, insurance, taxes and car inspections, utilities, frog supplies, etc – take up about 1/2 of our unsteady income. A quarter we keep for extras – entertainment, charities, any non-necessary purchases, vacations, gardening supplies, etc. The other quarter we stash for savings – divided between 4 accounts that each have their own goal. The rule of our household is that once it goes into the savings accounts, it doesn’t come out, so we have to make sure that our “extra” for every day living has enough to cover unforeseen expenses like brake pads and visitors dropping in. How do we keep the costs down so that we can stay within budget? First and foremost, we have the goals for the accounts and know balance of our checking account every day. Monitoring what we have at all times keeps us aware of what we’re spending and when we’ve overspent. Just like a diet where you burn off more calories that you take in; you reduce your debt or grow your savings by spending less than you take in. We are careful about our spending – we would rather “spend smart” if we’re going to give our hard-earned money to anyone. What do we do to cut down on our spending and “spend smart”?

– We use coupons. Not just for the grocery store. We use coupons for oil changes, frog food, hotels, medicine, restaurants, movie theatres, clothes, and museum admissions. If there’s no coupon for it, we try to get a Groupon or Living Social deal for the place. Where do we get all these? Electronic coupons, the newspaper, and I sign up for emails from my favorite companies and follow them on social media. We try not to only purchase anything at that business unless I can use a coupon or it’s on sale. Another good practice is to price match at stores.  I also keep a price book to make sure that the coupon makes it a good deal – I once received a coupon in the mail for an oil change for $24.95 that didn’t include disposal fee or filter, then found one in our local “Clipper” magazine for $19.95 that not only included the disposal fee and filter, but topped off my fluids as well. It pays to shop around and know your personal price point that you can, or are willing, to pay. If we need something that’s full price, it’s okay and not something to stress over, but it’s all in moderation and should be worth the full price.

-We stock up on what we want to buy, like food, lightbulbs, or Tshirts, when the items are on sale so we don’t pay full price. We have our list of items (like if Cheerios go under $1.50 a box or V8 Fusion is under $1.50 a bottle) that indicate a “stock up” price in our price book and I grab what will not expire or go bad before I can use it.

-We forgo the latest technology.  The one cell phone in our household makes phone calls only. We have DSL internet. We have a video game system, but just 1 and it’s a couple years old with a few used games. We don’t pay $16 a month for netflix and hulu plus, let alone cable. Our cars don’t have satellite radio and a top of the line GPS and bluetooth systems. Some families need technology for their careers, to manage their schedules, or for personal reasons. If we don’t need it, we don’t get it. Would it be nice to have a smartphone that offers the convenience of looking up prices online or acting as a GPS? Sure, but the monthly fee for a plan and the cost of the phone doesn’t work for my budget, and it’s not a necessity for my job. We do have both a desktop and laptop computer, both bought within the last year, but one was needed for school and one for a job. So that came from our “extra” fund, since it was a necessity.

We plan gifts in advance. We don’t pay full price for gifts for anyone (except if you’ve gotten a gift from us, you’re the exception). We know birthdays and holidays and have a plan (and budget) of each person that we purchase gifts for. Most importantly for us, we don’t buy gifts because we feel we have to, but because we want to.

-We keep our entertainment as cheap as possible. We are frequent patrons of our public library for books and movies, we buy items either used or with a steep discount, and we scour our local festivals and community events for weekend outings. Our local Cities on the Cheap website has a free events sections as well as our local city paper, and we have a list of when our local museums offer free admission for a few hours each week. We prioritize what shows, concerts or movies we’d like to see, and choose alternatives when necessary. Most importantly, if we overspend in one area, we have to cut down in another. If we go out to dinner to celebrate our anniversary, then we have a movie night in. If we go see a free preview or the latest release (during matinee hours of course), we learn how to cook an exotic meal for dinner.

-We make it. Meals, decor, cleaners, any chance to reuse what we have for a new purpose. For a picky eater like me, I can usually cook it better, cheaper and more customized than any restaurant! It’s green living, and frugal too.

We buy the items and services that are worth the full price. If not, it’s not worth buying. I’ve had times where coupons didn’t ring up, sales weren’t taken off, or there was an item mixup. Buying something because it’s a “deal’ prevents those feelings of remorse of buying something you don’t need just because it’s cheap. I don’t buy every deal I post on here – because spending money is not the goal, no matter how much of a “steal” it is. Saving money is, though, and I’ve learned the hard way that the thrill of scoring a deal is not worth spending my hard earned money on things I don’t need.

-We try to make extra money. Mystery shopping, selling on Ebay, putting old textbooks on Amazon, writing articles for Yahoo voices. Any extra money is worked into the budget as income (rather than play money) and treated to the same scrutiny as a paycheck.

-We wait for big purchases. For us, big purchases are items that cost $25 or more each. During this time, we contemplate on whether we really need it or if a cheaper alternative will do, and to find the best price for the item. This is for both replacements and new things being introduced to our environment, and we do research on prices, quality, the competition and the alternatives. And if it doesn’t fit in our budget for this month, we wait until it does.

Through it all, even though we limit our consumption and try and make do with what we have, we don’t feel deprived or limited at all. We’re thankful for what do have, don’t focus on what we don’t, and our “treats” aren’t fancy dinners or big-ticket electronic items, but quality time with those we love.

No family or household is the same, and priorities are different for all. But hopefully this post gets you thinking about your own household budget and priorities so you can make the best decision on how to spend your own hard-earned money!

(for a picky eater like me, I can usually cook it better, cheaper and more customized than any restaurant)

From → money management

One Comment
  1. I like this people should evaluate finances this way

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