Welcome to 31 Days to Organize Your Finances. By the end of the month, my goal is to help you have a detailed financial plan for your family. We’ll talk about cash flow, budgets, debts, and all of the nitty gritty of our finances that might not be fun to talk about, but are so important to discuss. Please refer back to the original post for a complete list of daily assignments.
Yesterday’s assignment was to figure out where you are spending money. Today, we’re going to analyze those numbers and challenge ourselves to improve them.
Today’s assignment: Reduce Your Spending in at least 3 Budget Categories. You can choose to challenge yourself to more categories, but three is a good number to start with.
I want to be clear, I don’t want to live a life of lack. It is my personal mission as the household manager for my family to live well, but I want us to do so on less money. I want my family to enjoy life, but we also have some pretty serious financial goals that we are trying to achieve.
When reviewing your spending from the previous challenge, realize there are two types of spending categories: Fixed and Variable. A fixed budget category doesn’t change from month to month and there is really nothing you can do to alter the amount. Fixed categories are things like your mortgage/rent, insurance premiums, and car payments. Variable categories change monthly depending on your spending habits and include categories like groceries, dining out, clothing, utilities, and entertainment.
To find three categories to reduce, take a look at your variable expenses.
I’ve identified 5 categories that my husband and I have been able to significantly reduce over the years.
The 5 Easiest Categories to Reduce
I talk a lot about grocery spending on this blog. It is by far the easiest & quickest category to reduce in a household budget. My absolute #1 way for saving money at the grocery store is to PLAN OUR MEALS. If you make this one simple change, you will reduce your grocery spending. When you walk into a grocery store with a plan, you eliminate impulse & duplicate purchases. You will not only save yourself money, but also time. I encourage you to read my post, 11 Simple Meal Planning Tips.
You might also want to read, 35 Money-Saving Grocery Tips. Even if you are a sharp grocery shopper, you might learn a few new tricks.
2. Dining Out
Restaurants can be a huge drain on a budget, but there are ways to enjoy a meal out without spending a lot of money. We used to spend hundreds of dollars a month going out to eat at restaurants. We are now more committed to saving the money and we eat mostly at home, BUT we do enjoy at least one meal out each month. I shared our strategies in this post, How to Save Money at a Restaurant and Enjoy a Meal Out.
- Heating – Plan a Low Heat Challenge. Pile on the extra blankets and sweatshirts because it’s a great time of year to see how low you can go.
- Cable & Land Line – Due to a humongous price increase and a company who didn’t want to negotiate, we cancelled our cable & land line. If this interests you, also read, How We Watch Really Great TV Without Cable.
- Do you pay for water? Unless you have a well, you probably pay for your water. Here’s 7 Tips to Conserve Water and Save Money.
4. Gym Membership
My husband volunteers at our local YMCA for a free family membership. It saves us $67 a month. Read How to Get a FREE Gym Membership for more details.
- Thrift: I regularly stop by my favorite local thrift store and find crazy bargains. I’ve found new or gently worn name brand clothing, snow gear, shoes, household stuff, and books. I keep a list of needs with me so I’m not buying stuff we don’t need.
- Borrow: For one-time special occasions, ask friends if you can borrow instead of buying new. My mother recently borrowed some luggage from us for a plane trip. She hasn’t flown in 20 years and probably won’t fly again for sometime, so she didn’t’ want to buy a carry-on suit case. Another example is when a friend borrowed some dressy shoes of mine to wear to a black tie affair. I don’t know about you, but we don’t go to too many black tie affairs. However, I happened to have a cute pair of strappy dressy shoes and I was happy to lend them to her. I think I’ve worn the shoes 3 times in the 10+ years I’ve had the shoes.
Some of you might think, “but Kristia, there’s nothing to cut.” I challenge you to take another look at your spending anyway to see if you can find some wiggle room.
What 3 Categories can you reduce? Do you have other ideas than the 5 I’ve listed? Please let us know in the comments.