Reducing Expenses Isn’t Easy but Can Be Fun
When we had our “Come to Jesus” moment and realized our lives were on a collision course to bankruptcy, we realized we needed to start focus on reducing expenses. As John always said, “We gotta stop the bleeding.”
We wanted our lives to still be fun. Duh! “Have Fun” is in our tag line. Instead of cutting out all of our fun, we focused on reducing expenses in several categories rather than eliminate categories altogether.
Reducing Expenses from Cable to Wine
Hallmark is good at capitalizing on holidays. They’re cards are nice and aren’t terribly expensive. There are cheaper card companies, but Hallmark a good middle-market product. There are more expensive card companies. The shorter of the two of us loves Papyrus Cards. They’re intricate, festive and unique. They’re also $6+. Target has a $0.99 card section. Is spending five times that a vice or a virtue?
Another example is wine. We love wine! We hosted a game night recently and our friends brought a couple nice bottles of wine. After we finished the bottles, we were tempted to tap into our wine collection for better (read more expensive) wine.
Cooler heads prevailed. We opened our not-so-expensive (NSE) Bota Box of Zinfandel or Cardboardeaux. We had a great time and didn’t give into our vice.
Our Top 10 Expenses Reduced
What can you reduce to save money? Below are our suggestions:
- Brand name products – We were the kings of brand names at one time, but store brands are as good as name brands in many case. Shop at The Dollar Store, Big Lots or other similar store for basic home products such as dish detergent, soaps, shampoos, household cleaners, some kitchen supplies and more.
- Cable – One of our first steps in reducing expenses was to cut the cord. Even if you’re not ready to cut the cord completely, and with Hulu and Netflix we don’t know why not, you can lower your payments by going to a cheaper plan. Going from a premier to a basic package with Comcast saves about $50 a month, $600 a year. If you can’t stomach cutting back on sports packages, try Sling, where you can stream ESPN and other cable-only channels for as low as $20.
- Entertainment – The Internet is full of recommendations to entertain yourself and your family for free or cheap, such as The Simple Dollar and Mr. Free Stuff. If you’re lucky, your city or state lists things to do such as Denver.org. Not all of it is free or cheap, but with a little searching you can find things that will fit your budget. We build a calendar and planned our activities around free or cheap events.
- Movies – A 3D IMAX movie these days goes for $16 a ticket. For an $8 per month subscription to Netflix you have access to an unlimited number of movies. It may be worthwhile to spend $65 on a third-generation of Apple TV and rent a higher grade, more current movie for $5. Not only is the cost of seeing the movie cheaper, but homemade or store bought popcorn and other treats are cheaper and healthier than at the movie theater. If this doesn’t work, we now go the coupon route when we go see most movies.
- Phones – If you’re cut back, saving money or paying off debt, get a free phone with a cheap plan and save $100 or more. We delayed upgrading our phones for two years when we were getting out of debt. This saved us $30 per month.
- Credit Cards – If you’re not of the rare breed that can religiously pay off credit card balances monthly, not using your credit card can save hundreds to thousands of dollars a year. Considering that most interest rates on credit cards are between 10%-18%, you’re paying 10%-18% more than you should on your purchases. Those credit card perks may not be worth it. Use companies such as Payoff or SoFi to refinance your debt.
- Groceries – Save $1,560 by not prematurely throwing away food. Create a weekly grocery list and menu. On average, we spend an additional $30-$50 per week if we go to the store without a grocery list. That’s $1,560-$2,600 annually of unnecessary expenses. Investing $1,560 annually into a retirement account for 10 years at 6% interest equals $24,590. That’s better than throwing away food and over eating.
- Coffee – Brew coffee at home or at work with a French Press. We don’t think Starbucks is the evil empire you must avoid at all costs, but the average Starbucks trip costs customers $5. Most towns and cities have at least one coffee shop that sells locally roasted coffee by the pound. A pound of coffee yields about 45 eight-ounce cups of coffee. If that pound of coffee costs $12, that’s $0.27 per cup, saving about $4.73 per cup compared to Starbucks. If you’re hitting Starbucks three times every week, you’d save $737.88 annually.
- Prepared Foods – Americans spend a lot of money on prepared food. Take popcorn, for example. A 10-serving box of Pop Secret Homestyle Microwave Popcorn costs $4.98 at Walmart. That equals $0.498 per serving. Also for $4.98, Walmart sells a 3.2 pound container of Orville Redenbacher un-popped popcorn that yields 32 servings. That equals $0.156 per serving. Popping popcorn saves $0.342 a serving. That’s a $10.94 savings with one container of Orville. That adds up and that’s just one example. Make your own pizza. Marinate your own chicken. Bake your own cookies. Fry your own potato chips. An added benefit to cooking from scratch is that you’re in control of the ingredients. Anything you cook will be healthier than anything you buy. Eating healthy, also, reduces long-term medical care expenses.
- Books – If you’re still buying books from a bookstore, you’re paying too much. Your local library has free books and you can’t beat free. If that’s not up your alley, convert to eBooks. Used Kindles go for less than $50. Amazon offers close to 3 million free eBooks. That’s $0.00! After reading eight to 10 books, you’re Kindle has paid for itself.
These are just 10 ways we cut back on when reducing expenses. You may think our lives got boring, but we saved enough money to pay off $51,000 in credit card debt in two and a half years and socked away over $2,500 that we used for our reward vacation to Mexico the month after we became debt free.
Where have you cut back and how much are you saving?
Other articles for you:
- What We Loved about Gay Puerto Vallarta
- 16 Bottles of Wine for Under $16
- 5 Meals That Make Themselves While You’re at the Gym