Increasing Your Budget by Decreasing Your Bills

Increasing Your Budget by Decreasing Your Bills

I would really like to take a little bit of my time discussing how to create a budget and how to get rid of things we don’t need to pay for things we do need. As I have stated before, we are by no means “fancy.” We live in an apartment that we maintain very well and decorate as much as possible with what we have. We have furniture that has been bought for a decent price or has been passed down. We do not have a 60 inch LCD TV in the living room (we do have a 47-inch projector screen tv that was given to us by a wonderful woman, though). We do not have a crazy expensive cell phone bill, cable bill, etc. We have a nice, reliable car that we maintain very well, but it is by no means a nice new Escalade. We live comfortably. Life isn’t about the material things we possess. It’s about how well we do with what we have. There will always be someone with way more than we have – better home, car, tv, etc. and there will also be someone who wishes to have a warm bed at night. If you’re struggling to make ends meet each month, maybe you should find a way to cut down on things you really don’t need or use. Here are some of my tips on how to cut costs.

1. Cancel your cable/satellite – Do you really watch tv or do your kids have control of the tv with Nick Jr. on all day? We do not have cable (well, we do right now because of rewiring in our building, but we don’t pay for it, lol). We canceled our cable about 5 months ago (maybe closer to 6) and cut our cable bill down from $120/month to only $40/month (for internet). Paid $80 for cable! Just the thought of spending that to watch 1 channel all day/night makes me so annoyed.

Alternative: Sign up for Netflix. $7.99/month gets you 1 DVD (at one time) OR unlimited streaming through your Wii, Play Station, XBox, whatever. They have Dora, Diego, Spongebob, 30 Rock, Monk, Family Guy, etc. The list is crazy long. They have shows and movies. It is so much cheaper than cable and it can be hooked right up to your tv. There is also, which allows you to watch shows that have aired on TV recently, like House, Modern Family, etc. The best part is that it’s FREE! You won’t get to watch your show the minute it airs, though. We watch House and we have to wait 8 days from the air date, but that’s okay with us. You can, however, pay $7.99/month for HuluPlus. It’s a lot like Netflix and you can watch shows the next day after the airing date (maybe even sooner..). So, $7.99 (Netflix) + $7.99 (HuluPlus) = $14.98/month. Cable = $80/month. That is a $62 savings per month or $744 per year! Just think what you could do with that extra cash.

2. Get rid of your contract cell phone – Yeah.. contracts are a pain in you know what and from experience, even more so with cell phones. They will try to nickel and dime every little thing you do. They tell you when you can upgrade to a new phone, they tell you that in order to decrease minutes on your plan, you’ll need to add 2 more years to your contract. Yeah.. to me, BIG waste of money and potentially damaging to your credit if you cannot pay on time each month.

Alternative: Go prepaid. I know what you’re thinking. “Prepaid? Huh?”, but it is so great. You can change phones whenever you want to, upgrade & downgrade your plan whenever you want to, etc. You may not be willing to give up your fancy HTC Evo, iPhone, whatever, but prepaid phones have come a long way. My Fiance and I both have a Virgin Mobile phone, the new LG Optimus V, which is an Android-powered phone. It’s identical to the LG Optimus S (Sprint) and T (TMobile), but without the huge data plan attached to it. Think about how much you spend per month on your phone for unlimited text, data, web, pictures and minutes. We pay $25/month for 300 minutes each (suits our needs completely fine), unlimited text, data, web, pictures, etc. No contracts, no activation fees (those are so expensive anymore), no “paying a month in advance”, no nothing. We can stop payment and start payment whenever we feel like it. We’re the ones in control.. not the phone company. Average monthly plan for an individual (with contract phone) – 450 minutes, unlimited text, 2GB data (yes, they limit your data usage now) = $70 (non-smart phone) + $36 activation fee + 2 year contract. Wow.. makes me really glad to not have that on my shoulders. Remember, if you lose your job and cannot pay, they will charge you a $200 early termination fee plus any money you owe on your bill statement. So, you could be saving crazy amounts of money by switching to a prepaid plan.

3. Create a monthly budget for food and household items – For my family of 3, I have created a budget of $300/month for food, health, beauty and household items. Last month (January) I came in under my budget by $48! I love that I have created a set amount I am willing to spend each month. It makes me more aware of how much I really am spending. Since starting coupons, I just shopped whenever there was a great deal. It didn’t matter how much I had already spent that month. If there was a deal where I’d spend $20 for $100 worth of items, I was going to do it. Now, my thinking has changed dramatically. I don’t go to CVS, Rite Aid or Walgreens every week. I go maybe twice a month to only 1 of those stores to stock up on things I’m not currently stocked on (toilet paper, paper towel, etc.). I stay well within my budget and am very proud of myself at the end of the month. It doesn’t matter if you had a savings of 99%, what matters is how much you spent and if you spent more than you can cover later on. Does that make sense?

What I suggest – To find a starting budget for your family, think about how much you spend a month on groceries, health, and household items a month. For a family of 4, it’s been said that the average grocery spending was around $240/week! I spend $60 more for a MONTH and that includes health/household items as well! That is just insane. My suggestion for a family of 4 would be $350/month on grocery, health, beauty and household items. It does truly depend on what items you will never give up. Like me, I will not give up my organic coffee that never goes on sale and never has a coupon. I will not give up my steak dinner night once a month either. I also use this GREAT program that I downloaded from The Coupon Project. Angela made this program and it’s really been quite helpful to me. So much so that I’m recommended you download and use it yourself. The Savings Tracker is just awesome. Here is a picture of some of my January spending/saving (click for a bigger picture).

I do realize this is not ideal for everyone. I do have to say this though – If you are struggling to make your bills every month, that is when you need to change how you are spending your money. Cable is a want, not a need. Electricity is a need. I would much rather have heat than cable. In no way am I trying to tell you how to spend your money, but that is a situation that would immediately need to be changed. If you have the money and are okay with spending $80/month on cable, then, by all means, go right ahead. It’s your choice.

I hope that I have helped you in some way and that you take these suggestions and work on improving your budget. Things are never as hard as they may seem to ;)Remember that. Good luck. Let me know if you have any great money saving tips with a comment below.