When I started this blog, we were living on a really tight budget. It’s still tight, to be honest, but there’s a little more room to breathe these days. (Or do things like build a pretty decent emergency fund and save for a house.)
Part of the reason things have gotten better is that our income has increased. When you’re low-income, this is one of the best ways to eradicate your financial woes. It hasn’t been an easy or quick process, but it has been the #1 thing that’s helped us on our journey.
But another huge reason things have gotten better is that we’ve cut our expenses in a big way. We’ve looked at our monthly bills and slashed them. Now that we’ve gotten to a point where increased income is possible, that extra money that would have gone to major corporations can now be saved and invested into our future. There’s lots of little ways we’ve saved in our day-to-day life, but these are the three big ones that have been consistent and major game changers:
1. We cut our cable. $1,440 savings/year.
Initially, this was a painful process. We had to have cable for the best sports packages. We are from Pittsburgh, after all. Not every Penguins game and hardly any Pirates games are on broadcast TV. Then, since we had the bigger package anyways, why not tack on HBO for $20/month? Game of Thrones, anyone?
But the price tag was insane. We were paying $170/month for our internet and cable. That number was unacceptable. So we cut it. We waited to go in on buying seasons of Game of Thrones on Blu-Ray/DVD with friends when they came out. The husband gets a lot of his hockey fix via radio. Missing Pirates games is still painful, but in a real pinch we can visit our friends who still pay for the bigger packages. Or even just go to the game itself.
When we cut it, we found out that by keeping the basic-est of basic cable we actually reduced our internet bill. So now we pay $50/month. If we just had internet, it would be closer to $56. The savings, my friends, is worth it.
2. We switched cell phone carriers. $1,560/year.
We always knew our cell phone bill was too high. We tried to take the smallest packages, and only got a smart phone when our carrier didn’t have a flip phone option for us at renewal. Then something amazing happened. I discovered Republic Wireless. Before we were paying $180 + occasional mystery charges to one of the major providers. When we switched, we got fancier phones and a bigger data package for $50/month total for the both of us. Same service at an astronomically lower price? I don’t know why everybody doesn’t do it. (Unless Sprint has shoddy service in your area. Then you shouldn’t do it.)
3. We paid off one of our cars. And kept it. $1,380/year.
I’m not completely against car loans. I’m probably one of the few frugal bloggers who will say that, because a car is a depreciating asset. I used to drive beaters, and they all cost me a ton of money in repairs and inconveniences. So to buy a barely-used car that wouldn’t have as many problems was a no-brainer for us. Significantly less spent on maintenance monthly. Significantly less than we would have spent on a loan for a brand, sparkling new automobile.
In 2012 I paid off my car completely. I paid it off a few months early, saving about $60 in interest. Not a lot, but you know what they say about a penny saved…. More importantly we kept that car. We take good care of it, and while it’s not the sexiest thing on earth and is a decade out of style, it’s still serving us well 3 years later. (Knock on wood for me!)
That car payment was about $115/month. By kicking it to the curb, and driving our vehicle until it bites the dust, we’ve saved $1,380/year, assuming that we could get a similar loan on a vehicle that was only a year out of style.
We cut our expenses by a grand total of $4,380/year.
Like I said before, there are still little things we do everyday that add up in a big way, but if you have to or want to cut your budget by thousands, look into those monthly bills. Look into the services you’re likely paying too much for. When you finish paying something off, don’t immediately search to replace it with the latest and greatest thing. Our cable cut allowed us to learn to live on less. Our cell phone switch allowed us to get more for our money. And paying off and keeping our car taught us to appreciate and take care of what we have.