Cutting Your Monthly Bills: We are trying to cut our budget, but don't know where to start. What are the easiest places to make changes in our budget?

First thing you need to do is look at last month's bank statement and see where your money went. 

There will be two main types of spending.  First there are the kind of things that you could have on auto pay like your rent/mortgage, your utilities, cable, phone, insurances.  These are basically things you would classify as "bills" and that you planned ahead to spend money on.  Think of these expenses as the freight trains of your budget.  They are very big and go on forever, but if you put them on the right track, they basically steer themselves and rarely need correcting.
 
The second type is the money you spent more impulsively like restaurants, shopping, gas, post office, etc.  These are things that just happen in life and you spend money in the moment.  This type of spending can be a lot more complicated to control because it's a daily battle.  Think of these expenses as the flies of your life.  They are small, fast, and virtually harmless,  but if left unchecked, they can cause you some serious problems. Flies can be very difficult to control, so we'll tackle your "Budget Flies" in a later post.

"Budget Trains"
This first type of spending is the quickest and least painful place to save. You make a quick decision once, and it takes care of itself month after month.  Let's break it down into  a few basic categories.

Media/Communication:
Things like phone, Internet, and cable all have different "packages" you can buy into.  You also are likely to have more than one option of who to purchase these services from.  So look at your phone bill: do you have a cell number and a land line? Maybe you don't need the land line. Most cell phone companies will analyze your bill to find out if there is a better plan that fits your usage habits.  Call a competing Internet provider and find out if you can get a better rate bundling your Internet and phone bills together.  Consider canceling your cable or satellite TV (you'd be surprised at how quickly the stress and noise level go down at your house once TV is gone!).  Often you don't even need to cancel your cable to save money.  Usually when you call to cancel a particular service, the company will try to win back your loyalty by offering you a special promotional price.  You could likely end up keeping the exact same TV service but paying a much smaller fee for it!  Remember you are the customer, and all these places want your business.  They need you, you don't need them.

Insurance:
If you pay a monthly medical insurance premium (or have it deducted from your paycheck), make sure you are getting the best insurance for your buck.  Would you be better off with a higher or lower deductible? Same with your car and home owner's insurance.  Do a quick online search and see if you can get a better rate somewhere else.  Also check to see if you can receive a discount for paying upfront every six months instead of monthly.  What is 15 minutes of your time worth?  You could save more than that in the first month.  And the great thing is it's a one time effort on your part that will save you money every month in the future. 

Utilities:
You can control your energy and water usage with a few simple  modifications.  Put a timer on your thermostat that can be set to automatically turn your heat down at night and when you are away from home.  Get a low flow shower head.  They only cost a few dollars and they increase your water pressure while decreasing the amount of water you actually use.  Turn the thermostat on your hot water heater down.  Get weather stripping for your doors and windows.  The list goes on and on, and so does the money you'll save from it.  Some utility companies will do a free energy audit and evaluate your homes energy usage and give you suggestions on how to improve the efficiency of your home.  Ask your utility company if they offer this type of service, and while you have them on the phone you can also ask them if they offer any type of discount for having your account set up on an automatic payment plan.

Rent/Mortgage:
Most people look at this as an expense that's set in stone, but it really isn't.  If you are renting, consider looking for someplace cheaper.  If you own your home, consider refinancing or downsizing.  This won't work for everyone, but if your are serious about looking to cut your spending, you should consider all options.

Fines and Fees:
While we're talking about bills, lets talk about what you may be doing wrong that's costing you big bucks.  Late payments = Fees.  If you can, set up as many of your bills as you can on auto-pay, so you will never have to worry about racking up late fees.  So go pick up the phone right now and spend a few minutes doing something that will pay off big again and again.  Good luck!



Marcia