Tracking where every single penny comes from and where it goes is extremely tedious, but oh so powerful.
I have been able to optimize when to make extra debt payments, avoiding unnecessary interest. I’ve optimized our savings, allowing me to make those payments to the exact penny. And I’ve identified recurring expenses that add no value to our family.
I understand my family in a whole new way just because I am constantly monitoring our cash flow.
What Am I Doing?
Developing Frugal Tendencies
After seeing a few months of our recent spending, my wife and I spotted some areas for improvement pretty quickly. Below are 10 things we did to immediately free up extra cash in order to accelerate paying off our debts.
1. Turn off the lights
In a previous post I mentioned some absurd electric bills. My family had a tendency to leave lights on all over the house. After seeing what that can mean to our bottom line, my wife and I make a conscious effort to turn off lights when we leave a room. We’ve even started to leave our blinds open longer in the summer months so we don’t have to turn lights on as early. And with a 5 and 3 year old, I have a tendency to walk through the house at random looking for lights to turn off. It’s also a great way to get extra steps. No more $200+ electric bills since we started this practice.
Savings: $50 per month
2. Cut that cord
So long cable. We got an attic antennae for local channels and still have Disney movies for our daughters, outside of that we’re cable free. I’ve found the transition hasn’t been as hard as I had expected. My family spends more time listening to Pandora or talking to one another. (gasp!) I also have a lot more extra time on my hands, I read more about personal finance and I started a blog. This might have something to do with our reduced electric bill as well.
Savings: $80 per month
3. Pack a lunch
My wife works at an elementary school so she almost never spends money on lunch. I, on the other hand, spent far too much. I’ve always known I shouldn’t spend so much, but it was just too easy to rationalize.
- It’s a bonding experience with the team
- I don’t have time to make my lunch in the morning
- It’s really not that much
Nothing can hide from our monthly cash flow statement. It really was that much.
Savings: $70 per month
4. Make a list
Sure my wife wasn’t wasting money on lunches, but she didn’t escape our new frugal tendencies unscathed. The way she used to spend money at Target almost had me convinced she was a major shareholder. She just couldn’t help herself. She would come home with a large shopping bag after dropping way too much money and I would chastise away. It didn’t help. I’d hear things like “well the cat needed food, so I just ran in really quick, and then I found this cute shirt for one of the girls.” She was never able to fully explain to me how she managed to end up in the clothing department while shopping for cat food.
We’ve since shuffled duties. When we need something, she’ll make a list and I go pick it up. I’m the world’s worst shopper. I have 0 interest in it. If something is on the list a grab it, if we need it and it isn’t on the list? We’re probably looking at a second trip. Play to your strengths folks.
Savings: $20-$50 per month
5. Cell Phones
Dear god were we spending money on phone service. I actually received a 35% discount through my employer and we were still spending $130 a month on cells. Just the service! No financed phone purchase built into that number.
We’ve since moved to Google Project Fi, which I’m more than happy with and saved a ton of money. We are paying $35 for unlimited talk and text and $10 per gig for data. The coolest part about this plan is, if we go over our data we only get charged a prorated rate at $10 per gig. To counter that, if we stay under our limit we are credited $10 per gig, prorated. Tough to beat that. As a side benefit I’m playing less phone video games at the office.
If you decide to switch to Project Fi, please consider using my referral code: 85A46F. You’ll receive a $20 credit after you’ve been active for 30 days, and so will I!
Savings: $95 per month
We were spending way too much on groceries. We always told ourselves, this is just what it takes to feed a family of 5. Nope! We were just lazy and preferred the posh grocery store down the street. My wife, to her credit, found Aldi. We’ve always been skeptical of Aldi, but she checked it out based on a recommendation from a neighbor. I hope you’re all sitting down for this, the food at Aldi…is normal. Not only is it normal, but Aldi is owned by Trader Joe’s, so we can be frugal and hipster all at once.
In all seriousness, I’d wager a significant amount of money that the Aldi brand whatever and the Trader Joe’s brand are made and packaged in the same facilities. They just glue different labels on at the end of the day.
We still need to go to the posh grocery store for some things, but not if we can avoid it.
Savings: $75-$100 per month
My weakness. I didn’t cut alcohol out completely, but I’ve significantly cut back. I now use exercise as a release as opposed to self medicating. This one has had the added benefit of improving my health as well (I’ve lost 30 pounds in 6 months). Now that I think about it, I’m sure cutting out the lunches helped as well. We still enjoy a glass of wine fairly regularly, but we’ve switched to boxed wine as opposed to bottles. Something in my DNA drives me to complete what I’ve started, which spelled trouble for a bottles of wine. While driving up our expenses.
Savings: $20-$30 per month
8. Stay In
Rounding out the food category, we eat in more often. My wife is actually a pretty decent cook and the meals she prepares are fairly healthy. Sure it takes more effort to make the food and clean up than if we were to go to a restaurant or order a pizza, but I’ve come to cherish our family dinners.
I really should source this, but I read somewhere by the time your child has finished high school, you will have spent 80% of your time with them. I figure the moody teenage years in high school, likely won’t be that great, so family dinners are now far more important to me.
Savings: $40-$60 per month
9. Stop Shaving
Yep, I stopped shaving. Plus side: no more razors. Down side: I look like Grizzly Adams.
I had joined Dollar Shave Club to reduce this cost, so nothing too earth shattering here, but every bit helps.
Savings: $9 per month
10. F it, I’ll stop getting my hair cut too
Seriously, no more barber shops. OK, not exactly the same as no more haircuts, but a pretty big monthly saving. Also, I don’t look like Grizzly Adams, I bought myself a nice electric razor with several guards and multiple attachments. This now serves as my primary razor and my wife has gotten pretty competent at cutting my hair.
I did have a coworker as if I was being sent to basic training after my first cut. But in all honesty that was my own doing while she was out shopping. Now, I’m rocking a standard fade that looks like it was professionally done.
Savings: $45 per month
So how has life been since making these adjustments and exercising our frugal tendencies? Well, I’m enjoying my family more. Other than that, I don’t notice the difference.
If you’re skeptical think back to that lunch you had out back in January, how much better off are you today because of it? Not much? How about that nice, but not too expensive bottle of wine from March? Same answer?
I’ve said it before and I’ll keep saying it. Being frugal isn’t synonymous with being cheap. I will absolutely spend money where there’s value. I just try to avoid it where there isn’t value.
Any cost cutting strategies that have worked for you? I’d love to hear from you in the comments!