There is nothing creative about our rule to not spend money if we do not need to. But there are many ways in which we can be creative about spending as little as possible and saving money while on a tight budget.
Living comfortably on a tight budget involves planning and a commitment to stick to your rules and budget, even when unexpected expenses come up. Say, for example, when your son destroys part of the plaster wall in his room because he “accidentally” took down the curtain rod while he was “sleeping” during his nap, and now you have to make a trip to The Home Depot to buy materials to fix the hole in the wall. The first thing you shouldn’t do when an unexpected expense arises is stress out about it. Easier said than done, I know. Instead, focus on finding a solution because your solution — no matter how creative you need to be to find a solution and execute that solution — will make you feel a whole lot better than thinking that your a$$ is going to go broke. Little expenses are easier to address than huge financial problems. But the little things sure do have a way of creating a lot of stress and anxiety in our lives.
Last week on this blog I mentioned that my husband and I made a list of what we spend our money on. We then reviewed the last few months of our checking account history to quickly identify spending habits that are not suitable for our current financial situation. Now it is time to dive a little deeper. How can we maximize paychecks? How can we minimize spending even more? What else can we do to have the money we need to pay for unexpected expenses and future bills? How will we pay for next month’s expenses?
After making a list of what we spend our money on throughout the year and reviewing our spending habits, my husband and I then wrote a list of what we spend most of our money on every month. Again, our list probably looks very similar to your list. Here is what we have been spending most of our money on:
- Home projects
Minimizing bills: Yeah, I got time for that.
Bills. Most of our bills are necessary expenses. Some of our bills could be less expensive, but we like our gadgets and what our gadgets can do. And some of our bills are not necessary but convenient. It was an easy decision on our part to start freeing up some money by getting rid of the bills that are not necessary and minimizing other bills by changing some of our every day habits.
The first bill we got rid of was our Orkin bill. We had a problem with carpenter ants when we first moved into our house. Orkin took care of the problem for us and then some. In addition to getting rid of ants, Orkin also got rid of centipedes (which I absolutely despise!) and other unwanted creatures like spiders and mice. We can save money by finding less expensive ways to keep unwanted creatures out of our sight in our home. Orkin sprayed in and around our house for the last time in June. Now we will save nearly $100 every three months. This means we will save nearly $350 every year, even if we spend about $50 on products we purchase each year to get rid of said creatures. I will gladly hire Orkin again someday when it is an expense we can justify. Centipedes are the grossest and they make me want to barf every time I see one. I never want to have to see another centipede ever again!
This summer we are attempting to not use our air conditioner in order to keep our Xcel Energy bill lower. There were a couple of months last summer when our Xcel bill was nearly $200 simply because we had the AC on. There have been a few days that have made it almost unbearably hot in our house. But since I am not pregnant and since my kids have not complained one bit, we have survived so far without turning our AC on. I will let you know how much we are saving by not turning the air conditioner on this summer when I do get the next Xcel bill. We are using fans to cool off so our bill may be a bit higher still.
As I mentioned before, we are saving a big chunk of change by not having the kids in daycare right now. About 25 percent of my income was going toward daycare expenses. And we were lucky. Other families spend about 40-50 percent of one parent’s income on child care.
After eliminating our Orkin bill, reducing our energy bill and eliminating daycare expenses, my husband and I are feeling pretty good about the adjustments we have made in the bills category. There is still room for additional adjustments to be made, but we are hoping that the adjustments we have made so far will suffice.
Other bills we pay that are necessary include our water bill, trash bill, energy bill, mortgage, student loan payments, car loan payments, home and auto insurance, life and disability insurance, medical insurance and medical bills, and our phone bill. Life and disability insurance payments are a bit spendy, but having this coverage helps to ease our minds for the what ifs in life. And we only have one car payment now because I just paid off my car last month (woo hoo!).
Only having one car payment will help to free up some money for us. However, normally after we pay a car loan off, we start setting the money we would be spending on the car payment aside to go toward a future vehicle purchase. Instead of setting money aside for a future vehicle purchase, we will need to put this money toward other expenses for now. I am perfectly fine with this. Aside from snowstorms, I actually like driving my vehicle and it fits my needs for carting kiddos around town, running errands and going on road trips.
For some people, paying off a vehicle means they will have an extra $350 per month. Without my car payment, we now have an extra $168 per month. We like to keep our car payments low for a few reasons. First, our family needs two cars, so we like to keep our payments low so that we can afford owning two vehicles. Second, we don’t like taking losses, which means we don’t buy new or even newer cars because it makes me sick to know and see how quickly some vehicles depreciate in value. We certainly don’t drive the coolest and classiest vehicles, but our monthly car loan payments have always been under $200 per vehicle. Third, older and more basic vehicles typically cost less to insure. The downsides of owning older vehicles, though, include not having a warranty and having to spend more money on unexpected repairs.
That takes care of bills for now. I’ll move on to the other categories in my next post in this series. After reading about bills, you could probably use a little break. After all, it’s the freakin’ weekend, baby!