Cutting expenses 15%

[Geigerin]

My DH is the sole provider for our family and will be taking a 15% pay cut in January. We can afford it because he'll still be earning plenty to cover necessities like food/mortgage/clothing.

However, we will need to cut back. So far, we are cancelling our gym membership and scaling back on our cell phone plan. That amounts to about $100. We both eat lunch out a lot (often together), so we're going to scale back to once a week. Cancelling or scaling back cable is out of the question for my hubby.

I make my own detergent, soap, etc. I cook homemade meals most nights. For those more experienced with cutting back, what areas made the biggest impact? Anything creative that you wouldn't typically consider?

Thanks for your input!

Amie

[Usually Curious]

We save a lot of money by using cloth dipes, wipes, family cloth, diva cup, kitchen rags, napkins, dishes, glasses and flatware. We rarely buy anything disposable anymore and have seen a huge drop in our grocery/household budget. That 'misc.' category took up way more $ than I thought. 

Also, you'll find you save a lot by not eating out!

The changes I've made to electricity usage and such have not been nearly as dramatic as going to non-disposables.

[zebra15]

debt payment... if you have debt that is huge.

also cut back on driving, stop the lunches and start packing

does his lower income change your tax bracket?

WHat is going to make the biggest impact is write out your budget and see where your money goes.. also track your spending for 30-60-90 days and write down EVERY PENNY and see where your money goes.  Then you honestly know what you spend on and can see what to cut.

[Geigerin]

These are all great ideas! We already use cloth everything but tp. My period hasn't returned (yay!), but I'm going with the diva cup when it does. As a tree-hugger, I'm ashamed to admit that I used big brand tampons *and* pads my whole adult life. :/

I like the 30-60-90 day thing, too. We usually just have a free spending budget, and when we reach the limit, we don't spend any more that month. I know, totally ridiculous...we had several years of two incomes and no kids.

Despite how irresponsible we sound, we have no debt aside from our mortgage, and we paid that down a lot before punkin was born. As far as the tax bracket thing, I think so but need to check. We were putting 15% into 401k before, and the new job has no 401k. We'll still be maxing out the IRA, but I have to see what the difference is in taxable income. We're right on the cusp, I think. That's why I'm not certain.

[heatherdeg]

Agreeing that the eating out will be a huge chunk.

But grocery spending is a HUGE one even without the disposables.  Especially if you eat meat.  We have a hard and fast rule that we don't buy meat for over $1.99/lb (actually, that was the rule for the last 15-ish years and I think I have to bump it up to $2.49/lb).  But when you're looking at the same exact meat regularly being $3.99/lb or more and having meat at every meal... that is a HUGE portion of your grocery bill alone.  Just meat.  Sorry, but I'm a carnivore. :)  If you can add one meatless meal to your dinners each week, even that would cut it down.  Pasta (try it with pesto for a change) or some red lentil chili (the only meatless chili I can tolerate as a die-hard meat eater)... there's stuff out there you can do.  Even a fritatta for dinner (an egg dish with lots of veggies in it).

If you've been using your debit card for groceries, pull out the last 3 months of bank statements, add up everything obviously grocery-store-related, get an average monthly amount, and stick that amount in cash in an envelope.  When the cash runs out, turn to your cabinets/pantry.  :)  From there, you can work on cutting down that amount.

Oh, and price books are a HUGE help.  You think you know your prices until you keep a price book.  :)

[lach]

I'm not really into the whole shebang (I don't mind having a bit of debt), but I used a Dave Ramsey budgeting worksheet from one of hid books and I found it a really helpful way to see where my money goes.  I particularly liked that he actually gave suggestions as to the portion of your income that should go towards each category... for example, about 10% of your income to utilities, 25% to housing, 10% to groceries  (I'm making those numbers up... I did it a few years ago and I forget now!).  It really helped offer me a guide of where I should be able to cut certain expenses.  Not surprisingly, we were spending too much on food, but I also remember being surprised at the % of our income that was going towards utilities.  I started getting MUCH more careful about turning down the heat and turning off lights.  But in general, working hard to shave off just a few percentage points from each of the categories added up, and it was a really good wakeup call about how to better budget.

[heatherdeg]

Have to agree that I'm not a die-hard Dave Ramsey fan, BUT, I do think that when you are JUST beginning and need a direction and a foundation--his information is excellent and time-tested.  You can probably get his Financial Peace Planner workbook to help guide you from most book stores.

[Amys1st]

I would audit all your utilities. Call each company see what type of plan you could do. Check out internet, cable, cell etc. Even check into switching.

Invest in a thermostat that is programable. Program it for lower heat during certain times of day.

Go thru your house and do an electical audit. Or have one done. Go in each and every room and figure out what is plugged in, what dosent need to be plugged in? you will be amazed how you can trim 10% off your bills this way.

[Nitenites]

Learn how to coupon. Seriously. I took our grocery bill from $600/month to $450/month by using coupons. I don't pay for a lot of things now that I know how to coupon. (Shampoo, hair products, razors, toothbrushes, floss, dish detergent, etc.) You'd be surprised how much $$  those items take up in your grocery bill. I find good deals on groceries and stock up - right now, we've got a few turkeys in the deep freeze. Start keeping a price book, and know your prices. I know here in Indy, I won't pay more than $2.49/lb of meat. (hey! you're in Indy, too!) My target price for chicken (bone-in) is 98 cents/lb, and boneless/skinless is $1.79/lb. Bump your thermostat down. (Try a degree every couple days.) 

[Callimom]

Comparison shop and then call and ask for discounts from places like your phone/cable/internet suppliers, your house and car insurance. I saved 10% off most of those just by asking and/or combining services.

Hang laundry to dry - the dryer is a huge energy suck.  For the winter, I have a rack and can hang a load using the rack and hanging a few shirts on hangers to dry. We only use the dryer to fluff towels now.

Watch for phantom loads on your electricity bill - unplug or turn off at the power cord things like tv/dvd players, stereos, chargers, microwaves etc.  Our hydro company said that  10% of a typical home's power goes to phantom loads. Also think about doubling up when using the oven and then choose smaller appliances for some jobs.

Don't waste food. I read a scary number the other day that 30 percent of food purchased in North America is thrown away (spoilage, made too much etc.)  I agree with going meatless for a meal once or more each week and another meal where meat is the "side" and not the main dish. I also plan a couple of cheap dinner nights - soups, pastas, salads, each week. I try to keep our dinner costs under $1 a person one night a week (we're a family of 6 and I preserve a fair amount so it isn't so hard).

Shift some of your luxuries to make at home ones. Learn to make your favourite coffee drinks, bakery treats, take out, wine etc at home so you can treat yourself and still save money. 

Little things like use the library for books, movies, music etc., borrow some things instead of buying them, don't overbuy on baby things, choose to drive less and plan your errands, make gifts etc.

I'd also start living on the new salary now to get used to it while you have a bit of a cushion for the adjustment period.

good luck!

Karen

[EmsMom]

Call all of your insurance companies and see if you can't get a better deal (maybe even switch companies).  Sometimes raising the deductible can bump just a bit off of the total.  You also might consider shaving 15% off of each category.  You might find it easier to use 15% less electricity, eat 15% less food, etc.  rather than looking at the whole budget.  Of course, you can do both. 

[SilverFish]

what's your grocery budget like? do you tend to spend money throughout the week on things like coffee, muffins, drinks or candy? do you go shopping and buy yourselves clothes or toiletries on a whim?

those three areas are our biggest money leakers, honestly. i am getting better at sticking strictly to our grocery budget, but it took me about 5 months of really trying to get to the point where i feel comfortable and not pinched by the end of the month. leaking money during the week to the non-necessary items like i mentioned above can easily add up to a few hundred dollars! tracking your spending for the next 30 days like someone else mentioned should be a priority, because it'll really help you see where you can trim the budget the most easily.

[happysmileylady]

Originally Posted by Nitenites 

Learn how to coupon. Seriously. I took our grocery bill from $600/month to $450/month by using coupons. I don't pay for a lot of things now that I know how to coupon. (Shampoo, hair products, razors, toothbrushes, floss, dish detergent, etc.) You'd be surprised how much $$  those items take up in your grocery bill. I find good deals on groceries and stock up - right now, we've got a few turkeys in the deep freeze. Start keeping a price book, and know your prices. I know here in Indy, I won't pay more than $2.49/lb of meat. (hey! you're in Indy, too!) My target price for chicken (bone-in) is 98 cents/lb, and boneless/skinless is $1.79/lb. Bump your thermostat down. (Try a degree every couple days.) 

Bah!  Here in Indy, you can do lots better than $2.49 a lb for meat.  :-)  Chicken 98c a lb is the regular every day price at Costco, and Meijer has run great sales this summer on the bonelss skinless chicken breasts that work out to $1.68 a lb.  Turkeys-Kroger is running them at 57c a lb right now.  I have 5 in my freezer.  I would LOVE to get 2 more because at $5ish for a 10# turkey, that's a great deal.  But, I don't think I have any room.  My big chest freezer is too full already.  I like to have 1 turkey for every other month, we cook it up and then freeze the leftovers in meal size portions and I usually have enough to do one turkey meal each week for the next 2 months.  I use them in place of chicken in things like enchiladas, pot pies etc. 

[Nitenites]

Depends on what side of town you live on. No Costco down here! $2.49 is my ceiling, not my goal. (Gosh, I need smilies!) Yeah, I've got turkeys. ; ) I use them the same way. (And I make turkey broth/stock in place of chicken broth/stock. It tastes richer.) Yeah, chicken was that cheap this summer, but I've found meat prices (except for T'giving turkey and New Year's ham) rise in the winter. Know of any good TP deals right now? We need to replenish the stockpile. 

[sunnysandiegan]

My DH had a pay reduction in January 2009. We received less than a month's notice. I called every company we pay and asked for assistance on lowering our bill. Some folks gave discounts off the top (new pricing for same service); most talked with me about changing services. By the time I was done, I had lowered our monthly outflow by more than DH's income was being reduced. Plus, our tax situation changed in our favor. We increased our savings with the difference.

You can do it! :thumb

We did start with a detailed spending plan (budget), which made it easy for me to just get busy making phone calls. I highly recommend re-creating your past spending habits as much as you can and also tracking the next few months of spending to get a better handle on your finances.

[Geigerin]

Wow!!! You all are awesome savers!

We have a drying rack. We absolutely can hang clothes. I'll admit that I'm lazy. :/ We cloth diaper, so we probably would save plenty by skipping the dryer.

Our computer and tv are always plugged in. I can't convince my dh to unplug the tv (because of the dvr), but he wouldn't notice if I unplugged the computer.

Thanks for the Indy-specific recs! We have a Costco membership, and we actually are wondering if it really helps us. We tend to see great deals and buy things that weren't on the list. On the upside, gas is consistently the cheapest there, and we get a ton of points on the costco AmEx.

There were other really good ideas here, but I'm sleepy. Lol

We're going to start right away with savings, so I'll check in and let you know how it's going.

Thanks again!

[mattemma04]

I have been using cash only for my weekly expenses. I find I spend a lot more when I could just use a credit card.In fact a study showed people who use a credit card for food spends a lot more on junk foods. I shop at a few places and buy(and stock up) on the sale items. Like when chicken was 89 cents a pound I got 5 packs for the freezer.

I do my best to get the ulities down-water,gas,and electric. I buy gas cards through the kids school instead of using my credit card.Gives me volunteer points(school stuff),but for others it might give you fuel discounts. Change all lights and house filter. Not eating out or doing a cheaper packed food.Some bento meals people make look better than restaurant meals!

[happysmileylady]

Originally Posted by Nitenites 

Depends on what side of town you live on. No Costco down here! $2.49 is my ceiling, not my goal. (Gosh, I need smilies!) Yeah, I've got turkeys. ; ) I use them the same way. (And I make turkey broth/stock in place of chicken broth/stock. It tastes richer.) Yeah, chicken was that cheap this summer, but I've found meat prices (except for T'giving turkey and New Year's ham) rise in the winter. Know of any good TP deals right now? We need to replenish the stockpile. 

Well, I am on the westside, I go to the Costco on Michigan rd.  I only go once a month, or less, and stock up so that the extra gas is worthwhile.  I am totally going to give turkey broth a go this year with the ones I have. 

TP I am am stocked on, so I haven't been looking.  Sorry!

Originally Posted by Geigerin 

Wow!!! You all are awesome savers!

We have a drying rack. We absolutely can hang clothes. I'll admit that I'm lazy. :/ We cloth diaper, so we probably would save plenty by skipping the dryer.

Our computer and tv are always plugged in. I can't convince my dh to unplug the tv (because of the dvr), but he wouldn't notice if I unplugged the computer.

Thanks for the Indy-specific recs! We have a Costco membership, and we actually are wondering if it really helps us. We tend to see great deals and buy things that weren't on the list. On the upside, gas is consistently the cheapest there, and we get a ton of points on the costco AmEx.

There were other really good ideas here, but I'm sleepy. Lol

We're going to start right away with savings, so I'll check in and let you know how it's going.

Thanks again!

The thing with Costco is to go with a specific list and budget in mind.  I try to keep an inventory of what we have and only go for what we need. I find that when couponing, most of the pantry stuff, like canned goods and so on, I can get cheaper in a regular store using coupons and sales.  But I usually get most of my meat at Costco.  Chicken thighs and drumsticks, ground turkey (when they have it) rib eye roasts that I cut into steaks (cheaper that way) pork roasts, pork chops and pork ribs.  I am about 50/50 on it being cheaper there vs with a sale, but I really like the quality of the meat over a regular grocery store.  I might get the same quality or better if I go to a butcher or farmer, but I don't think it would be cheaper that way.

Another Costco tip...split the membership with family and friends.  Costco lets you bring one guest with you when you go.  So, find a buddy, they can pay half, one of you gets the membership and then just go with your buddy each time.  This works out even better if you are close and can get multiple people.  That way, you can buy the next level up and get money back.  The 2nd level membership gives you 2% back on everything you buy using the costco card.  Last year, because my mom and sister and MIL all go with me at various points to stock their own freezer, I got enough back to pay for the membership.  This year I won't have quite that much because my sister moved away.  But still a good way to work the system.

[diana_of_the_dunes]

Since you have a Costco membership, you may already be doing this on some things...  But buy in bulk!  I refuse to buy grocery store meats (even though the $1.79/lb chicken breasts is SOO cheap), but we do buy ours in bulk from a local butcher.  We've gotten great deals this way.  It's still more expensive than the deals at Meijer, but it's much less than what I'd be paying if I shopped for meat every week.  The downside is that it's all frozen, so I really have to plan ahead on meals so I can have it defrosted in time.  I haven't noticed any real difference in taste compared to fresh, though.

A food co-op might be another way to buy in bulk.  There are a few near us up in South Bend, so I'm guessing you could find one in Indy.  Stock up on staples, such as rice, beans, flour, etc.

Buy a big freezer.  I got mine on Craigslist for $50, and I have a few month's worth of meat in it, plus veggies that I froze myself.  You can get great deals by buying large quantities of local produce in-season, and home frozen veggies taste much better than store-bought.  I also freeze leftovers.  I try to make large portions to keep me out of restaurants, and sometimes I just don't feel like eating chicken soup (or whatever) with every meal for a week.  I pack leftovers in small portions and toss them in the freezer.  I haven't noticed that my electric bill has gone up since buying the freezer either, even though it's an older model from maybe the early 90s.  I do keep it full, though.

[texmati]

We are thinking of taking a large (50%) paycut this coming year, and I've been trying to look for big expenses in our budget. We were able to refinance our home (lower interest rate-- we did not add to our principal) , we are looking at making energy efficiency upgrades, shop around for insurance home car and health insurance, and will be looking into arguing our property taxes this year. Also eating out, of course, which is our big vice.

I'm trying to find where we can make cuts without effecting our day to day life. I know I won't miss the extra hours it takes to shop and reduce interest rates, but getting rid of cable will make me feel poor every day.