In becoming financially responsible, the 4 cornerstones need to be addressed. In week three of the series, we will be working on cutting costs. Once you know where your money is going, you need to work on trimming excess spending.
I don’t know about you, but there are always places that we can cut. We spend a lot of money on silly things. And our savings has suffered because of it. We are lucky in the fact that we do have savings, and that we can live well on my husband’s income, but our spending has become a burden because we are spending money on silly things.
In order to cut costs, you need to have a plan of what needs to be cut, why you spend so much, then an action plan to cut your budget (and stick to the reduced spending goal). We spend way too much eating out and on groceries. I wonder why we are trying to lose weight when we spend a significant portion of our flexible spending on food. We also spend a whole lot of money at Target. I should really consider buying stock in Target with the amount of time and money I spend there every week.
After identifying 3 major areas that I need to save money, I then started to look at what we were spending the money on.
With groceries, I needed to cut our spending in half. My husband and I are on a diet where all of our meals are prepared for us and we pick them up twice a week. We were spending money on the diet (not cheap, by the way) and then going to the grocery store and spending sometimes $200 a week. Granted, our kids need food, so the grocery store is a necessity, but I was buying a lot of extra stuff that we didn’t need and at the same time we were not sticking to our diet. So the grocery budget was slashed and we were re-committed to only eating on our diet plan.
Secondly – eating out. It was insane to see how much money we were spending eating out. On top of spending money on groceries and paying for a meal plan that we were not following. Talk about wasting money. A lot of food was dying in our fridge. Eating out was a way of entertaining the kids and getting us out of the house on the weekends. But it isn’t healthy, and frankly, we live in a major metropolitan area, a mile and a half from the beach. I think we need to find a new hobby.
Third, Target. The rabbit hole of all things amazing, fun, and absolutely needed. I sometimes bought groceries at Target, other times just random outfits, and the kids love the toy aisle. I was amazed if I left there under $200. Now yes, I did need to buy diapers and formula, but I don’t always need the extra shirts or dresses when I frankly need to lose weight. See items 1 and 2. I will by clothes when the kids need them, but they are a separate line item on our budget.
Now that I identified where we need to cut, I started micro-managing our spending. I have a spreadsheet (similar to my budget tracking worksheet) that tracks by week (Saturday to Friday) what we are spending on each budget category. I have it set up so that I know what we should be spending per week (taking into account my reduced grocery, eating out and Target budget) and it tells me if I am over spending each week (and over a four week period). That way, I can immediately change my course of action on spending and start planning for the items that pop up during the month.
By using my spreadsheet for the last four weeks, I was able to hit my savings goal for the month and really cut down on what I was spending at the grocery store, eating out and Target. It has been an obsession to underspend in every category.
If you would like to learn more about my spreadsheet and find out how you can get one of your own, click here.
If you need help figuring out how to cut costs, I have some great posts from my fellow bloggers that would love to share their knowledge with you! If you stop by their websites, please leave a note that you found them at the Halfway Homemaker!
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Next week, we will be discussing savings!
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