When looking at your tracker, there are two big numbers to look at – money coming in and money going out. There is a total figure that shows whether you are losing money every month or if you are left with a surplus. This is important for big picture, but actually understanding what the number means is key. Either you make enough to cover your expenses or you don’t. There are two ways to fix that number, bring in more money or spend less.
There are always opportunities to bring in more money. We can explore this later. But if you are spending more than you make, it is time to evaluate where you are “bleeding money.” Sometimes it is as simple as re-evaluating your food and entertainment expenses, or needing to evaluate your fixed expenses that don’t change from month to month. Other times, you need to evaluate your housing or transportation expenditures. Whatever it is, first, try to figure out how much you need to save to better your budget.
In the last year, I have made a valiant effort to evaluate our expenses and maximize our savings on fixed expenses (cable, utilities, subscriptions, housing, etc.) and see what steps I could take to alleviate the burden of our lifestyle on the bottom line. My husband puts an obscene amount of money into his retirement, since he is employed full time and gets matching from his company. As he is 8 years older, it is also important that he has his retirement firmly in place. I have been slacking a bit on retirement because I am self-employed, so part of my interest in saving money is to start building back up my retirement.
In order to evaluate our expenses, I started sitting down with the bills that were coming in (from healthcare professionals after my son’s hospitalization when he was a month old, to utilities, to subscriptions I had signed up for, magazines, and all of the insane masses of paper that hit our mailbox every day. I started reading the explanation of benefits from my health insurance and calling them with questions. I looked at our cable bill and even sat down with a competing insurance company to see what better deals I could be getting.
It was a long process, and it didn’t happen overnight. But it started to become a high when I realized how much I could save on various monthly expenses, that I was paying too much for certain items, and that I could really do without a lot of fluff.
In the coming weeks, I will be detailing my experiences cutting expenses and finding ways to add to our bottom line.
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