Archive for June 1st, 2009

We were bleeding money and it had become critical to control the bleeding.  My husband was just about to start a job that paid twenty five percent less than we were making and even in his current job we were treading water, trying to stay afloat.  As we started planning for the future, I was panicked.  I had visions of losing our house and having to move in with our parents. Unfortunately, we had just finished watching Cinderella Man and my panic was fueled by scenes of the Great Depression.  If we were going to survive the next three or four years with his new job, we had to take control of our money.

We started by analyzing our spending.  What were the big expenses we could cut out or greatly reduce?  Were there smaller expenses we could get rid of that would add up to big savings?  The good news, we discovered after going over our accounts, is there were both.

The Big Expenditures –

The first thing we were able to do was give ourselves a big pat on the back.  Several years ago we had decided to automate our savings.  We had also automatically increased the amount every year.  The idea was it became money we never counted on because we never saw it.  To cut this monthly expenditure from our budget was hard but necessary, at least for the time being.

The next biggest expense was food – groceries and eating out.  I was embarrassed when I saw these numbers on paper.  Dining out was an easy cut for us but it meant making a conscious decision.  We decided we could go out to eat once a month so now we have to choose wisely. There is no more, “I don’t feel like cooking tonight so let’s go out.”  We look at our schedules and see if there is a day we are going to be too busy with soccer schedules or other family events to get back to the house and that is the day.  Even then we eat at a lower end restaurant instead of the nicer ones we had allowed ourselves several times a month before the job change.

Cutting the grocery bill was a little harder but also a lot of fun.  It became a game to see how much we could save.  The first thing I did was start planning ahead so I could stop going to the store everyday.  I plan ahead for the entire week and then make my list from there.  I also clip coupons and look through the weekly circulars for the best deals.  I have found that some stores are now putting in store coupons for as much as thirty dollars.  My husband and I will split the list on those days and shop separately so we can save sixty dollars.  The savings are tangible.  Even my children get in on the action and get excited to see the numbers at the bottom of the receipt showing how much we saved each trip.

We were also lucky enough to refinance our mortgage and reduce our mortgage payment by quite a lot.  Other than that the big expenses were set in stone.  So we had to turn to the smaller expenses and hope they would add up to big savings.

The Small Expenditures –

The first thing we gave up was services.  This was hard, not because we were not willing to do the work, but because it meant taking money out of our service providers’ pockets.  I still feel guilty for that, but I know we were left with no other choice.  We cancelled our cleaning service which had been every two weeks, a dog walker a couple of times a month and the yard guy but in combination it saved us more than the refinance had.

For almost two months I became known as the “Conservation Nazi” in our house.  I controlled the thermostat and the lights in the house to a point my family was ready to revolt.  Then, without their even realizing it, they were shutting doors and turning off lights and grabbing an extra sweater instead of complaining about the cold.  We cut our energy bill by more than a hundred dollars.

I continued on the small expenditures, cutting a hundred dollars here and fifty there.  I bundled our phone, cable and internet.  I called the cell phone company and asked for a reduction of my fees to match current market value.  I told the kids we were going to cancel camps for the summer, stop personal coaching sessions and vacation close to home.

This is when we became even more aware of the small bleeders. We started noticing how much of our spending was mindless spending.  “Mom, I need new cleats.” And they would get new cleats before I really analyzed whether they needed them or wanted them. “Mom, can I have that new video game?” Sure, I would go out and get it the next time I was at the mall.  It was only fifty dollars, right?  Suddenly we all began to realize the true value of fifty dollars.  Even the kids realized the value and stopped asking for things unless they really needed them.

Today we are making twenty five percent less than we were six months ago and I am starting to put money in savings again each month because we cut the things that were not important to us.  Every time I find a new way to save money or look at the savings at the bottom of the cash register receipt I get a little thrill.  I realize we are doing something we should have done long ago — we are stopping the bleeding.

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