Cutting cost out of your budget can be mundane and many of us don’t succeed at it because we approach it randomly, without a plan.
Did you know that you can make cost cutting a fun challenge that you and your spouse can participate in together?
What if you and your spouse had a contest of cutting a certain percentage, let’s say 5%, out of your 5-10 spending categories? Few categories like your mortgage payment may not qualify, but a majority of what you spend money on will be a perfect candidate for this challenge.
So for example, if you spend $500 on groceries every month, 5% reduction would mean $25 dollars a month. You can get creative with meal planning and look for ways to eliminate junk food that costs you extra dollars every month but adds little to no nutritional value.
How about your car or homeowner’s insurance? Did you know that re-quoting those once or twice a year could save you serious money? We just did ours last year and saved over $700 a year! That’s $58 dollars a month worth of cost reduction.
If 5% is too much, start with 2% or 3%. The key is to set a specific percentage amount that you can eliminate in all of your identified categories.
Another option would be to set a dollar amount, let’s say $10 or $15 dollars, to be curbed out of each of the 10 spending categories. This alone will give you $100 – $150 extra dollars a month that you can immediately reassign towards debt reduction or towards building your emergency savings fund!
Finding cost reduction by a percentage or by a specific dollar amount can be a fun and non-threatening way to eliminate expenses, and at the end of it, whoever wins can be treated to something special!
Here is a list of categories to consider as you look at curbing cost:
– Car Insurance
– Homeowner’s Insurance
– Cell phone / data plan
– Cable / Satellite
– Haircuts / Beauty
Image by BC Gov Photos