Tuesday, June 5, 2012
Bare Bones Budget
Last year with all the layoff's hubby's company was doing I realized even though I felt like we lived well below our means it was time to do a reality check. I sat a goal of living on much less than we made, 40% to be exact. I am happy to report we pulled it off! The money we saved was shoved into our savings account a dollar at a time week after week. Had hubby suffered a job loss we would have had to cut back even more. Here is a list of things that were not necessary that we continued to do but it would have been cut out lickety split!!!
Cell Phone for me (Hubby's we would have kept since it has business contacts and would have been needed)
Gifts (Very simple would have been the name of the game)
Christmas (while we did cut back a bunch we would have cut WAY back)
Boat (Fully paid but still cost $$) Happy update, we ditched that money pit this year!!
Jeep (Fully paid but still cost $$)
Harley (Fully paid but still cost $$)
My car (Fully paid but still cost $$)
Charity (Instead of $$ donated I would have found ways to donate time)
As much as any of us hate to think about a possible job loss I think it is a VERY real possibility. The US economy has not rebounded as the "experts" expected, Europe is still in a pretty nasty mess, our elected officials still don't get it, (we can't continue to borrow more than we are bringing in), over 50% of Americans are on some sort of Government assistance. The list of doom and gloom could go on and on.
I would encourage all of you to do a "Bare Bones Budget" for at least 60 days. I think it would take at least 60 days to really get a handle on where your $$ are going. Here's a list of what I found we were throwing money away at that took time, phone calls and a stash of chocolate to get cleaned up.
Homeowners insurance - We were way overpaying in some area's and others we didn't have enough coverage on. Savings of 217.00 for the year
Internet/cable/phone - I couldn't get the company to give me the price they were plastering all over TV and the papers, it was for new customers only. OK, Bozo disconnect my services I will call back in a few days. Sure enough after a few days of no service I reconnected at the lower price. Savings of $71.00 a month, $852.00 a year. This year after the 1 year deal was over they jacked the price back up. I made the call again and told them to disconnect, instead they extended the deal for an additional year.
Exterminator service - The price was doubled from the year before, we were not having any problems with ants, spiders or bugs so I cancelled the service. Savings of $500.00 a year. Interesting, this spring we started having an ant problem again, hubby insisted I get the service back, the cost had gone down due to people cancelling the service, it's back to $250.00 a year.
Cell phone - Did a cell phone check up, I only use my cell phone for emergencies or convince when out and about, it stays in my car. I have a plan that was no longer even offered so the price was as low as it would go.
This is just and example of leaks in our spending that so many of us don't take the time to investigate. If you work full time take a day off to do a check up on your reoccurring spending, bank drafts and such, it really can pay off. Make sure and get yourself set up for a long frustrating day. Here are the tools I suggest having handy.
Notebook to write down names etc
Calculator to do quick math with. The reps are use to customer calls, they are trained to turn numbers and deals around so in the end you are not paying for what you want, be ready!! DO NOT be afraid to tell the rep you are talking to they you can not understand what they are saying, insist that you speak to someone of your own language!!!!!!!! No offence to anyone but Larry is not your name buddy who are you kidding
Beverage of choice
Bar of soap to wash your mouth out with, (I'm just saying)
Last but certainly not least if you are from the US go on line to the unemployment agency site for your state. There is a tool that you can use to estimate what your unemployment benefits would be each week, keep in mind you will have to pay state and federal taxes on that amount at the end of the year! Could you live on that amount? What changes can you make now to bring your reoccurring expenses down just in case. Don't even think about putting the money you have renegotiated back into you budget, set up and auto draft and shove it into savings each month, you now have a nice little EF that you will never notice. The average US citizen are just 2 paychecks away from losing their home. I think we can all look back at the past few years and know that is not an exaggeration!!!!