As we move into another year, I take a look back at how 2018 went and ways I can improve for the new one. Where did we spend too much? Where can we cut back? Do we really need this or that expense? And, can we do better overall?
While a main focus of mine has been to make more money through business enterprises (building assets), focusing on lower expenses is also another way to keep more money in our pocket.
Our expenses are often something we can all control – obviously to a certain extend. And when you've thought you've reached the end of cutting or looking for ways to save – there could be more ways you'd never thought of, but you may need to be vulnerable and ask a friend or family member. Sometimes it helps to get a trusted, outside perspective on your finances.
So, here's a few areas I'm looking at cutting back this year.
If you aren't already, I would highly recommend that you sign-up for Nextdoor.com. It's a place where many of your neighbors are hanging out and you can connect with them on various subjects from handyman recommendations, lost animal notices, to keeping abreast on local utility bills. Just the other day, one neighbor stated how he was charged over $700 for his bi-monthly water bill! Without any leaks in his home to be found, he enlisted the help of neighbors to see if they had tips on what could be amiss. While this is likely something he'll end up taking to the city's utility department – many neighbors chimed in about what they were paying for their water bills and how they've reduced 'em. Since higher than normal water bills are likely due to a hidden water leak, one gentleman recommended installing a gadget that notifies you of when there could be problems in your plumbing (which I had never heard of).
Utilities are one of those bills that often vary from person-to-person based on their usage – but it certainly can help to know what others may be paying if they have similar living arrangements as you/your family. If a family of 4 with similar sized home and same-age children are paying $100 less than your family of four in electricity, it could prove beneficial to find out what tactics they're employing to use less energy.
I've sometimes checked in with our single neighbor to see how my wife and I can challenge her water / electric bills. While we may never get to her expenses, it is good to have something to aim for.
This is something that I need to speak with the wife about (as she often has veto power) – but I want to eliminate some of our entertainment expenses that have crept up after we first cut our cable bill.
Right now, we have Hulu ($8/mo), Netflix ($8.60/mo), basic cable (about $25/mo). I've just really been surprised how easy it is to waste time on the streaming services. It's like they are engineered for you to binge mindlessly!
It will help to cut or eliminate some of these.
After suffering high cell phone bills, we discovered MVNO providers that offer good service at excellent prices. If you don't know what an MVNO (mobile virtual network operator) is, they basically “rent” space off the big networks for a set price and then pass on the savings to customers. You can really get some excellent deals with these services.
All three of us guys use an MVNO. Matthew has been with Ting for several years, Charlie – Republic Wireless and myself has used Tello for a couple of years (paying $11.35/mo for 200min, 300MB and unlimited text). We've all been happy with their service AND the pricing.
Next on my agenda is to get my wife on board with one of these offerings. She is with AT&T, paying 6x what I pay monthly.
For our landline, we moved to Ooma and pay $5.50/mo – but this is an expense I'm considering cutting due to lack of use.
Gosh, everything is going up in price these days – including food. My wife and I made a decision years ago to invest more in our health by eating higher quality / better-for-you foods. But it is not cheap. We're hoping this “investment” pays in health costs down the road (there's still room for improvement in eating better) – but I'd still like to cut our food bill another 25% this year by purchasing less – shall I say – carbohydrates.
Since we do a majority of our shopping at Whole Foods, we are paying a premium on groceries. Good thing is that with Amazon purchasing them this past year, there are ways to save including scanning the Whole Foods app (connecting it to your Prime account) at the check-out counter and using a Amazon Prime credit card (which can net you 5% back). Any sale items you purchase will get you another 10% off when using the app.
Last year we were able to keep our “eating out” expenses to around $50-60/mo. I'd like to cut that by 50%.
I'm a fan of Qdoba or Chipotle – so I typically request gift cards to these establishments when asked what I'd like for birthdays or Christmas. I also hunt for deals they run – but it seems they are offering these less and less these days.
Debt is expensive. After taking out a smaller home equity loan to buy our business last year, it really opened my eyes to how much I pay in interest yearly. We often don't think about it – but getting rid of those high-interest credit card bills (if you're not paying off monthly), car and school loans, and yes, even mortgages (like Charlie did in '18) will net you some serious expense savings.
We're hoping to pay a little extra on my wife's student loans and mortgage in 2019 to save us money down the road.
This is often one category we cannot control – we certainly try and do our best at taking care of ourselves by eating better, getting exercise and maintaining healthy social and spiritual connections.
We're fortunate to have good health coverage through my work that helps us save on healthcare. We also utilize an FSA account to take advantage of tax incentives.
But if you / your family are in good health, a health-sharing plan could be an option for you. Matthew and his wife have been using Medi-Share for over a year now with good success and savings.
Those are ways in which we're looking to cut expenses in the new year. How about you? Love to hear.