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Cutting $500 from Our Monthly Budget

Our online business has slowed down this summer.  This is normal, but this year is a little worse than others.  Don’t panic on our behalf though, LOL.  We’re still doing fine overall and I’ll be writing for you from home for quite a while.  😉

Any complaints I have are definitely first-world problems, BUT even financially sound people aren’t comfortable with financial change.  Here are some suggestions of budget categories that can be targeted for savings.

Budget Cuts

Budget Cuts

I’m going to make this personal.  Here is our budget.  The red categories are the ones that my husband and I have/will be cutting in some way.  The blue categories are the ones that we aren’t touching but are ripe for rollbacks if we truly need to cut back or if you need some ideas.

Here is how our budget looks right now:

  • Income Taxes – $2500
  • Home Mortgage – $990
  • Home Insurance/Property Taxes/HOA – $750
  • Rent House Home Insurance/Property Taxes – $275
  • Health Insurance – $275
  • Car Insurance – $85
  • Gasoline – $200
  • Life Insurance – $30
  • Electricity – $150
  • Water – $50
  • Natural Gas – $40
  • Restaurants – $400 $250
  • Groceries – $300 $250
  • Cell Phones – $150
  • Medicines – $20
  • Cable/Internet (DSL) – $120  $60
  • Housekeeping – $175 (average over the year)
  • Lawn – $50 (average over the year)
  • Miscellaneous – $200
  • Entertainment – $200  $50
  • Cash – $200 $100
  • Total Expenses = $7160 $6650

Our Red Category Cuts

  • Food is always a great category to target since you can usually find cheaper options.  We’re back to keeping up with our spending by tracking every cent used for food on a list on our refrigerator.  There is nothing as motivating as seeing your spending staring at you in the face.  We’re cutting back our food total to $500 once again and then will move down to $450.
  • With our upcoming vacations using up the rest of our vacation account, we’re cutting back on our monthly entertainment spending A BUNCH.  Now it’s at $50.
  • We use cash for random things through the month, so now we are only putting $50 in each of our wallets instead of $100.  That’ll keep us from splurging.
  • Yep, we’re cutting cable.  We have another 2 months of a contract and then we’re moving on to just online and Netflix streaming (part of our miscellaneous category).  I don’t know how much the internet will be by itself, but I am estimating it high just in case.
  • I also price out our electricity contracts every time they are up for renewal using a site for Texas –  I’ve been able to keep our cents per kilowatt hour between 8.9-10.9 cents over the last 3-4 years.
  • Our cell phones are $150 a month and we want to try Ting next since they’ll let us bring in our Galaxy S3’s and should save us $50 a month.  But our contract isn’t close to being up yet and they only cover $150 of the break-up fees.  So it’ll be a while.

Blue Category Suggestions

  • Our home mortgage and property taxes are a choice.  The market it okay for selling right now.  We could move back into our paid off rental home.  We could buy a cheaper home.  We could find a home in an area with lower property taxes.  But we are happy with our current housing situation.  Our rental home’s tenant is great and always pays on time.  We share our home with our two friends.  Overall, we are happy and definitely are not feeling a pinch hard enough to justify moving right now.  But believe me, if we needed it, we would move and get more roommates at the same time.  We’ve been there before and could do it again.
  • Our health insurance is pretty much as cheap as I could find it without risking us being uncovered for the big stuff.  But if your health insurance is costing you way more than you think it should, I would highly suggest looking at quotes at or to see if you have cheaper options.
  • I also think that $85 a month is the best we can do for full coverage on a 2007 Toyota Prius and a new 2013 Honda Fit.  We are insured through a GEICO local office, but I call around every 6 months just to ensure that we are keeping this premium as low as possible.
  • Obviously, housekeeping and lawn care are luxury expenses.  We value both services more than most of our extras, so they’ll stay until we really need money.

Technically, our income taxes will be lower too since our income has dropped to about $7500 from about $10,000.  But as I wrote before, we use the easy method for quarterly estimated taxes, so we’re still paying into the pool based on what we made last year.  We’ll be getting a significant refund again, but it’ll make the 2015 Roth IRA’s way easier to fund.  🙂

Have you made any budget cuts recently?  What categories would you target?

FYI:  I worked at a dead end cubicle job from 2005-2011 for about $30,000 per year.  I went self-employed in July 2011 and make between $70,000-$90,000 through blogging, professional pet sitting, hubby's reffing, and our rental home.  If you’d like to start your own site (link to my free step-by-step guide), I highly suggest checking out Bluehost (my referral link with a nice discount for you, PLUS a free custom header banner from me!).  Please contact me any time at budgetingfunstuff*at*gmail*dot*com with questions or just to brainstorm! I’d love to help!
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13 thoughts on “Cutting $500 from Our Monthly Budget

  1. I have to look over our budget and previous spending to cut $500 from our monthly budget too.
    Your car insurance is cheap. We pay twice as much for Mitsibushi Lancer 2008 and Honda Civic 2007. $170 a month for full coverage. I hope once my hubby turns 25, our insurance premium goes down for next year.

  2. I think restaurants are the best place to cut back, but also the hardest — at least for me! I love going out to eat. I think you made some wise choices on where you plan to cut back. Hopefully your income will get back to “normal” and you will not have to adjust that much. I know change is hard.

  3. Just a reminder of how Michigan has the most ridiculous prices and policy for car insurance. I pay around $200 a month for our two cars and that’s after consistently badgering our agent and working some different schemes across multiple policies.

  4. I’m very proud of you for cutting back. Most people would not cut back at this point. You will have on to your money over your lifetime as you are willing to pay attention to income / expenses and make voluntary changes.
    ~ Christie

  5. We cut back on a few items last year. My biggest win this year has been the cell phones. We are now saving $155/month by switching to prepaid. Our monthly will is now $60 for two phones so that is definitely something to look into.

  6. We’ve cut back on “fun money” as well as restaurants and wine for this month (and probably into the foreseeable future until see what’s up with my position). We just paid off the student loans, so we can reduce our debt repayment from what it has been – although that’s one I’d like to keep as high as possible until our e-fund is fully funded and our car is paid off! Hopefully more work comes your way soon!

  7. @Savvy, ah yes, men turning 25 does help. And call your Geico local office just in case. 🙂

    @Melanie, thank you. It’s a little hard, but it’s also good. I hope we’ll stay in this lower range even if our income increases so we can save even faster.

    @Money Beagle, that’s sad but honestly, $125-$150 would be the norm for us too. I honestly don’t know how this Geico agent did this…

    @Newlyweds, congrats and yay for more savings too!

    @Nicola, good luck!

    @Christie, you are always a smile to see a comment from. Thank you for being so sweet.

    @Practical Cents, wow, cool!

    @Mom of 3, my wine consumption actually went up this month, but I cut out fast food to do it. I also found an excellent brand of Red Moscato, Moiselle, at Aldi’s for $5 a bottle. 🙂

    @Mrs. Money, me too. 😉

  8. We recently moved to Mexico and our cost of living has dropped significantly. We rent fully furnished houses with internet and cable included for an average of $750 per month, in New Zealand our mortgage repayment alone was $1200. That house is currently rented to a tenant, so we have also increased our income due to the move here. The biggest day to day expense I have seen drop is the cost of cell phones, here in Mexico 100 pesos (around $9NZD) lasts over a month. In NZ the most basic prepay cell phone plan was $20 per month. And as there is free wifi everywhere we don’t need data plans.
    We chose to move here to focus on building an online business so lower living costs were important and so far, so good. All the best with your budget cuts.

  9. I’ve always found the summer months to be some of the easiest months to budget in for a number of reasons.

    Firstly my food budget goes down significantly because of all the fruit and vegetables popping up. For example I seem to have a never-ending supply of salad from now till September time or even later.

    The DVD rental services I use don’t get a look in over summer as we’re more often out in the countryside enjoying the weather or seeing family.

    Additionally I’m tempted to spend far less on standard “shopping”. Poor old Amazon gets far less dollars from me than the rest of the year 😉

    Lastly of course we’re using no heating and far less electricity for lighting, drying clothes etc.

    Summer has always been my favorite season anyway, but since I started to become more frugal it’s even *more* enjoyable watching all those expenses dwindle to nothing for a few months 🙂

  10. I think you have the right idea.
    I am also trying to cut back on food expenses. It is difficult, though. Food costs are on the rise as well. If you can manage the dining out portion, that is the hardest part. Best of luck. Now I’m motivated to chop $500 from my budget!

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