Last week, I was creating my 2014 budget with Cait’s budget spreadsheet (thanks Cait!) and checking my credit card statements for more accurate predictions of my future expenses, based on what happened in the past year.
This is part two of my financial planning for 2014. The first part was finding ways to earn more income passively.
I did a budget for every month of the year, totalling it all up in the end.
HOLY F-CK, guys.
2014 is going to be an expensive year.
I’m getting married. I’m going on an expensive honeymoon. That’s it, but that’s enough. That’s all my wallet can handle.
After I came to the sobering realization that I would have to either put all of my savings on hold for the entire year, or do something about cutting expenses, I decided for the latter and got to work.
Line Them Up
Since this realization came out of the exercise of doing a budget in the first place, I had all of my expenses lying in front of me, glaring a me, and begging for me to pick them off.
If you’re playing along at home, do the most detailed budget you’ve ever done. Every single penny that goes out of your bank account must be accounted for. Don’t lump your vitamins or cleaning products in with your groceries; actually list these things separately.
(Why? Well, you can’t stop eating, but you can cut back on the extras you buy from the grocery store. You can cut back on portions of your bills, if you can’t cut back on the whole bill, so be very detailed).
Pick Em Off
Legend
Greyed out cells: There are some bills you can’t reduce. Your mortgage, any debt repayment you may have (in fact, you should be boosting those payments), different types of insurance. I greyed those expenses out on my budget spreadsheet.
Orange cells: I could most certainly reduce these expenses, but these are more discretionary and where I’d rather see my money go. I would cut back on these as a last resort.
Bold cells: These are the expenses I was focusing on cutting.
Regular text cells: The cells with regular text and a white background are cells that I do plan on scaling back a bit on, but I wouldn’t be able to total my savings on them easily because of the way my finances are set up with my fiances. I left them out.
(I don’t have cleaning products or firewood on my budget because my fiance pays for those things, and I pay for the pet food/nail clipping, etc).
Instant Gratification
Right away, I was able to save $75 (instant gratification) on:
- Phone bill
- Internet bill
- Banking Fees
Phone Bill
I have some extras on my phone that I probably don’t need, and are costing me $30/month extra. I phoned and got rid of those extras, saving me $30/month right off the bat.
Internet Bill
My brother, who lives in our suite, insists on having the highest speed internet. This is fine with me, because that way we can both be on the internet efficiently, but I don’t like the cost. I phoned Telus (my internet provider) and they transferred me to the client retention department.
Since I have been a customer for 4 years, and I wanted cheaper internet, they cut my bill down to $20/month for the next 6 months and $50 thereafter. That saved another $50 off of our bill. Once the six months expires, we’ll transfer it to J’s name, so he can get the new customer discount.
Banking Fees
I know my fees are only $4.95, but banking fees are such a huge waste of money.
I’ve had a checking account with ING Direct for years, since I started this blog, and it’s free. I cancelled my account with TD so I wouldn’t be dinged so much by their insane fees, and it saved me (almost) $5.
(Sign up for ING with my Orange Key – 35611511S1 – and get $25 for yourself).
Instant gratification saved me $84.95!
Slower Process
Because not everything can provide instant gratification, I’ve decided to cut down in a few other ways, too.
Natural Gas and Electricity
This one isn’t hard – we’ve been pretty bad lately about turning off the lights, and relying on gas heat instead of our fireplace when we’re too lazy to light a fire.
I can’t let that continue, because I just don’t feel comfortable seeing our dollars go down the drain. We experimented over the past month to see how a change in behaviour might reduce our bill and saved just over $60 between both bills.
Health Care and Alcohol
I have amazing benefits with work and as a result, I don’t have to pay very much toward health care. The health care item on my budget is for a supplement which I’m not eliminating, but I am reducing it. I am getting the nutrients it provides in my diet at least partially, so I am cutting back the amount that I use by an amount that works out to cost me about $15/month.
I am having a drink free January and am trying to stay sober throughout the first quarter of the year (at least on my own dime). Alcohol is severely dehydrating and my skin and body just can’t take it in the winter. That’s over $20/month that I am saving (about 2 bottles of wine) but I am rounding down to $20/month.
Parking
There are few expenses I hate more than paying for parking. We have to pay for parking at work, but I have been parking in a residential area and walking to work instead, thereby saving the parking expense. However, two times per month I’ve been parking in the work parking lot, which costs $4.25 each ($8.50 total).
I gave up my parking pass so now I won’t have the option to do that.
Just by making a few small adjustments (and spending some time on the phone), I am saving $188.45. Since I rounded down on quite a few of these expenses, it’s closer to $200 than $190.
Have you been cutting expenses this year?
I will probably be cutting down a bit on food, as at least for January, we’ve been eating more out of the freezer and the pantry lately. That is partially offset by just having purchased a lamb, heh.
these are great tips! i’m trying to cut costs as well since i’m also getting married and going on a honeymoon later this year. we just called to switch our cable provider so that’ll save a little bit. i’m working on keeping the house a few degrees cooler in the winter and i’m going to call my cell phone provider soon as well. so true that every little bit helps!
I need to do this too, I have about $200 of unnecessary expenses occurring that need to be taken care of. It’s on my list!
We just went over our 2013 spending and are working on our 2014 budget. We’d really like to cut our telecom expense (who doesn’t?). I’ve got a plan to cut the cable–forever–but the hang-up is my wife believes she needs a landline for her work. The way telecom costs are bundled these days, keeping just the landline is so costly, might as well throw in Internet access and cable too! So we’re stymied for now I guess.
I need to go through my bills and see where I can shave off a few dollars here and there. Hopefully I have as much luck as you. My internet just went up $2/month – not the right way.
PS, your skill-testing questions are getting harder. 🙂 They’re usually addition and subtraction, now it is “8 x eight” – which I can easily do… but I just find it interesting that it now included multiplication.
Our transport expenses should be cut down a ton as T now gets a company car and subsidised fuel!
I think a lot of people could save a decent amount of money if they just called their cable/phone/internet/insurance provider and just spoke with the client retention department. Doing that recently saved me over $30 a month. Not much, but not too shabby, either. Way to go on your savings!
So cool to see my little template in action! It’s so personalized, I love it. 🙂
You’re definitely going to have a busy/expensive year, with your wedding and honeymoon, but the fact that you’ve taken the time to map this out will be a huge help. Good job on cutting down some of your monthly expenses! I think mine are all pretty bare bones as it is… I could pay cheaper rent elsewhere, but there’s not a chance in heck I am moving this year.
Ha! I color code cells in my excel budget as well! I’m working hard at keeping my discretionary spending as low as possible this year. We got married last year and are going on our honeymoon this year. We plan on using credit card rewards and frequent flier miles to pay for most of it. But we still want to save over 50% of our income as we plan on starting a family soon and want the option of one of us staying home.
Dang, way to really show off how to budget!! That’s awesome you were able to cut so much and good luck with the other stuff like gas and electricity. That’s so cool you’ve got a fireplace you can rely on instead.