How to Start Saving Money - Step Two & Three
At the end of October I wrote about how I started to get organized to start saving money. Step one is simply figuring out what bills you are paying as money flows in and out of your home. Once you have your master list of what needs to be paid now comes in step two & three.
Alright, now comes the real effort... tracking down all of the amounts for these expenses. You need to see what you are paying for each category and how much it is costing you to run your home. A neat nerdy fact about doing this - this task, although a bit of effort not only gets you started to save money but also gives you a frame of reference on roughly how much money you will need annually once you retire + whatever fun amazing things you want to do now that you're not working. Retirement can be such a scary word but when you actually see the numbers you need to save, it doesn't seem so scary. You might like to say you should save a certain percentage of your income but sadly many of us are living well beyond our means and have created a lifestyle that our income does not support. Seeing your set bills and expenses in front of you is a bit of an eye opener. Note, I said set bills, groceries, fun things, etc are not even included on this list...boy oh boy, can life be expensive!
Step 3: Now that you have a list of concrete bills and amounts, it's time to start questioning and analyzing some of your bills. For example, how often are you watching cable? Do you find yourself just watching Netflix? Can you survive on Netflix only? Why are you paying $60 (or more) for cable & $7.99 for Netflix when you're only utilizing or needing 1 service? Can one be terminated to create a savings? BOOM! Congratulations. You, my friend, are amazing at saving! Ha! Each person has their needs and wants so the main focus of these ramblings is just to create a self awareness of how much money is flowing in and out of your home and if there is still a need for some items you pay for monthly. I contacted each provider to see where we could save money and if our bills reflected our lifestyle. For example, we have a small family of four and our children are young which means we are home quite a bit, I wanted to ask Enmax our electricity & water provider, if our monthly bill was high, low, or just where it needed to be. After speaking with an extremely helpful customer service representative, she said we were doing great and had some helpful tips on maintaining our home to ensure our bills stayed low. After going through our bills here are a few examples where we saw sustainable savings:
1. Cut Cable - Only watched Netflix - $60+ in savings a month - sustainable change.
2. Sought out a broker to give us a quote on home and auto insurance. By simply shopping around we were able to maintain our current coverage but simply changed insurance providers. With a bit of shopping around we saved $300 annually - sustainable change.
3. Downgraded our internet package. We are currently with Shaw and within your account online you can see exactly what your monthly usage is. We realized we were not taking advantage of our current plan and were able to downgrade without noticing a change in our internet services. $40/month is savings -sustainable change
4. We cut the data plan on our smart phones: I know *GASP* this was sort of a huge decision, which is so silly. How do our phones control us?! We decided that we are mostly at home either working from home, or with the kids and on our own wifi for the majority of the day. It saves us roughly $60 a month and to be honest there have only been a handful of times when we have been without and haven't been able to connect to ShawOpen, a friend's wifi, a coffee shop wifi etc. It's everywhere. - currently this seems to be a sustainable change.
5. I put my gym membership on hold. It is a very reasonable monthly fee... IF... the big if. IF I actually use it. At this point it boils down to pure and utter exhaustion. IF my kids happen to nap together I find myself doing something else on my to-do list or I'm too exhausted to go. I do have the ability to start it up again without paying the initial member fee if I miss it or get a huge 2nd wind to workout! This is saving us $40 a month and I feel less guilt, get in activity when I can, and creating more opportunities with friends to be active & social.
So there you have it, just a few simple things that have snowballed into some savings for our family. I challenge you to get organized and see where your money is going and how much of it is leaving your wallet when it doesn't have to. You can choose to spend that money on more exciting things or bank it for savings! The world is your oyster.