Using a Budget: Cutting Costs

In my last post, Using a Budget to Get Out of Debt, I shared how we built our budget. However, I didn't share specifics on the amounts we spend because it is different for every family and if I shared those amounts right away you would have said, "there's no way we can live with an $80/week grocery budget" and quit reading. For this post I want to share the ways that we save money on everyday expenses like fuel, groceries, and insurance so we can keep our budget at a minimum and put the maximum amount of money possible toward debt. 

Just so you know, we have failed many times with our debt payoff plan. I was reminded of this last week when I came across a hand-written ledger of our debt from when we started paying it off...for the second time. I use the term "started" loosely because while we were paying off the debt we were still actively accruing it for things like all-inclusive vacations, dates at restaurants we couldn't afford but wanted to feel like we could and outfits for those fancy occasions. The best part about this hand-written reminder of where we started was the note written next to the Visa. 

Sometimes I find myself thinking "if only we did then what we are doing now we could have been debt free a long time ago" but those mistakes taught us a lot of valuable lessons and we wouldn't be as driven to pay off the debt now if we hadn't had a couple of failed attempts. 

Now for the fun part, cutting your expenses down to the bare bones.

Fuel:
On a monthly basis we spend a total of $350-$400 on fuel. I drive 60 miles roundtrip to work three days a week and Zac drives an average of 250 miles a week to his various jobs. No, we don't drive a Prius. Here's how we keep the fuel budget down. 

SA honors competitor's coupons and they double them on Tuesdays. They also have an SA Card (NOT a credit card) that gives you an extra 3 cents off/gallon and earns points by purchasing fuel or other items. You can also earn points by buying gift cards: 10 points for every dollar. So here's how it works, every Tuesday we have our coupons ready, always 10 cents off/gallon. We fuel up, and we reload our gift card with $100 (earning us 1,000 points). We are now getting 23 cents off per gallon because of the double coupon and the SA card discount. Plus, we are earning 10 points per gallon of gas. This saves us an average of $7/week. The best part is once you accrue 8,750 points, you can redeem the points for a 50 cents off/gallon coupon. Redeem that bad boy on a Tuesday and you're saving yourself $1/gallon! Using this system we save an average of $70 every two months on fuel (which is about how long it takes us to earn a 8,750 points). **Not all SA gas stations participate in this program, so be sure to ask. Some stations offer a gift card that can only be used for fuel but offers 5 cents off per gallon rather than 3.** 

Groceries: 
We are a family of 3, so our grocery budget might pale in comparison to yours, but we stay around $80/week. We used to meal plan around the weekly coupons, but recently we have begun shopping at Aldi, which requires a reverse meal plan approach. Aldi doesn't always have everything, but the stuff they do have is cheap. We usually get the basics like chicken, veggies, fruit, milk, etc. for less than $60/week. Based on what they had in stock, we plan our menu. I am also part of a freezer exchange meal group. Seven of us pick a meal to prepare and freeze and we get together once a month to exchange. The beauty of this is it is cheaper to buy in bulk and when you're making a recipe times 7, you can buy the 10 pound package of beef. You go home from the exchange with 6 other meals that are already prepped and just need to be thawed and thrown in the oven or crockpot. I can usually prep my meals for around $60. We also purchased 1/4 of a cow this past summer which was a huge savings and the beef is fantastic. This was a bit of a budgeting conundrum because we don't usually have money left in the grocery envelope at the end of the week, so we've started setting aside $100/week and only spending $80, that way when those opportunities arise we have the cash. 

Insurance:
Most insurance policies are cheaper if you pay them annually, the problem arises when the bill shows up for a big chunk of money and we haven't saved for it. To avoid that, we transfer money into a Capital One 360 savings account every month for the cost of the bill divided by 12. For example, our life insurance premiums are due every April and cost $600, so every month $50 is automatically transferred out to Capital One. By April there's $600 ready to go plus the interest the money has accrued which jumpstarts the fund for the next year. We chose Capital One (previously ING) because they had the best interest rates for a savings account at the time of opening. Another note on insurance, it can never hurt to get a quote, most people are paying way more than they need to be for auto insurance. If you don't have it through the same place as your homeowners, start there. Bundling the policies can save a ton of money. 

With this month's gazelle envelope a total of $850 went toward our last credit card, bringing its balance down to $4,275. In the six years Zac and I have been together, we have never had a combined total of credit card debt this low. A budget is sort of like a baby, every time you think you've figured out their routine, they start teething, eating solids, switching from bottle to sippy cup, switching to whole milk, wanting dad instead of mom, wanting mom instead of dad… you get the point. Don't get frustrated when the budget needs adjusting, but do your best to keep it tight. An aching budget means there is extra money available to pay off debt. 

"For where your treasure is, there your heart will be also."
Matthew 6:21