Tuesday, January 7, 2014

Review Expenses

Ah, a new year! A clean slate. Time to start making goals for the new year. Save more. Pay down debt. Common goals, right?  And very good ones, too! I feel that making progress towards any goal is to review where you are currently. If your finances are in such a place that you can't save the amount to get to your goal you are setting yourself up for failure. It's simply a wish that can't come true. And that is sad.

To make that wish a goal requires a little work, one of which is reviewing your expenses. Ugh. I know. It seems boring.  But it can pay off.  The easiest expenses to look at are those that are fixed. The ones that are due every month, usually at the same time, for the same amount. Like rent, or your mortgage payment. Sometimes the amount isn't fixed, but you know that it is due each month. Examples are your cell phone bill, electric or gas. I think a simple list is good place to start.

Mortgage. We could consider refinancing to lower the principal and interest portion of our payment. We could shop around for less expensive homeowner's insurance, increase our insurance deductible which should lower our insurance, appeal property taxes, take on a renter, or move less expensive housing.

Cell Phone. We could consider changing plans to fewer minutes, a no contract plan, a prepaid plan or eliminate one or more phones entirely. I don't think we would eliminate cell phones at this point, but it really is an option!

Life Insurance. We could shop around for lower premiums, lower the insurance amount, or eliminate insurance entirely.

Electricity, Water, and Gas. These all really involve using less of the particular utility. Setting the heat lower while away. Lowering the water temperature of the water heater. Taking shorter showers and running fewer loads of laundry.  Turning off lights, unplugging items that are not in use. Investigate other ways to save on utility costs.

Water Softener Rental. In our case we pay by the month, but we could look into purchasing our own rather than renting. We could eliminate the water softener, which we also save us on salt, but would cause us to use more soap (and likely lotion for our dry skin).

Ooma Phone. This is a voice over internet phone line that we pay just $3.72 a month for local and long distance. This is actually something new at our home. We cancelled our land line which was costing us about $30 a month. By switching to an internet phone we have save over $26 a month. We could eliminate this new service if we wanted to lower our bills even further.

Internet. It seems almost wrong to say it, but we could eliminate our home internet service. Or since we have pretty high speed service, we could probably downgrade our service and pay less per month. We could also shop for other providers who could service our area at a lower cost.

We do have other expenses than this list. Clearly we eat, and drive cars. Those expenses can and should be reviewed later.  I hope that in reviewing some of our regular expenses you can see how looking at each expense is a good exercise in really looking at what you are spending and what your options are for those expenses. Eliminating an expense really is an option. Remember, you have a goal! A goal to eliminate a debt that is dragging you down, or a savings goal that you want to reach as fast as possible. Reducing your expenses can be just as good as getting a job. The less money you spend, the more you have to make your goal more than just as wish.

After writing this post,I've decided to talk with my husband about increasing our homeowner's deductible to reduce our premium, as well as look into downgrading our high speed internet. The cell phone bill has been on our list of things to do for awhile. I'm actually concerned that we may end up with a larger bill!

Do you review all of your expenses regularly? Are you overdue for taking a look at your expenses? Is your goal to reduce debt or save this year?

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