Reevaluating Your Household Budget to Save Additional Money

 

Budgeting can be a pain for those who are just starting out. Despite this challenge, it is certainly a necessity to stay on top of your household finances. While it can be hard to make budgeting a habit, with practice and time it will become second nature. If you have a general household budget but find that you still can’t seem to save enough money for things that you want, maybe it’s time to reevaluate your budget. Many times taking a second and third look at your budget can help you to find additional areas to save.

If you’re not used to budgeting it can certainly be a hard habit to keep up with. You start off making sure that you track all of your expenses and stay within your means, but then you periodically revert back to your old ways. So at least once every six months I go back over my budget to see what’s going on. Checking for expenses that are higher than usual or expenses that I can eliminate are the main objective. Here are some things I did as I reevaluated my budget this year:

·  Look for New Offers – Promotional offers for services such as cell phone plans and cable/internet/phone services are pretty common. However, most of those offers run out within a few months to a year. So every six months, I check around to see if I can find new offers that will save me money while allowing me to keep the services I need.

·  Switched service providers – necessary monthly expenses like electricity and water cannot be avoided, but there are ways to save money on them. For instance, did you know that you could switch energy providers? Many states now give their residents the power to choose their own electricity provider, which could save you money. Sites such as http://www.localelectricitycompanies.com make it fairly simple to search for energy providers and make the switch.

·  Eat Out Less – I had originally set a lunch budget for myself of no more than $5 per day. However, when I thought about it, I was spending $25 per week and $100 a month just on lunch for myself. If I also factor in our weekly family outings where we would pick a restaurant and eat out I was look at about $50 per week and $200 a month. When you factor those costs into a year, you’re looking at a total of $3600 a year just to eat out. Because we love trying new cuisines, I decided that instead of eliminating it, we would simply do it less. I now eat lunch out twice a month with a limit of $14 we dine out twice per month. This brings the monthly expense down to $114. An annual savings of about $2200.

·  Use a Coupon for Everything – I had been familiar with using coupons to save on groceries, but that was pretty much it. After reevaluating my budget I realized that I was doing a little extra spending when it came to things like clothing and entertainment. With a little online research I found that there was a coupon for everything you could imagine. From percentages off your next oil change to a discount on clothes and restaurants, there was a way to save for everything. I signed up for every coupon site I could think of and before making any type of purchase I did an online search to see if there was a deal.

·  Pay Cash as Much as Possible – We had done a great deal to get out of debt, but we still had 2 or 3 credit cards we would use from time to time. Even though we paid our bills timely, when I realized how much we were “giving away” in interest, I figured it was time to make a change. Paying for things in cash (or with a check card linked to a bank account) eliminates the cost of processing fees and interest which can add up. I made up a household rule that if we couldn’t afford to pay in cash, chances are we didn’t really need it. This helped to stop impulsive purchases and allowed us to put more into savings.

Maintaining a reasonable household budget is essentially the key to putting more towards your savings. By reevaluating the budget you’ve set up at least once every six months to a year, you can find additional ways to save that you may not have thought of before. Reevaluating also allows you to see where you may have made mistakes and how you can avoid them going forward. It may seem like a chore now, but when you start to see how much income you have left over to save or do things that you really enjoy (like taking a family vacation), you will certainly appreciate the effort you put forth throughout the year.