My husband and I usually rack up a monthly credit card bill of about $3,000. Recently, it dropped to just $669.19. And I ain't kidding. I shaved more than $2,000 of my spending because of a new simple budgeting system that was easy to use and discouraged impulse buys.
I did it by using my simple budget formula:
Income minus savings minus necessities minus irregular expenses = discretionary spending.
My discretionary spending, which is how much money I have to spend each month, totalled $796.50. I tracked my expenses on an index card, subtracting each purchase and I have never hated parting with my cash quite as much.
Something about writing it down and subtracting each expenditure really made it easy to say no to my credit card.
To apply my simple budget system to your finances fill in the dollar amounts for each of these categories.
Income: (the easiest category if you are salaried)
Savings: $833 (to max out ROTH Ira accounts for Hubby and me)
Necessities: rent, gas, electricity, Internet service, cell phone service, gasoline (Hubby and I each get one full tank a month seeing how I work from home and he commutes on his bike), doctor visits, medicine, gifts and my newspaper subscription to the Sunday NY Times (which is on the chopping block)
Irregular expenses: car insurance, car registration, car repairs, dental visits, Christmas presents, magazine subscriptions, charitable donations, vacations, yoga classes, and oil changes. I totaled what we spent on these categories last year and divided by 12. I automatically deduct this amount from our checking account into a special ING savings account each month.
Discretionary spending: food, clothing, bus fare, entertainment, vitamins, toiletries, meals out, hair cuts, travel, and home maintenance. To see why I put food on the discretionary list, go here .
February was the first month Hubby and I tried this new system and we both had money leftover. You should give it a whirl if you're looking to cut down on your spending. Or let me know about your favorite budeting system in the comment section below.
More Resources:
Julia Scott writes a savvy-spending blog called Bargainbabe.com . She is a cheapskate by nature and a journalist by training.If you think this infringes on your copyright, contact us.
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i barely take home $2,000 a month so, clearly, this is not for me
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Agree with kid-zombie. I used to bring home about $2000/month. After this next pay cut, I'll bring home around $1200.
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I wouldn't pass over this system so fast. It's not about the dollar amount you will be able to cut out, it's the percentage. Try it before you knock it!
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I like it!! But, did you ever tried saving a dollar a day. You may think it is not worth it, but I saved roughly $120 in two months which mean some days I would save more than one dollar like two dollars. If you think about it, mostly ever spend money ever day, so if you would just take out one dollar a day, you can save about $365 in a year or $730 a year with two dollars a day which is my goal. But I respect you money plan!!!
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mint.com or yodlee moneycenter can be your best friends.
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My budget is similar I deduct an amount to go into savings to pay those big bills (car payment,loan,car insurance) then transfer it back at bill pay time, it sure helps me to have that set aside so it's not accidently spent. As for saving extra well thats not in my cards just now but I'm looking forward to being able to do that after paying off my debts early.
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I currently own a CheapMedsDirectory.blogspot.com and cutting back on this would kill me! I just sent off for my business cards. If people would stop and think about what they're buying just for second. Name brand, your buying a name. Yes, I understand the quality is better but are you really that spoiled? Thats why I actually buy all my pet medications, vitamins, natural remedies, and perscriptions from my directory. I save more on this than if I was to try and commute to a depot store. I'm big on Acai and love to use it. I wouldn't dare buy that from one of these fake NYtimes websites for $89 per 60capsules. Rediculous! My evitamin store saves me more money at the end of the day than any other store online or supplement offline store.
regards,
George E. Sargent
http://www.georgesrx.com (all your medication needs)
http://www.cheapmedsdirectory.blogspot.com (Articles and Reviews)
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Fall clean up of your yard can cost you as much as $500. Here are some tips on how to save money on landscaping: http://www.creditfyi.com/Creditpedia/Manage-Your-Money/10-Ways-to-Save-Money-on-Landscaping.htm
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