The best thing I ever did to reduce my monthly budget was changing my telephone plan -- both my home and cell phone plans.

I am a school teacher and my wife, Tracy, is a stay-at-home mom to my two young daughters. Since we do not make a large income, we have to watch every dollar we spend. We are both very frugal and pretty good about tracking our money. A few years ago, Tracy and I sat down and really analyzed our monthly expenses to see if we were over-spending in any area. We discovered we were spending way too much on our phone plans.

When we moved to our house, we planned on signing up for a basic package but were talked into getting one we did not need . Some of you know what it is like when you move - you have so many things going on that you do not really pay attention to everything you are signing up for. After analyzing this expense, Tracy and I realized we were paying for all the bells and whistles - caller id, three way calling, call waiting, etc. We did not use all of the features we had and, thus, were wasting money. We cut our plan down to what we needed and saved about $50 each month by doing so.

At this same time, we looked at our cell phone package. We only used (and still do) our cell phone for emergencies. Well, we had a plan that gave us unlimited minutes but cost $50 per month. Since we rarely used our cell, we were (once again) wasting money. We now have pre-paid cell phones and spend about $15 each month for both of them combined. That is a savings of $35 each month and we now have two cell phones instead of one.

The biggest lesson I learned was how important it is to know how you are spending your money. Many people sign up for something and think they will change it in the future. Life then happens and you forgot to cancel and/or change this and end up paying for something you don't really use. By changing our phone plans we saved $85 a month.  That may not sound like a lot but it adds up to over $1,000 a year! That can go pretty far on a teacher's salary.