5 Not So Painful Ways to Trim Your Budget

Every budget, either those meant for organizations/companies or personal budgets for a family includes two parts, income and expenses. The economic data over the past two years dealing with everything from bankruptcies to foreclosures to unemployment indicates that many families not only didn’t have a budget, but regularly spent more than they earned each and every month. The end result is the situation we are in now. Pay attention to the following list as it lists a few simple, not too painful changes you can make on a personal level that can dramatically improve not only your short term financial situation but could also potentially set you up for a worry free financial future.

1. Before you can work on trimming expenses to balance your budget you need to create a monthly budget so you can see where your money is going at the moment. This is the foundation of any Personal Finance makeover, without knowing how much money you earn each month after taxes and where your money is going when you spend it, it is practically impossible to improve your long-term financial prospects.

2. The 2nd highest monthly expense for most Americans after housing is groceries and food. The easiest way to blow money here is by not planning out your food expenses in advance and relying on takeout and restaurants for a significant amount of your monthly food expenses. While it is certainly convenient and family friendly to take your kids to the local fast food joint, it is not only unhealthy but also much more expensive than making a home cooked meal. Cut out all unnecessary restaurant trips, plan your food schedule for the week in advance, and stock up on fresh produce and non processed foods as these are typically much cheaper than processed and prepackaged foods such as pizza’s and microwavable dinners.

3. The average American family has two cars, and there are many more with 3 or even 4 cars to each household. While it may be convenient for everyone of a driving age to have a car it is certainly not cheap. Transportation can eat up a huge chunk of your monthly budget especially if you have a decent sized daily commute to and from work. While it may not sound appealing, if you are in a cash crunch try living a month with only 1 car. Use public transportation, car pool, or work together with your significant other so that one person has the car one day and the other has it the next day. Obviously this is not something that can work for every family, but don’t let laziness or inconvenience stop you from trying this out if possible. The savings may shock you as not only is your car payment a huge expense each month but don’t forget insurance, registration, gas, and repairs!

4. Cut down on your phone services. Most Americans nowadays have a cell phone plan as well as some sort of home phone service. You have two relatively pain free options when it comes to cutting down your monthly phone bills. One, eliminate your home line and rely entirely on your cell phone. While this option can work for most Americans there will be some that still need a home based phone line for business or international calls. The second option you have is to switch over to an internet based home phone line using Vonage, Skype, or MagicJack. All three of these options use the internet to make and receive phone calls on your home phone. Not only do they work just as well as your traditional phone line but they are also much much cheaper. Give these a shot before you cancel your home phone line to make sure it is something you are comfortable with.

5. Cut down or eliminate your television package. The average cable or satellite TV package now costs a consumer over $80 per month in this country. That’s almost $1000 per year that you handing over to your TV provider. Is it worth it? While for some it is, for the majority of viewers they don’t nearly get enough enjoyment out of this $1000 to make it worth it. Before I recommend getting rid of TV all together, I will recommend some other options. Downgrading to a basic package by itself can cut that average bill in half, and skipping on the HD and DVR boxes can save you another $20 or so per month. If you do want to eliminate your cable/satellite TV completely you can still enjoy TV. Hooking up a digital antenna will allow you to get HD signals of your local stations for free and an antenna typically costs less than $50 and the setup is very easy. If your favorite shows are not on a local station head online as many TV stations now broadcast their content online for free.