But then the article cites three examples of people who reduced their spending over a two-week timeframe. That's fine and dandy, but heck, I could cut our family's spending to almost nothing over just a two-week period! I think most people would want examples of how to consistently cut their expenses in half over a lengthy period of time, not just a few weeks. Therefore, I've taken the opportunity here to explain some of the changes my own family has made to cut our expenses almost in half from 2009 until 2013.
As I'm sure it is with most families, our home-related expenses are some of the highest in our budget. From a mortgage and utilities, to property taxes, insurance, and home maintenance and repairs, the costs related to living in and maintaining a home can really add up.
Thankfully, when we bought our first home in 2008, I began tracking the costs that went into carrying that property. From the water bills to the cost of the lawn mower to cut the grass, I made a detailed ledger of what our home-related expenses were over the years, and it was shocking to see just how much money we pumped into the home on a regular basis. Therefore, as the bills kept coming, but the value of the property kept dropping, we decided to sell and downsize to a small condo that we could afford without a mortgage.
Costs looked something like this in our single-family home:
- Mortgage -- $1,350/month
- Property taxes -- $350/month
- Utilities -- $300/month
- Maintenance/repairs -- $200/month
- Insurance -- $40/month
This meant that we were paying over $2,200 a month on average to carry our home.
Now -- since we downsized -- our costs look more like this:
- Mortgage -- $0
- Property taxes -- $240/month
- Utilities -- $200/month
- Maintenance/repairs/association fee -- $350/month
- Insurance -- $15/month
So now we're paying about $800 a month in home-related costs, a huge difference of around $1,400 a month or about $17,000 a year!
After I made the move to start working from home at the end of 2007, we held onto our second vehicle for a while. However, there were maintenance, insurance and parking costs for a vehicle that I rarely drove. Therefore, we decided to downsize our vehicle fleet.
By taking that second vehicle to CarMax, we not only made some money by reselling it, but we ended up cutting our transportation budget by between $1,000 and $2,000. Not only this, but I reduced the temptation to go out and spend more money by limiting my available transportation when at home.
Healthcare and health-related costs can be one of the largest costs in a family budget. After income taxes and home expenses, healthcare costs are third in line in amount on our list of budgeted expenses. However, compared to last year, they're down significantly due largely to my wife's change in jobs in which our health insurance premium fell from over $8,000 a year to under $4,000.
While changing jobs might not be a feasible fix to lower your insurance rates, there was more to our savings than just this career move. As my wife is a type 1 diabetic, she needs regular and quite pricey (especially without insurance) supplies. The multi-month gap in health insurance created by her job change could have resulted in having to pay significantly more for these supplies. However, over the years, I've urged her to keep a large amount of emergency diabetic supplies on hand at all times. She was able to rely upon this stock to avoid having to order more when we were without insurance.
In this way, not only did we reap the eventual rewards of lower premium costs through her job chance, but we saved ourselves thousands of dollars in the meantime by relying upon this emergency supply to get us through the insurance gap.
And in these ways, by 2013, we've been able to cut our regular expenses by nearly half of what they were in 2009.
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The author is not a licensed financial professional. The information provided in this article is for informational purposes only and does not constitute advice of any kind. Any action taken by the reader due to the information provided in this article is solely at the reader's discretion.