First Person: When Expense Cutting Hits Bedrock

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There sometimes comes a point at which there just doesn't seem like there's room left to cut our expenses any further. We "hit bedrock" so to speak, and it doesn't seem like we can drill down to find additional ways to cut our costs. Since we've cut so much off our budget throughout the year and in so many ways and places, it's difficult to imagine cutting more. Yet these are the points at which it may be time to step back, re-evaluate, and maybe do a little outside-the-box thinking when it comes to finding new ways to cut back a little bit more.

Maintain a Steady Course of Cost Reductions

Personally, I find looking for ways to cut costs interesting, and actually kind of fun. I make it a sort of game, but like many games, once I learn the game, over time it can lose some of its appeal. This is why once I've made cuts to things like various utilities or food costs, it's important to maintain them.

A one-time cut of $40 in utility costs is nice, but if we can maintain that cost as we have been in our new location over the period of a year or multiple years, those savings can expand exponentially, building from just $40 into hundreds or even thousands of dollars over the years. And when I can meld those savings with similar or even greater savings in things like food costs, transportation, and housing costs, and then maintain those savings as well, my hundreds and thousands of dollars start to become tens of thousands of dollars in cut costs.

Sort Tailings

In gold mining, "tailings" are the left over material that has already been processed of its gold. Sorting or "running" the tailings means to reprocess this material that has already been processed, but not necessarily processed thoroughly enough to extract all the gold. The returns on the material might not be as high as when it was initially run but are often still enough to make a difference.

I do the same thing with my expenses, "sorting the tailings" so to speak. Just because I've made the easy cuts in certain expense categories like utilities where there can be simple ways to save like opening/closing windows or vents or turning the heat or AC up or down, or in a category like food costs where I can use coupons and buy store brands to cut costs significantly, I don't want to become complacent in continuing to look for savings in these areas. Therefore, I will continue to process these expense areas, looking for new ways to save. For example, our food costs were cut significantly by doing much of our shopping at a nearby discount store and buying their store brand for many of our grocery needs. However, while these savings were good, I realized that I could cut our costs by about another 30 percent simply by doing our shopping at another discount store, saving us close to an extra $100 a month.

Drill Down to Make Current Cutbacks More Efficient

I could be happy with my extra savings on expenses like groceries and sit back, content with the fruits of my savings labor…but I'm not. Taking my store example a step further, just because shopping at our current discount store is cutting our food costs significantly, this doesn't mean that I can make our shopping there even more efficient.

By getting to know products and prices at our store locations and watching store circulars for weekly specials, we are able to further maximize our cost cutting efforts, making our cutbacks even more efficient and providing us with new ideas and ways to save.

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