First Person: We Can Make Money by Saving Money

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For our family, it's often not always about making more money, but how to spend less of what we do make. I've found that in many ways, looking for ways to spend less is often easier for us than finding ways to earn more. And in fact, doing this often provides us with the opportunity to work less and spend more time together as a family. It's a trade off we're willing to make in an effort to improve our quality of life while still saving money in the process.

Groceries

We stretch our dollars in a number of ways when it comes to our at-home food costs. Making use of leftovers, expanding meals with filler items such as pastas, rice, beans, and potatoes, using coupons, looking for stores in our area offering the best deals, buying in bulk, and buying store or non-name brands all help us keep our food costs much lower than the national average.

In fact, according to the USDA, the cost of food at home for a family of four (with children ages 2-3 and 4-5, which our family represents closely) spends around $858 a month on a "moderate-cost food plan". Our family spends closer to $300 a month. That number is even low compared to what the USDA considers a "thrifty plan" in which a family of four averages around $545 a month on food costs. This has us saving anywhere from $2,940 to $6,696 a year in food costs compared to the national average.

Utilities

We do our well in keeping our utility costs relatively low. From opening and closing blinds on sunny days to closing vents and doors in unused rooms, monitoring our thermostat, gauging usage, unplugging seldom used appliances, and having downsized our larger home to a smaller condo, we keep our utility costs below average. According to 2009 data released by the US Energy Information Administration, the average monthly electric bill was $84.62 in the state of Illinois. Our consumption for electric costs alone is currently averaging just $46.40, which is $38.22 a month -- or $458 a year -- below the Illinois average.

Mortgage Costs

We were averaging over $7,000 a year in interest alone on the mortgage for our first home. We decided to downsize this home to a smaller, less costly one. In the process, not only we were able to avoid mortgage interest costs by being able to buy the home outright, but we avoided hundreds or even thousands of dollars in additional fees that would have come with the process of undertaking a mortgage on the property.

Kid Costs

We're able to save a bundle when it comes to our kids. From shopping for clothing at resale stores, utilizing hand-me-downs from friends and family, cutting costs on baby supplies through buying store brand products, and finding affordable entertainment venues like the library, cheap movies, and zoo (with an affordable annual family pass), we keep kid costs relatively low. Pair these savings with what we save by avoiding outside-the-home childcare and we're able to save close to $20,000 a year compared to what we might spend should we not make use of such expense reducing options.

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Sources:

Official USDA Food Plans: Cost of Food at Home at Four Levels, U.S. Average, September 2012. http://www.cnpp.usda.gov/Publications/FoodPlans/2012/CostofFoodSep2012.pdf.

Issued October 2012. November 4, 2012

U.S. EIA. http://www.eia.gov/cneaf/electricity/esr/table5.html. 2009. November 4, 2012.

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