Reducing our outgoings

It was great developing our budget and I felt a lot more relaxed knowing there was a plan in place. One thing that the budget told me though is that we were paying lots of money for lots of "stuff" and I was unsure whether all these items were necessary.

I went through the budget and considered each item carefully. Was this something we really needed? Was this something that truly added value to our lives and to our future? Was there a cheaper option available to us? This produced some interesting results and we were able to make a number of changes as follows:

Cancelled our newspaper subscription - now we read the news online and only buy a newspaper on the weekend - saves $30 / month
Cancelled our telephone messaging service - saves $7 / month
Moved our credit cards and transferred balances to lower interest rates - haven't worked out the savings on that yet
Changed mobile telephone plan - saves $35 / month
Started using the train for commuting to work every day - saves at least $35/week probably more
Started cycling to work twice a week - saves $12 / week on train fares

Currently we are spending a lot each month for various insurances including term life insurance, house and contents insurance, serious condition cover, health insurance and income protection insurance. With no emergency fund or savings behind us we see the level of cover we have to be necessary. As our finances improve we will be able to look at reducing some of the insurances we have.

In addition to cutting things from the budget, we looked at what items we had that could be sold online. Due to a long-standing elbow injury my golf clubs had gathered dust for over two years. I thought long and hard about it but then decided they could be sold. Other items cluttering our house and garage were also sold online. All proceeds went straight into paying off debt.

One area we were spending a lot of money on was our grocery bills. With no budget in place we were spending a minimum of $1200 / month (and up to $1500 / month). We decided that we should be able to easily live on $250 / week groceries (bearing in mind that we were catering for between 6 and 9 people for evening meals each day). To ensure we could stick to the budget we started doing a weekly menu plan and developing a grocery list from the menu plan. Menu planning and saving on groceries will be covered off in my next post.