Living on less than half our income did not come easy. When we were first married, my husband and I ate out pretty much every night, didn’t have a budget, and didn’t really have a plan for our money. By creating and sticking to a budget and using the cash envelope system to pay for various items in our budget, we are able to better manage our money responsibly and pay down debt. This past year, we mostly saved money because I was pregnant, and we were preparing for the arrival of our son, Samuel. However, once Samuel was born, we were back on track to tackle our debt. It’s not easy to start a budget, but once you get a budget laid out and figure out where you are going wrong, it’s very easy to stick to it. Then you begin to feel like you are finally controlling your money instead of your money controlling you. The sense of satisfaction that comes from sticking to a budget helps both my husband and myself feel like we are winning the war on debt even though it’s a slow process at times. Here’s some of our monthly expenses and how we managed to reduce them.
We do not have cable with Time Warner but we do have internet. Our internet is Roadrunner Light and cost $14.99 per month. We could get a faster speed for twice that amount, but we have chosen to stay at the slower speed. This works for us for the most part as we are able to surf the internet with no problem and Netflix runs fine on this internet speed.
$88 Natural Gas and $83 Duke Power:
We have gas heat so we have a gas bill as well as a power bill. Our house is a bit older. So, it’s not quite as energy efficient as we would want it. However, we set up an equal payment plan with both the gas and electric company so we know exactly what our monthly payment will be each month. Both companies base this off of your usage for the previous year. So, our bill for both is the same every month. Therefore, you don’t get a surprise electric bill for $200 in the summer.
$75.92 Cell Phones:
We do not have a home phone. However, both of us have cell phones. We use pre-paid cell phone plans. I currently use Virgin Mobile and it runs $30 a month plus tax for unlimited talk, text, and data. My hubby uses T-Mobile and his plan runs $40 plus tax. This comes to a grand total of $75.92. I have looked at switching to Republic Wireless, but if my plan is already $30, I’m not sure if $5 will make that much difference. However, they do offer cheaper WiFi plans as well. This may be something we consider down the road if we decide to purchase new phones, but for now I am very happy with Virgin Mobile.
I used to do all my grocery shopping at Food Lion, which is pretty much the cheapest grocery store in our area. However, then I discovered Aldi. Aldi does not take coupons, but has very low prices on many of the foods we buy on a monthly basis. I have tried many of the Aldi brands, and try to buy the majority of our groceries at Aldi. Some of the items I get on a regular basis each month include shredded cheese (much cheaper and you get more!), sliced cheese, sour cream, milk, eggs, canned biscuits, canned veggies and soups, marinara sauce, frozen french fries, bacon, hot dogs, potatoes, bananas, tomatoes, tortilla chips, any bread we need, and whatever fruit is currently in season. We also love their freezer bags, sandwich bags, and premium toilet tissue. I typically do not buy meat like chicken and beef at Aldi. I like buying those at Food Lion. Overall, we save a ton on our groceries each month and typically can live on $300 a month for groceries. I am still working to reduce this amount by stretching our meat further, planning meals around the sales, and making many meals from only Aldi products. This month I am also trying to make more of our snack foods for lunches instead of buying prepackaged food items like granola bars and snack crackers which tend to run your grocery bill up.
$50 Eating Out:
We don’t typically eat out every month, but the last two months we have had one date night where Michael and I go out and just enjoy a really good meal or watch a movie. For the most part, especially with a newborn, we are at home eating a home cooked meal and watching a TV show or movie on Netflix. Another option, which we do quite often, is going out for dessert. We sometimes go out for ice cream or milkshakes and take joy rides. We also look for restaurant deals on Groupon to stretch our eating out budget so we can go out more than once each month.
This is a new expense for us! Our baby Samuel arrived on July 5th, 2016. So, I am hoping I have budgeted enough for diapers. We are currently using all the diapers we received at showers and that I stockpiled (on sale) prior to giving birth. However, when we do start buying diapers, we will probably have a better idea if this amount will work or not. I bought most of the diapers I stockpiled on Amazon.com because they were on sale at an excellent price. I also purchased baby wipes in bulk on Amazon. I am open to using cloth diapers, but decided not to do that starting out since I felt like I would be overwhelmed already with learning how to be a mom. However, we may consider this as Samuel gets older.
$74.44 Car Insurance:
We currently use Allstate for our insurance. I called them to see if they could offer us any discounts on our current policy. I found out if we set up automatic payments, we can save an additional 2% and if we sign up for e-bill (receiving our statements online), we receive an additional 15% discount. That’s a total of 17% off what we are currently paying. Just by making one phone call, I was able to reduce our insurance premium by $55.00, which is about a $10 savings each month.
$10 Clothing Budget:
We don’t typically buy clothing every month. So, this money goes into our cash envelope and then if we we need a new item, we go shopping. Many times, I will shop at consignment shops, thrift stores, as well as online consignment stores. I love shopping online consignment stores because you can get a really great price on something you need without all the legwork of looking at physical stores. I found many maternity items this way when I was pregnant. My favorite store is Swap.com. They have clothing for men, women, kids, and babies as well as baby items which I may need in the near future. Another great online consignment is Thredup.com. Both of these online consignment shops will sell your clothing for you as well. They do all the work and you can make money off of the clothing you no longer use.
I set aside $10 each month in our cash envelope system for laundry detergent and cleaning supplies. I do not use a lot of cleaning supplies. This is mostly because I don’t want to expose myself or my family to the chemicals. I use a product called Norwex that has silver embedded into the cloths. They disinfect and clean well with just water! In addition, I use their non-toxic laundry detergent and bathroom cleaner and love both. I usually order two bags of the detergent and that will last me a good 3-4 months.
$25 Oil Change/Car Maintenance Budget:
We set aside $25 a month for car maintenance or oil changes. I know you may be thinking this is not enough if we need major car repairs, but we have a $1000 emergency fund set aside for those repairs should we need to use it. The $25 a month covers oil changes. I usually go to Groupon and purchase the oil change through Jiffy Lube on their site. This gives me not only an oil change, but a tire rotation and window treatment. I use the Jiffy Lube near my work and it’s super convenient and fast. Using Groupon or coupons keeps our oil changes within budget and we sometimes have money left over which we can move to another category.
$40.16 Life Insurance:
We purchased life insurance through Zander.com when I found out I was pregnant with baby Samuel. We wanted to make sure if something happened to either of us, that the other would have what was needed to continue to care for our child and not have to worry about bills or money. Zander offers competitive rates for different insurance companies and they find the best deal for you. It’s one of the companies that Dave Ramsey recommends, which is why we chose it.
$20 Hair Care:
Michael gets a hair cut about once every two months, and I get a cut and color about once every three months. This amount will usually cover both. I know that sounds really cheap for a cut and color, but I actually have a friend that cuts and colors my hair at her house (without the salon price), and I give her $40 for that each time. So, it is a bargain for me!
$80 Blow Money:
Michael and I each receive $40 per month of blow money. This is money we can use on whatever we want. We would love to have more than this, but we are trying to pay off debts quickly. So, we limit this amount to $40 each. This can be used for lunches out at work, pedicures, Starbucks, or books in Michael’s case. I think he buys about 4 books every month with his. I spread mine out over the month, but it typically goes to lunch out with the girls at work.
$8.53 Netflix Entertainment:
We have a very cheap entertainment budget because again we are trying to pay off debt. Neither of us watch very much TV. I watch a lot of YouTube videos mainly on my phone. So, I don’t have a need for cable. We both love reading as well. So, when we do watch TV, we watch a show or movie on Netflix.
We contribute $40 a month for gifts to our cash envelopes. This is to cover birthdays, holidays, and anniversaries. It typically does not cover our Christmas budget. We just budget more in November and December for Christmas gifts as we have plenty of give in our budget. Since we don’t have birthdays, anniversaries and holidays every month, the money stays in the envelope, and then when we hit a month like January where we have three birthdays, we have it covered.
A couple of things that are not included on this list are health insurance and child care. Currently we both have health insurance through our employers. So, these expenses come out of our paychecks (pre-tax). In addition, my husband works 12 hour shifts on the weekends. So, he will be keeping our son during the week and my mom has volunteered to keep him on Fridays. We are very blessed to not have to pay for childcare, and I am thankful I can leave my baby in good hands when I return to work.
In addition to all the items above, we do contribute 10% tithes to our local church and the remainder of our income goes directly to tackle our debt. By living on less than half our income, we are able to put a large amount towards the smallest debt and follow the Dave Ramsey snowball plan. Living on less than half our income does not feel like deprivation to us. We actually are so use to this that I think we could do more to cut expenses. Every month I re-evaluate our spending and see where we can cut so we can get out of debt sooner. That’s part of getting gazelle intense with our war on debt.