Save $10K a Year. Seriously.
That’s my friend Jessy counting her money during a girls weekend in Vegas. She’ll kill me when she finds out I put her picture on here. This is a test to find out if she reads my blog.
Part 3 in a 4-part series on how to save money and make your dreams come true.
In part 1 of this series I wrote about how Brian and I are saving money to fund our dreams. In part 2 I wrote about ways we’re saving money at home. Today I’m writing about tips and tricks we use to save money on our bills. Not all of these tips are practical for everyone, I know. Others result in relatively small savings, but small savings add up, and every single dollar brings us one step closer to quitting our jobs and traveling around the world.
To get us started, here is a comprehensive list of all of the bills that Brian and I paid one year ago. Keep in mind that a few of the bills we receive once every other month (trash) or once every three months (water, soccer dues). A few bills we paid just once annually (magazine subscriptions). I’m including them all for the sake of this exercise. Note that I am not including our mortgage in this list of bills. Our mortgage has remained steady throughout time, we haven’t refinanced or taken any other steps to lower our payment.
Bills in January 2010
Kim’s credit card- $100
Brian’s credit card- $100
Cell phones- $70 (already low, we do not have Blackberrys or iPhones because of the high cost of data plans)
Electric bill- $125
Cable and Internet- $92
Brian’s parking spot at work- $40
Car payment- $157
Car insurance- $142
Kim’s school loans- $222
Brian’s school loans- $105
Trash and recycling- $51 every other month or $25.50/mo.
Water- $158 every three months or $53/mo.
Gym memberships (both of us)- $76
Bus pass- $38 (subsidized through work)
Magazine subscriptions- $181 one time cost (People, US Weekly, Runners World)
Soccer dues- $210 every three months or $70/mo.
Total bills per month in January 2010: $1596.50
Now let’s look at our January 2011 bills.
Bills in January 2011
Kim’s credit card- $100We made it a priority to pay off our credit cards and we rarely use them now. There is no trick to pay off credit cards except to stop using them. This takes discipline and sacrifice. You can’t buy what you bought before, but guess what? You’ll live. And once your credit cards are paid off you can put all of that extra money in your savings account. Total credit card bill now: $0
Brian’s credit card- $100 Paid off: $0
Cell phones- $70 (already low, we do not have Blackberrys or Iphones due to the high cost of data plans)
Electric bill- $125
Cable and Internet- $92We cancelled our cable and now only pay for Internet. I don’t even remotely miss HGTV, but if I did, I could always watch it online for free. New charge: $60
Brian’s parking spot at work- $40 Brian took a job closer to home so he no longer car commutes. Now, he rides the bus to work with a free bus pass provided by his employer. I know this isn’t a feasible tip for everyone but what is important is to understand how much money you spend commuting to work and parking once you’re there. Once you know how much you spend, deduct that from your take-home pay. Maybe taking a job closer to home, even if it pays a little less, will make financial sense in the long run.
Car payment- $157 Because Brian took a new job we were able to sell our car and get rid of our monthly car payment. We do own another car, an old 1995 Nissan that we do not have a car payment on. It isn’t as reliable as our old car but that’s just one more incentive not to drive more than we have to.
Car insurance- $142 We had to carry full insurance on our car since we were still paying it off. Now that it’s sold, we carry minimal insurance on our junker. Current bill: $71
Kim’s school loans- $222 I have two school loans, and I’m only three months away from paying one of them off. When that happens, my new payment will be only $100/mo. For now though, I’m still at $222.
Brian’s school loans- $105
Trash and recycling- $51 every two months or $25.50/mo. Here’s a tip: Our trash company offers a once-a-month pickup service for half the cost we pay now. We haven’t switched yet, but plan to.
Water- $158 every three months or $53/mo. $138 every three months or $46/mo. We disconnected our downspouts and saved $22 per bill on our stormwater charges. Check with your local water utility to find out if they offer a similar incentive. New cost: $46/mo.
Gym memberships (both of us)- $76 We cancelled our gym memberships and run, bike and hike instead. Despite my fear, I do still fit into my pants.
Bus pass- $38 (I pay only half the cost through work) I cancelled my bus pass and began biking to work. Not only does this save me the cost of buying a pass each month, but my employer actually pays me $38 a month to do it!
Magazine subscriptions- $181 (People, US Weekly, Runners World) I cancelled them all. Now I just flip through the magazines in the grocery check-out line and still stay pretty up-to-date on all my celebrity gossip. Remember, it’s a weakness of mine.
Soccer dues- $210 every three months or $70 a month I was playing on three soccer teams and Brian on one. I dropped my most expensive team to cut our costs down to $150 every three months. We love to play soccer, so we won’t give this up. New cost: $50/mo.
Total bills in January 2011: $774.50 – $38 to bike to work= $736.50
In one year we’ve cut our bills by $860 per month. That’s an extra $10,320 dollars we can save to travel the world!
I know that most people aren’t able to sell their car and bike everywhere and that for some paying off credit cards is years away. What I’m trying to demonstrate by displaying our bills to the world is that there are simple ways to reduce your bills each month. Do you really need cable, DVR and that fancy smart phone? Maybe you do. For Brian and I, our priority is traveling, so we’re making due without things we might otherwise think we need. Saving money is about sacrifice and priorities and, trust me, I think about that as I climb on my bike at 6am when it’s 34 degrees and pouring down rain (hello, Portland). But when I’m exploring the temples in Thailand and trekking through the mountains in Nepal I imagine that it will all be worth it.