3 Big Budget Expenses to Prune

My father taught me how to prune trees. You find where you want to cut and you look for that fork in the branch. That is where you cut. No hack and slash, no indiscriminate chainsaw running here (even though that sounds like a lot of fun). To prune correctly you had to take the time and envision where you wanted the tree to grow.

Budgets are a lot like that. Think of all the categories as main branches and your income as the trunk. Each dollar grows off those branches and can be very useful producing a variety of different fruit. Sometimes though, a branch can start growing the wrong way and needs to be pruned and grafted onto a different main branch.

Recently my wife and I found several branches that needed pruning:

Branch # 1 – The cell phone plan

We love our cell phones! We love our social networking too (or at least I do). Problem is we were spending too much time checking our phones for the latest status update. For me it was becoming a very bad habit. When our internet at home went up after the promotion we were on expired, we knew we had to change some things around.

Our cell company, Koodo, here in Canada offers unique ways to change our details around, without getting into a longer contract. We analyzed our habits and decided that we needed to get a lower amount of minutes for both of us, with unlimited incoming calls, and unlimited texting. The data plans were cut because they weren’t necessary. We have WiFi in the house and in the majority of places we go; thus able to connect if we have to.

The result? We went from around 120 dollars a month to around 80 dollars a month. That is a savings of 40 dollars! Exactly what needed to be transplanted to the internet bill.

Branch # 2 – Car Insurance

I started thinking about the car I have and realized that it is decreasing in value. The deductible on the collision insurance I would pay would be just about the value of the car. I also could do without the car if I absolutely had to get rid of it (ie. Got in an accident that totaled the car). I made a call and took collision off.

Now I must caution you: This step is only if you are willing to pay for collision damage out of your own pocket, or if you don’t mind that you have a bumper missing, or something like that. It also depends on how good of a driver you are too.

Being the owner of this car means that I was willing to take the risk and save 30 dollars a month on car insurance.

Branch # 3 – Groceries

This branch is one that you have to look long and hard at. What kind of food do you buy? How much of it is junk food? What are items that can stretch longer during the month? How do you eat right on a small budget?

My wife has discovered the answer to a few of these questions for our little family. She sits down with her recipes and makes a monthly menu. Her first step is to take inventory of what we have on hand and try to incorporate that into the menu. Then she goes through her recipes and makes a menu that she breaks down into ingredients. Those ingredients are made into a shopping list. The initial shopping list for the month is a long one for most of the staples needed for most of the recipes. After the first list is made, she makes a weekly list for fruit, veggies and milk.

Our monthly menu looks similar to this menu.

I am very proud of my wife and the work she takes to trim the groceries branch. Last month she managed to trim 20 bucks off. We rolled that over into the next month so that we could buy an extra case of chicken and I imagine that we’ll keep rolling over the extra amounts for more of the on hand staples. However, I do foresee a month where we don’t have to buy a large amount of food and that’s where the savings will show up and be applied to another category.

Last Thoughts . . .

Cutting expenses is hard, but worth it. When the day comes and we are debt free, some of these categories will be funded to the max and we will have some wiggle room. Right now, though, we are intense on getting out of bondage and into financial freedom!

If you have recently pruned some categories, please share with us in the comments. We all can use suggestions!