Weekend meal prep instead of meal planning
(Homemade) pizza night

Debt Reduction: Tweaking the budget

Inspired to push ourselves a little further in our quest to become debt free, we've revisited our budget again to make some changes. This really highlights the fact that a budget is a living document.

Starting on March 1 we implemented our new budget, which we affectionately refer to as our "Austerity Budget". (This is just a family joke, we are fully aware that our budget still affords many, many luxuries and is actually far from austere.)

Current Budget | www.risingshining.com

Highlights of our latest household budget include:

+ Overall streamlined accounting by combining our bank accounts.

+ Chris put his gym membership on hold. Savings = $40/month
He's been loving the family CrossFit workouts and biking.

+ We switched car insurance companies. Savings = $70/month
We switched to Progressive for our car and home insurance.  

+ Cutting entertainment spending to $75/month per person (down from $200/person). Savings = $250
This is significant. We used to essentially buy what we wanted. We aren't huge spenders but I wouldn't worry much about an occasional $100+ Target trip for non-essentials or about one-click ordering a book from Amazon. Now we're forcing ourselves to really evaluate what we want to spend our money on beyond bills and household essentials. I'll admit that we are not hitting this target budget goal. It's not necessarily that we've bought non-essentials but we don't have line items for gifts and clothes for Dashiell and so this comes from our personal spending money. Perhaps we should evaluate saving for these items separately.

+ No more Netflix. Savings = $8/month
While this was a small bill, it was a service we were rarely using so we decided we'd rather save the money. We are still able to get television shows and movies through iTunes via our Apple TV (I wrote about being cable-free here) but we are only watching about an hour of television a week lately so we've haven't missed Netflix.

+ Cancelled Chris's AT&T service and chose an MVNO. Savings = $47
MVNO stands for "mobile virtual network operator" and there are several operating. Chris is pioneering this alternative cell phone plan for Team Wharton. He cancelled his AT&T plan, had his iPhone unlocked, and started a plan with 35 Or Less, which operates on the T-Mobile network. If Chris is happy with the service (it's only been a week) then we'll also eventually switch my phone, too. It was a pain of a process to switch Chris's service because we incurred a contract cancallation fee from AT&T (which we expected) and had to fight to get Chris's phone unlocked. It certainly did not leaving us with lovey-dovey feelings for AT&T.

35 Or Less is no longer taking new residential customers although they assured us that I will be able to sign up if we like the service, so we'll see how it all works out. I'll give an update in a few months on how it's going. So far Chris has better service inside our house than he had with AT&T so that's a plus. 

Total monthly savings: $415

To note:

+ The line item for "Kelsey's business costs" include services I'm using for my blog, podcast and e-course. I hadn't included this as a line item before.

+ Chris's summer savings goes towards summer bills since Chris is only on a nine-month teaching contract and is not paid during the summer. So far, every summer he's earned extra money by teaching summer classes and continuing research projects but we never count on this money. Therefore, his summer savings is not included in our total monthly savings sum since it's very short term savings and will be used for bills within the year.

+ We have created an "extra savings/debt reduction line item", woo hoo! And we have also increased our allocations to our IRA accounts. However, these line items are flexible. For example, we're currently replenishing our savings after some house expenses instead of making the full contributions to debt and our IRAs.

+ Our monthly contribution to Dashiell's college savings is small. However, our focus right now is debt reduction, which will ultimately give us more room in the budget to save and pay for Dashiell's college tuition.

+ We still have a little bit of cushion built in to our budget as you'll see that our monthly bills and savings don't equal our monthly income.

As always, you can download a spreadsheet version of our budget to use for yourself. And I'm always happy to answer questions about our budget.