I caught up with Sam this week, and she raised an interesting concept. She had done an exercise on budgeting to see how much she and her husband, Paul, could save if they excluded the non essential items from their shopping list or budget. That is, if the times got really rough, what could she exclude to cut costs?
What she did was create a simple Excel file that contained a list of all her outgoings, and annualised the cost of each item beside it. Then she had a column to say whether the item was critical or not, and one last column with a simple formula that summed the cost if it was critical. She told me that she and Paul could save over $13,000 a year just by cutting out all the non essential items from their spending. Things like the internet, or entertainment etc.. Amazing. Granted, her budget included things like not using the 2nd car, so registration and insurance were some big ticket items in her list. Still, that’s a lot of money to save per year.
So, as much of a budgeting freak and geek that I’ve become, I started the same thing. Just at work here about 15 minutes ago with things that I could think of, and I’ve already managed to cut out over $2,000 from my budget if things got tough, and that doesn’t include my entertainment budget or cutting back on anything really critical yet either. This is going to be one interesting exercise, and possibly a great lesson as we start to feel the effects of the economic crisis. It’s also become much more important to me now that I have a mortgage as well, and as much as I can still splurge at this stage, I don’t really want to. I'll start thinking what it is I spend my money on over the coming days, and give an update when I've finished this exercise.
I actually have no idea if anyone even reads this blog anymore - but food for thought on those who do?
No comments:
Post a Comment