Focus on Bigger Savings First

There is a school of thought out there that says that being too frugal is not necessarily a good thing.  One of the main limitations is that it tends to divert your attention from the bigger picture.  That bigger view should include the priorities of saving and making money, but the focus should begin on the large items first then followed by the smaller “dollar-chasing” that will bring even more savings.

Look at your budget where you have the largest outlays of money.  Here you will find some areas where you can save in chunks.  We’re talking about anything over $20 per month because if you can string together five of these items then you will have an extra $100 to use elsewhere in your budget every month.

The ‘bigger’ list:

·         Cable television.  Most of us have too many channels and that adds a lot to the monthly cable bill.  If you have over $90 per month in cable charges, then you should consider dropping some channels in order to realize a significant amount of savings.

·         Cell phones.  It is not uncommon for every family member (with exception of small children and the dog) to have a cell phone these days.  While the safety and ‘connectedness’ is great, it can eat up money better spent elsewhere.  If you have a family plan that has allowed you to add phones for $10 per month and you have multiple phones, consider letting a few of them go.  What you can do is have a ‘common’ cell phone that can be passed around to those who are going out and need to stay in touch.  Yes, that means less personalization, but that is one thing that just might have to take a backseat to saving money right now.  If you cannot give up the extra cell phones, then look at the extra services for which you are paying monthly fees.  Internet access, unlimited downloads for music and video files are really unnecessary and cell phone companies are making a killing on them.

·         Land lines.  Make your cell phones your primary communication devices and get rid of the phone at home.  Most people can save anywhere from $30 to $50 with this tip alone.  And, with a responsible number of cell phones in the family, you can make this happen.

·         Eating out.  Just for fun, keep a log of each time you eat out every week for a whole month, and then add up that money.  Now, consider how much you can save if you buy food from the grocery store and eat at home instead.  The reality is that it is still less expensive to buy and prepare your own food than it is to eat at a restaurant.  Even if you use coupons or special offers at restaurants, this still holds true, because you can use manufacturer coupons and in-store specials at the grocery store to extend your savings there even above the money you will spend at a restaurant.

·         Insurance deductibles.  Look at your deductibles on your vehicles and your home and see how much you can save each month by increasing the deductibles.  If you combine both of these together, you can save enough money to qualify to be on this ‘big list.’

·         Extra vehicles.  If you own multiple cars (and who doesn’t in our society), then consider getting rid of one if it makes sense.  Even if you have a paid off vehicle, you be able to save money alone on the monthly insurance, gas and maintenance that you are spending right now.  Consider car pooling to work.  Look at purchasing a bicycle to ride during good weather months to and from work.  Even a scooter can help you get places on roads that are not conducive to bike traffic.  Be sure, however, to pay cash for a scooter, and do not finance it or use a credit card for the purchase.

You might be able to come up with other items that are unique to your situation which can add to your savings in this manner every month.

If you combine this strategy with increasing your income by making more money from other sources, you will see a big swing from not having enough money every month, to being able to pay your bills and beginning to get out of debt, too.  With a plan in hand and some good old fashioned hard work, you can make this happen.