Although many articles focus on the recession and how you should react to it in your personal behavior, I think that many of the topics being discussed are relevant regardless of economic conditions. I decided to make a short study of what one might cut and what wouldn’t make sense to cut. It’s amazing to me to think of some of the things that are cut in the budget of the average person.
What NOT to cut:
- Nutrition. If you want to cut your food budget, stop eating out in restaurants. When cutting your food budget there is a tendency to switch to the worst cuts of meat and the cheapest foods. Your health is so valuable. Good foods can still be purchased on a budget. Buy a bag of frozen chicken breasts, cans of albacore tuna, and of course you can buy healthy pastas on a budget as well. I recently saw a bag of a dozen apples for $2.29. Do cut the junk food lunches at fast food restaurants and frivolous food spending on peripheral snack items. Good breads can be purchased at the bread maker’s discount store. We buy great Orowheat breads all the time at our local bread outlet store. We have some friends in Anthem, AZ outside of Phoenix and they recently had to make a decision about drinking water. Their city’s drinking water is very bad. They made the decision to continue purchasing drinking water.
- Vitamin supplements. If you feel better when taking vitamins and supplements – keep buying them. My husband takes a fish oil tablet and a niacin tablet and doesn’t feel right unless he has them.
- Insurance – Health, Auto, and Life. If you have assets to protect, by all means maintain the proper limits of liability coverage on your auto insurance. Don’t be tempted to reduce your limits. If you are the breadwinner for your family, don’t cancel your life insurance. Also, don’t be tempted to go into high deductible health insurance plans unless you have significant personal savings. It’s so tempting to go with lesser insurance plans when you see that you might save $50-$100 per month. However, consider the cost you could ultimately pay for going with a bargain basement insurance plan.
- Exercise. If you absolutely must cancel a gym membership, make plans immediately to put together some sort of home routine and this may require a small investment in a few DVDs, a mat, and some small weights. Your health will suffer if you’ve been going to the gym for a long time and then suddenly quit altogether. I would recommend cutting cable or satellite TV before cutting your health club membership.
- Home Air Quality. Don’t buy the cheap filters for your furnace or air conditioning unit. Spending just a few extra dollars keeps your air clean and helps your furnace or air conditioner to run efficiently.
- Automotive Maintenance. Changing your oil, air filter, or other wear items helps your vehicle to run efficiently and safely. Don’t put off a brake job. Your safety is at stake. Don’t avoid rotating your tires – it could result in your tires wearing out more rapidly.
- Land Line Phone. This is probably a big surprise since most people think it’s just a waste of money if you’re carrying a cell phone. Nobody calls you on it anyway, right? But, what about the emergency services 911 capability you lose when you cut a landline? Do you have children? If you must, call your phone company and tell them you don’t use your landline phone but want to keep the ability to make emergency outgoing calls to 911. Our local provider has a discounted plan for this type of customer.
- Employer Match Retirement Plans. This is a big mistake to cut if your employer is giving you free money in the form of a match. Your contributions are also pre-tax, so you reduce your taxable income. If you must cut this, only cut the amount of your contribution that isn’t matched by your employer.
What to Cut:
- Fast Food Lunches. Cut these immediately. It’s bad for you and also just flat out lazy. If you’re in an office environment and lunches are an essential part of business, figure out a way to do them only when necessary. On days when you can, just take your lunch.
- Cable or Satellite TV. This is one of the first things to cut. Either step down to a package of lesser cost or eliminate it altogether. $60 per month is $720 per year!
- Name Brand Foods. I’ve done taste tests on my family between Cheetos and the ALDI store brand and nobody could tell the difference. We just decided that at least half of what we’re eating could go away.
- Name Brand Cleansers and Detergents.
- Unnecessary Energy Spending. Slight adjustments to your home’s thermostat can result in big savings. Could you stand to sleep with your thermostat on 66 degrees instead of 72? My husband grew up with his parents putting the thermostat on 60 degrees at night.
- Traditional Light Bulbs. We’ve made the switch to Compact Fluorescents in every spot we possibly can. Maybe you might not want to put curly Q fluorescents in your living room or where you have guests and want nice warm lighting, but you could certainly use them in your garage or your closets. Be careful where you use them though – they can heat up if you have them on for a long time in an upside down setting. You may say that the initial cost is high, but your energy savings will be significant. These bulbs also last a long time. Compact flourescents are also now available for exterior lighting.
- Entertainment. Stop buying DVDs and CDs. Rent DVDs from kiosks like Redbox and download songs you like individually from Rhapsody or iTunes. Don’t go out to movies. Wait until the movie comes out on DVD.
- Transportation. Are you driving a newer car that is worth $25,000 and has a $384.00 loan payment? Maybe you could sell it and buy something more reasonable that has no payment. Is your $25,000 car really more reliable than a $8,000 car that is well maintained? Do you have somebody you could carpool with to work? Make a contact! Do you live in a city with efficient and safe public transportation? Use it.
- Beauty and Style. Do you have a high maintenance hairstyle with coloring? Maybe you could go with something a little more basic. I used to have highlights but decided to move away from coloring my hair due to the cost. My husband has decided to go with simple clothing for work and avoid the fashion show.
- Expensive Coffee at Starbucks or other similar places.
- Spending Money at Vending Machines.
- Sodas and Candy
Tags: Budget Cuts, Recession Savings