Top 5 Areas to Cut Your Expenses

So we could look for ways to increase our income outside of teaching through the use of side hustles or summer jobs, but in this post, we are going to look at the other side of the equation. So what areas can we cut our costs?

1. Housing - When we look at where we can cut costs, we want to start with the biggest areas first because they will have the biggest impact. Housing is most people's biggest expense each month. It can also be difficult to change due to family situations. If you are able, you could look into smaller houses or apartments to lower your rent or mortgage. You could also look into renting out a room on your property if you are comfortable with that. This would be a great option for a younger teacher that could rent to another teacher in their district. We were not able to change our housing expense at all. With a wife and two teenage girls, we were definitely not comfortable renting out a room in our house. The TA, on the other hand, was able to rent out a room to one of his friends. This is a great financial move for him!
2. Cable/Internet - This is another area that can be a huge expense each month. Before our cost cutting moves, we were paying $150/month to Dish Network for our cable alone. I looked at our list of channels and cut our bill down to $100/month! I then called last month to say that I felt we were still paying a little too much and they lowered our bill down to $70/month for being a loyal customer. This is something that everyone can do. EVERYTHING is negotiable! Companies spent incredible amounts of money to attract new customers. They claim that those "specials" are only for new customers, but if you call, and calmly discuss the fact that you have been a loyal customer for many years, they will pass you along the chain until you reach the customer retention department. They are the ones that have the power to authorize these "special" rates. Ramit Sethi in his book, I Will Teach You to be Rich, has scripts that he uses to help you negotiate lower rates on everything from cable to car insurance. Very useful tools! I know, I know... There are many different options for TV online, such as Netflix, Hulu, etc. We haven't quite gotten to that point yet. If you live in a large city, you also have a variety of options for your internet service and speed. Living in rural Minnesota, we are stuck with our current ISP. If you have the options, this can be an area to cut a good amount of money.
3. Groceries/Food/Dining Out - This area can vary drastically from person to person. If you are young and single like the T.A., your grocery bill is probably fairly low, but your dining out bill might be sky high (damn parmesan-garlic wings)! My grocery bill dwarfs his each month, and with two teenage girls, my dining out bill probably isn't far off of his. Really, the only way to cut this area is to track your spending each month. A tool like YNAB (You Need A Budget) is a great tool to use to track these expenses. A quick way of saving money in this area is to eat at home more often. This can be a very easy change, but many times, change can be difficult. Even with a laser focus, we have had a difficult time trying to cut our costs in this area. It is SOOO convenient to stop at a fast food place or a restaurant instead of eating at home. You actually have to stop, think, and plan your spending!
4. Cell Phone - This is a huge area of expense for a lot of people. In our family of four, our plan with Verizon was a whopping $250/month. This is a huge kick in the ass for your budget. I looked into it a little bit and noticed we were paying insurance on our phones that were already paid off! I went online to our account and removed that insurance and immediately knocked $25/month off of our bill. Super easy! I have also looked into doing Verizon pre-paid as I've heard that it is sometimes up to 50% off your bill. I haven't been able to take that step. There are also other plans out there likeStraight Talk, Republic Wireless, Google FI, among others. I will not speak directly to these yet since I have not had any experience with them. Once our kids are off our plan, I will definitely look into these other options to cut costs even more!
5. Insurance - Insurance, or "in case shit happens", is really a necessary evil. Think about all of the different kinds of insurance that we have. Health, life, auto, home, dental, umbrella, that's quite a list! Now, not everyone has to carry all that insurance. We won't cover which of these insurances you should or shouldn't carry, but we do want to look at how you can cut costs. The first step is to look at how much coverage you have. You could save money by raising your deductible on your health or auto insurance. This will save you some money, but the bigger savings will come from shopping around. The longer you stay with the same insurer, the more they will automatically raise your rates. I learned this firsthand last year when I shopped around for new auto insurance. I had been with the same national agency for my entire driving life (almost 30 years). I knew my agent very well and could talk with him whenever I needed. I sat down with him to see if I could lower my costs. He punched some numbers, but there wasn't much he could do. The computer just kept spitting back the same premiums. I visited with a couple other insurance agents, and I was shocked at the difference. See the numbers below to how much we saved.

I couldn't believe it. I cut my monthly cost in half AND doubled the amount of coverage I had. I wish I had shopped around for insurance years ago. Think of how many hundreds, if not thousands, of dollars I had lost over the years. It was incredible! Definitely shop around for your insurance. Now, things like healthcare might be tied to your employer, so you might not have the option of shopping around with different carriers, but if you can, DO IT!

There ya go. Five HUGE areas that you can cut a great deal of expenses to allow yourself more money to put to work for you! Don't tell yourself that it can't be done! Get out there and try. I didn't think it was possible either, but it is. You just have to make the effort! Now get to work and...

Keep Stackin!