Saving Money: Little Changes that Pay Off Big

Having more money available to you for what you need and want isn't all about making more money.  It's also not all about depriving yourself of every small luxury in life.  Sometimes finding more money is all about making little changes and sticking with them.

Find Out: Where is Your Money Going?

This part is pretty easy if you have an account online. When I need to track my spending more closely, I spend thirty days making all of my purchases with my debit card. This way, I can see every purchase listed on my online account. If you don't like online banking or using debit cards, you can alternately do this task by saving every receipt in a given month, using your check register, and tracking every cash purchase.

At the end of the thirty days, get a pad of post-it notes, and look back at the last 30 days. Label them with spending categories. Consider the following labels:

  • Home
  • Car
  • Groceries
  • Credit Cards/Debt
  • Insurance
  • Phones
  • Business Expenses
  • Restaurants/Eating Out
  • Entertainment
  • Wardrobe
  • Personal Care
  • Incidentals

Once you have your categories labeled, you can arrange them on your desk or dining table horizontally. Write a new sticky note for each expenditure, including the amount spent and the type of items bought. Then place them under one of your categories. This will give you a very real and visual idea of where your money is going.

Find Out: Where are You Overpaying?

Using the sticky note activity previously mentioned, you can also track where you overspend. One way to do this is to tally a total at the bottom of each column. Another method is the good, old-fashioned pie chart. Microsoft Office software will even create these for you when you use a chart, but you can also try paper and markers!

Sometimes families find out the unexpected when they do this, such as that they spend several hundred dollars a month eating out. The majority of your money should be going to your housing, your transportation, and your utilities. If a large percentage of your money goes to debt or entertainment, then you know you have some choices to make.

Creating a Budget

There are many ways to create and maintain a budget. Many people feel most comfortable writing it all down on paper. If you think a paper budget might be for you, consider some pre-existing budgeting forms, such as the Dave Ramsey Quickie Budget and Monthly Cash Flow Plan.

Personally, my husband and I like to use an Excel spreadsheet to log our cash flow. We enjoy Excel because as long as we create the formula properly, the cell will calculate totals for us automatically. We also like it because it gives us the option to highlight or change text colors in order to categorize our spending, and because we can keep track of our spending for a whole year or more while not having to maintain a lot of paper files.

Whichever budget form you choose, the most important thing is to create the spending plan with others in your household, such as your spouse, and to stick to it. It is also important to re-evaluate your budget at the end of the month and see where you departed from it. Try to figure out why you diverged from the plan and decide whether you need to change next month's budget accordingly. It may be that you overspent for the month because you were, for example, Christmas shopping, and you'll have no need to change your January budget because your December budget went over. However, you may find that you are consistently underestimating something, such as, for example, your expenditures on fuel.

Cutting Down on Unnecessaries

It's hard to know where you can cut costs sometimes, since many bill amounts are fixed or dependent on necessary usage, like your utilities. Contact your utilities companies for information on how to save money on your gas and electric bills. Reassess your insurance to see if you're paying the right amount. You can do this by using online calculators like the one at If you have obvious over-expenditures, such as a huge monthly clothing or entertainment budget, try cutting it in half for the next month and reassess at the end of the month.

When you have all your bills sitting in front of you, see where you might be doubling up. One good idea is to have your pay stub in front of you, too, so you can see what auto-deductions you have. I found out, for example, that I was paying deductions toward a long-term disability coverage that wouldn't really help me, since my employers' union also offers this coverage as part of my dues.

Another expenditure we cut out was the big home phone bill. When we first did that, however, we found ourselves more than making up for our savings in cell phone fees from going over our minutes, not to mention the frustration of dropped calls in our own home. Our final solution was the Magic Jack, which is a great deal at only $20 a year. It even lets us access our home phones elsewhere through our iPhones and iPods.

One place you can always save is on your grocery bill. I use sales and coupons to cut my bill in half each month, and sometimes to one-third. Read on.

Shopping Sales

Shopping sales isn't just a good suggestion; If you want to save money, it's a must. Even when you buy items on sale, the stores are still making a profit from your purchase, so there's no reason to feel guilty. To best take advantage of sales shopping, you need to get to know the annual sales cycles. Once you know the sales cycles, you'll know when the best prices are for each item, and therefore, when to shop. I find the article "Sales Cycles: How to be a Coupon Psychic," (The Krazy Coupon Lady) to be very informative. Buy multiples when you find a really good deal, but no more than you'd use in about 3 months. Most products-- even things like deodorant-- have a shelf-life, and buying products you won't use isn't saving you any money.

To know when the stores near you are having a sale, all you need to do is purchase a Sunday paper. You don't even need to have it delivered weekly on subscription, although I do. Many of my fellow couponers and sales-shoppers purchase the Sunday paper on Saturdays at the local dollar store, which saves them money off the shelf-price of the paper while also giving them coupons vital information about what's on sale an entire day early.

Many extreme couponers have helpful websites which categorize national and local deals by store. The Krazy Coupon Lady, for example, allows you to shop by store, listing each of the stores she tracks and the coupon deals for the week. You still need to get a newspaper to have access to the coupons, but this way you don't need to read through every sale circular and figure out the pricing yourself.

Planning Ahead

I like to use a meal plan to plan my family's meals. I first look through the grocery circulars in the Sunday paper and find out what meats and produce are on sale. Then I decide what to make using those ingredients. After that, I copy the ingredients for each recipe into my deal journal (yes, I have a deal journal), and use that as the beginning of my grocery list. Since I visit between one and three grocery stores each week for smaller purchases based on the sales, my grocery list is often divided up into separate stores, but that's not strictly necessary. I can also just cross things off the list at each store. Coming in armed with a list means I'm much less likely to leave with too much. I also separate my coupons into an envelope for that store before going in so that I don't have to dig for them when I get up to the cash register. Planning ahead in this way means that I don't create meal plans involving everything that's regular-priced this week, and it also means that I don't end up having to buy something at the last minute at full price.

Pay in Cash

You know how your Great-Aunt Lucy used to get all of her spending money in cash at the beginning of the month and separate it into envelopes for each type of spending (an envelope for the grocery store, one for the gas station, etc.)? Well, it turns out that paying in cash may still be the best way to spend your money. New studies show that the psychological effect of cash versus credit can actually cause you to spend more when you're spending with plastic. You're even more likely to view whatever it is you're buying in a positive light if you're buying it with plastic, whereas you're more likely to see the cost disadvantages if you're paying in cash. Not to mention that many large purchases can be discounted for those paying in cash. Even merchants of non-big-ticket items may get in on the cash discounts game as you see sellers attempt to avoid fees from credit card companies. A 2010 federal law even allows retailers to reject credit card purchases under $10 and offer special discounts to those paying in cash.

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Comments 2 comments

Amy 4 years ago

Excellent. Good info and I like the links you have here to the additional resources. We like Excel too. I actually have learned to enjoy the process of budgeting and seeing if we can meet our goals each month!

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renyou 4 years ago

Paying in cash is of great help in saving money, this hub is really helpful in budgeting and saving money.

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