How To Increase The Margin In Your Budget Even More!

If you’ve made it here after reading Part 1, Part 2, and Part 3 of this series on budgeting, then chances are you are feeling inspired to take the next stride with your household budget. You’ve seen the success of the LaFleur family and how in Part 2 they more than doubled the monthly margin in their budget. Then, in Part 3, they put that margin to work and increased their savings, investments, and giving while eliminating their debt.

I’ll show you how the LaFleur family found that first $450 in monthly savings at the end of this post. Before getting to that, though, I’ll share some of my favorite ways that a typical household can easily create even more margin in their monthly budget.

Where To Find Margin In Your Budget

The old adage of ‘a penny saved is a penny earned’ will be in full effect for this post. Of course, making more money by adding a part-time job or side hustle will give you more margin, too, but the list below is likely a much easier place to start:

Reduce Bills

Negotiate With Your Utility Providers

If you haven’t tried negotiating your cable, internet, and cell phone bill then do yourself a favor and give it a try as soon as possible. Generally, the more competition there is in a market the more likely a company is to cut you a deal. Therefore, you’ll have more luck with cable, internet, and cell phone companies, where there are lots of providers, than you will with, say, your electric and gas company.

Most cable, internet, and cell phone companies have entire teams devoted to ‘customer retention’, or something of similar nomenclature. This team is likely the ones that are empowered to offer you a significant discount. Typically, the most straightforward path is to call the main customer service line with the intention to cancel your service. You’ll usually get routed to a representative that will discuss options to lower your bill, sometimes as much as 50% or more! These offers are often time-bound and promotional, so make sure to mark your calendar and call back again when your deal is set to expire.

Canceling might be a good option if you aren’t presented with any suitable alternatives by your provider. Nowadays, there are a lot of quality low-cost options like Sling TV, CenturyLink (that is rapidly increasing its fiber-optic service) and Republic Wireless.

Negotiate With Your Credit Card Company

Carrying a balance on a credit card is universally considered among the worst of all debts, mainly due to the ultra-high rates of borrowing. If you are wallowing in credit card debt, consider calling your credit card company and negotiating. The worst they can say is no. At best, they can reduce your interest rate or even partially forgive some of the balance.

There are companies that exist to help you navigate and negotiate this process, but be sure to read the fine print closely. Additionally, those with above average credit could consider transferring their balance to a card with more favorable terms.

Shop For Insurance

Perhaps 15 minutes can save you 15% or more? You won’t know unless you take the time to get quotes and compare rates. Be careful to check coverage closely and make sure you are comparing “apples to apples.”

Refinance A Loan

Check the rates you are paying on each of your loans, especially home, auto, and student loans. Then, shop around and see if refinancing is a good option. You’ll need to factor in any applicable closing costs. Beyond that, you’re mostly looking for a more favorable interest rate.

As of 2018, the US had $1.5 trillion in outstanding student loan debt. No wonder refinancing student loan debt is now a big business. Refinancing to a lower interest rate on your student loan can be a great thing. If you hold federal loans, just be very careful to consider the benefits uniquely offered by the government that disappear if you move to a private lender.

Tweak Your Lifestyle

Plan Your Meals

Most families I work with admit that they throw out a lot of uneaten food each year. That’s unfortunate for environmental reasons as well as your own finances. Take time to plot out your meals each week and stick to your plan. Your grocery bill will thank you.

Shop At A Discount Chain Like Aldi

I’m a big fan of Aldi. You’ll see why when you read my past blog post about saving 44% on my grocery bill. They are also continually increasing their selection of fresh and organic foods, so sacrificing quality and healthy eating is a diminishing concern.

Cut Out Or Reduce Excessive Habits

Cutting that daily latté out of your budget is the cliché budget fixer. That’s probably because it holds some truth. Fewer coffees, happy hours, or shopping sprees can only help your budget, and might even help your health, too.

If this sounds too hard, consider fasting from it for a set period of time. Use that time to bring God into that area of your life. Examine that area and consider whether it might be an idol in your life. Talk to God and determine what healthy moderation looks like going forward.

Around The House

Cancel Unused Memberships

If your life is enriched by going to the gym, reading a newspaper, or listening to Spotify, then, by all means, keep your membership. However, if that last sentence brought you conviction, then you may have some obvious low hanging fruit to remove from your monthly budget.

Use Your Programmable Thermostat

This one won’t change your financial world, but it’s so easy to do that it merits a listing here. It takes less than five minutes to set your programmable thermostat each season. Set it so that your furnace and air conditioner don’t need to work so hard while nobody’s even in the house. If you can stand it, lower the temperature a few degrees in the winter even when you’re home and throw on a sweater. You’ll save a little each month and also extend the life of your HVAC system.

Back To The LaFleur Family

So, how did the LaFleur family cut $450 out of their monthly budget?

$140 from Groceries – planning meals and shopping at Aldi makes this plenty feasible. Some months they are able to save even more.

$85 from Cable/Internet/Cell Phone bills – The family cut cable and now uses Sling TV, which is only $25/month. It’s also a la carte, meaning they can cancel for the warm months and encourage themselves to find more entertainment outside. They also negotiated down their cell phone and internet bills.

$55 from Meals Out – This was effectively making a decision to, once a month, cook a nice dinner at home instead of going out to a fancy restaurant.

$50 from Mortgage – The family saw that they were still paying primary mortgage insurance (PMI) on the house that they bought 5 years ago. That’s because they opted to put 10% down instead of the 20% required to avoid PMI. They talked to their lender, paid a one-time fee for an appraisal, and proved they now had more than 20% equity in their home. This allowed them to remove PMI from their monthly mortgage payment.

$50 from Clothing – After talking and praying together, the couple discovered that having expensive clothing was no longer something they valued highly. They were reminded of how many times they donated clothes they’d hardly worn.

They realized that shopping for clothes was largely a function of opportunity. They were constantly going to malls for fine dining, movies, or specifically to shop. They decided to do less of all of this, stay away from the stores, and instead, do two big shopping trips to outlet stores each year – once in the spring and once in the fall.

$40 from Gym Memberships – Not wanting to cut out their access to a health club, they instead decided to double down and each commit to going at least 12 times per month. This qualified them for $20 each in incentive payments from their health insurance company. As added motivation, they agreed that if they missed their check-in goal 2 months in a row they would cancel their membership altogether.

$35 from Auto & Home Insurance – The family shopped around and compared rates. They found a competitor that was willing to offer the same coverage with a lower premium.

What About Your Household Budget?

This concludes my four-part series on surviving financially in an uncertain world by focusing on what you can control. Part 1 discussed how to establish a starting point by figuring out your current spending patterns. Part 2 outlined how to set a budget and free up additional cash each month. Part 3 addressed how to put that cash to work for the betterment of your financial future. Today, we explored some ways to reduce your monthly expenses even further.

I hope this has inspired you to revisit your household’s budget and given you practical tips on how to do so. It can be hard, but you don’t have to do it alone. As a financial advisor, I can coach you through the process and help you develop a strategy that maximizes the opportunities available to you.

The LaFleurs are thrilled to be on track to reach their financial goals faster than they dreamed possible. If they can do it, you can do it too!

About Guide Financial Planning

Guide Financial Planning (formerly Wacek Financial Planning) is led by founder Ben Wacek, who is a Christian fee-only Certified Financial Planner™ and Certified Kingdom Advisor®. He has a passion to help people of all income levels make wise financial decisions and steward their resources from an eternal perspective using Biblical principles. Based in Minneapolis, MN, he works with clients both locally and virtually throughout the country and abroad. You can follow the links to learn more about Guide Financial Planning and our team and the services we offer.