4 Painless Changes to My Budget that Freed Up $104.82 per Month for Debt Reduction

piggy bank copySmall wins add up to big wins. A few times per month I ask myself: “I wonder how I could squeeze an extra hundred bucks out of the budget to throw at the debt?”

I’ll have ideas here and there, but other than the obvious stuff (dropping cable TV, getting a cheaper cell phone plan, riding my bike all over the place to save gas, eating out less), I rarely have a solid $100 plan come together in my mind.

For some reason a $100 plan came together at 4:45am today. Now, don’t get me wrong – I’m not trying to hype this all as cost-reduction: 60% of this plan was a reallocation. But I still call it a win because I shifted resources to my most important current financial goal (getting out of debt).

1. Canceled Netflix and Hulu Plus: $16.52 per month.

We haven’t watched Netflix in three weeks, and we can still veg out with shows on the networks’ websites, so why pay for these services? We’re wondering if it’s time to sell the TV and be done with it.

Side benefit: the less TV I watch, the earlier I go to bed, the better I feel.

2. Cut my automatic 401k contribution. $58.33 per month toward my highest interest debt.

YNAB makes an automatic contribution to my 401k, but it’s not a matching program. Because I can’t earn the automatic 100% “ROI” from an employer match, it makes more sense to apply the ~$60 per month that was going to the 401k to my highest interest loan (the residential lot at ~10%).

3. Contacted a new local internet provider about connecting to his service. $20 per month.

Apparently there’s a new internet reseller who’s setting up shop in my neighborhood and two others in our city. I have a couple neighbors already on the service, and they say it handles streaming fine for $30 per month. Saves me $20 and feels low risk given our reduced streaming habits.

4. Cut another $10 per month from my fuel budget.

Kate and I have targeted two areas where we can further reduce our car usage: I’ll ride our daughter to her preschool in the bike trailer, and we’ll be driving to the gym less often. Monthly gas savings will come in around 3-4 gallons, or $10 to $12 per month.

This change isn’t stricly about the money: I like the time on the bike and the opportunity to take my little girl to school. The money is a bonus.

Final score:

$16.52 + 58.33 + $20 + $10 = $104.85 per month.

It seems a little trite when people say “Every little bit counts,” but when you can make savings and adjustments to funnel an extra $100 per month to your big goal, it feels like a big win.

25 Responses to “4 Painless Changes to My Budget that Freed Up $104.82 per Month for Debt Reduction”

  1. Troy Heinritz

    Not sure how i feel about the cut to the 401K… since that money is pre-tax it holds a higher % value then you think because more dollars are working for you and compound faster over time vs just going out the door to pay down the debt, let alone hard earned money going to Uncle Sam. I don’t like debt either but 10% really isn’t bad considering and comparing to some cards out there are 22% + … I would try to restructure the debt first and see if you can get the interest lowered especially if you always pay on time.

    I can’t remember if you got rid of cable TV yet or not, but If not, I would drop that and Hulu and keep Netflix as the backup – that $8 a month goes a long with kids in the house! I can cut back my TV watching in favor of the local library which i will also ride my bike to.

    Also see how much you are spending in iTunes – (if you use it) do you have a budget category for that? We had to so we removed our credit card from the service and instead only purchase iTunes Gift cards to load up the account keeping us on track in our app / music / movie budget category.

  2. Carola

    Why pay for a gym? I took running and cancelled my gym, and recently I started a yoga teacher training that gets a tax refund so I can deepen my practice and do it on my own, I see it as a long term investment in our health, I’m teaching my husband and probably in the future I’ll teach to cover for any courses or classes that I want to attend. We’re moving to a co-op building that includes cable otherwise I would have cut that too, but I did cancel Netflix, and we watch all our movies from the library. We use a debit card that gives you points for movies, so we pay everything with the debit card and go to the movies for free, we just watch Rush and Gravity. We’re also changing the internet provider this month.

    In Sept I started using YNAB, faithfully reading this blog and reading mr.moneymustache (after Jesse interviewed him) and I’m impressed how I keep finding ways to save money, it’s totally shifting the way I see the world. It’s such a shame that I had YNAB since it was a spreadsheet, did all the upgrades and kept failing until this Sept, sometimes you just need a deep internal motivation to do something, we would have been financially so far, but well, better now than never.

    Thank you for your writing, your blog, and how you constantly challenge yourself, I’ll be so happy for you and your family when you’re out of debt :-)

    • mark

      Hi Carola –

      Thanks for the encouraging words. We weren’t paying cash for the gym membership – it was part of a trade I was doing with the gym owner. The reason we’ll be driving to the gym less is the owner has decided to stop all in-kind memberships. :)

      I’m with you – the world is looking more and more different to me as well. Glad you’re enjoying the blog!

  3. Matthew

    I tried lowering my 401k contributions and that put me in a different tax bracket and actually cost me. I made less contributing less, more went to taxes. Needless to say I am putting that amount back in the 401k and also taking more home…

      • CW

        That is what I was going to say. I always use a ROTH if I can afford anything because the long-term impact is no taxes on any gains. Even if I make less in the future, I have peace of mind knowing I don’t owe anything on what I withdraw in retirement.

        Also, I’m in favor of paying the debt before the 401(k). Again, the peace of mind frees you up to live more fully. And, the weight of debt is a hard burden to carry. We have carried debt on a vehicle and a house, precisely because the interest we were earning by keeping the money was more than the cost. But, the savings was very minor and really not worth my time and hassle to keep track of it and pay the monthly bill for the vehicle.

        Also, you have to look at whether you have an emergency savings and all that. It is an individual decision. If the debt wears you down, I say get it paid off.

  4. MGG

    Great suggestions with only a couple of caveats for my situation.

    I dropped Hulu a couple of months ago, but kept Netflix. At just $7.99/month, it made sense for me considering how much I love going to the movies, which is easily over $20/month. Not only that my husband and I are still trying to catch up on Breaking Bad. (Yes, we know the series is over.)

    We have debt, but our highest interest rate is 6.99% so I couldn’t justify lowering my 403(b) retirement contribution to pay off our debt.

  5. Alisha Moore

    Never auto Upgrade your Phone Always make them stew. If they think they are about to loose a long term customer they usually have a good customer plan that is hiding in the reserve pile that is 20 Dollars cheaper then the plan you are currently on

  6. Noah Vaile

    Well said. We might not find one big item to cut but lots of little ones add up. Often more painlessly. Cutting off the TV turned out to be easy. Without network “news” we are better informed.

    Got rid of Netflix. There are plenty of free movies and TV shows available via the internet. All we need, anyway. We do have Amazon Prime but that is because we realized we’d save the ~$80/year in shipping costs and buying (some) things online saves both gas, time and sales tax.

    BTW- contact your congressman about the “Marketplace Fairness Act” which would require small online sellers to collect sales taxes based on wherever a customer lived and open those sellers to audit by out-of-state taxing agencies.

    We also watch our driving and plan our trips which adds up at 25c a mile. What does it cost you to drive someplace? Not just gas but oil, tires and general repairs and maintenance.

    Not every cut is for everyone but we can all find waste in our budgets and in our lives. Get lean by cutting yours.

    Thanks for the post.

    • Andrew

      While you might not have to pay sales tax in most states you are required to pay use tax on items you purchase from the Internet. A lot of people don’t realize that they are even required by law to do so.

      • Tuxgirl

        If you buy something from out of your state and this don’t pay sales tax at purchase time, you are required to report those purchases at the end of he year and pay tax on those items at that point.

  7. Jess_Esq.

    Hmmm.. this might be the final oomph that I need to cut Hulu+. We use Netflix every single day, but I cannot recall the last time we used Hulu…

    • Jesse

      Cut it now! Then add it back if you find out you miss it (you won’t miss it) :)

    • Mistrblank

      We were about to cut Hulu.. but then EVERY tv show started up a new season. We have a ton of new stuff to watch. The realization we made is that we probably only need it for 6 months, then we can probably cut it for 6 before starting back up in september.

      • ClearlyKrystal

        Hulu+ lets you put your account on suspension for 3 mos which just about times out with when the shows are all in rerun. I used to do this every summer to avoid paying for something I wasn’t using. I ended up cancelling Hulu+ altogether at the end of this last summer though since it’s (almost) as easy to watch shows on using free Hulu via laptop/monitor.

  8. Jeneba

    The story that really interest me here is…. how many of us have recently lost employer matching funds……

    This is part of an assault on assumptions I have been making about my overall level of wealth. I also have NO medical insurance unless I become seriously ill. At the same time we lost the 401K matching, the firm I work for switched to a high deductible plan. I am now on the hook for $2,865 of medical insurance. And the gym reimbursement, which used to pay for $600 a year of my gym fees, is now subject to that high deductible. I also pay for these “benefits” every month, which we never had to do in the entire time I have worked at this place – over 20 years. And the final insult: I have been told that I am now at the top of my “pay grade,” which I have NEVER heard of before….

    Meanwhile, the firm is making HUGE amounts of money and is highly profitable….

    I am going to have to look at my budget to see what I can cut out of my “bloated” lifestyle. But the people who own the firm, keep buying additional homes and new cars and sending their kids to private schools….

    I no longer believe in “Fairness.”

    But thank you YNAB, for introducing me to others who are struggling and who are taking measures to stay in control of all of these disappointing trends in American life.

  9. Alexandrina Yong

    I think what is interesting about what was shared in this blog is that the story shared here can be easily related to the current situation where having a budget is so important due to the unemployment rate. Even though, I am a student, this has thought me a lot on managing my budget.

  10. networthwarrior

    In the Warrior household, we will be cutting the satellite really soon. We finally got Aereo in our area and have a Roku for whatever else we want to buy movie or tv show wise. Can’t wait to save over $70/month.

    The Warrior

  11. Kenneth

    Mark, you are changing before our very eyes! You’ve made a lot of impressive changes. The best part about paying off debt, is not only do you save interest charges, but you finally put to rest the principal payments (minimum or debt snowball level). When you’re done, there is a lot more money that is YOURS to do with as you please, and you are no longer a debt slave.

  12. Susan C.

    Mark, Go for it. Get rid of the TV. I haven’t had a TV since 1993, and even didn’t have a home computer or Internet until 2000. But, the TV – yes, there are many other things you can do to spend your time on. You can use a DVD for vegging purposes – don’t even have to look at the entire thing. Just about 30 minutes worth to re-energize. You’d be surprised how much time you have left in your day without the TV, and what you can do with those hours.

  13. oddbah

    Here is how I save money….. 1) TV antenna, no cable 2) jailbroken Apple TV with XMBC 3) keep tech gadgets and laptop until they actually break 4) I use one credit card for everything I buy including food and gas… no cash and no debit card… when I see that big amount which represents all my expenses I feel like I have shopped a lot and spent a lot and somehow it keeps me from buying things I don’t need…I get cash back rewards plus my credit score is now above 800 because I pay it back every month… I only use one credit card even though I have others 5) I save toward specific things…somehow saving toward a roof or a laptop 3 years down the road seems more motivating than savings for unknown emergencies… I keep life simple so I do not have much room for emergencies besides car and medical and vet bills 6) Due to YNAB I have saved more in the last 6 months making $35,000 a year than I did when I made over $95,000 a year… I was doubtful that YNAB would help but it has

  14. oddbah

    OH, one last thing… I think of budgeting as political action or protest. If I do not spend much money and more people spend less money… well corporations are going to make less money… they have already fired everyone they can… so maybe they will have to start acting like decent human beings with customer service and products that work and warranties that mean something… it is so hard to make money and keep it that I am very careful about who I give it to and I try to buy at small mom and pop store even if it does cost more than Walmart

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