Making more money isn’t the answer to your money problems.

Last week I wrote a post about the most important thing we did to dig ourselves out of financial trouble.

It was just one bullet point in the list of many, many things we did, but it was definitely at the top.

Once we did that, it helped us to see how we had been contributing to the problem, and it also helped us figure out what we needed to do next to change our situation.

Many people who are in debt or who can’t make enough money to cover all their expenses or who are living paycheck to paycheck will immediately think, “Okay, now that we actually know how much money we are spending every month, we need to find a way to make more money.”

That’s what we did.

Once we added up all our expenses, we realized we needed to make about $8800 a month to cover them all.

$8800 a month!

That’s a lot of fucking money!

We do live in Fairfield County, CT where the cost of living is extremely high. There are some other reasons why our monthly bills were so high. But there was still a whole lot of room for improvement.

And after coming to our senses, we realized that rather than killing ourselves trying to come up with ways to make more money, we needed to find ways to spend less.

So we took a good, hard look at every single thing we were spending money on, and we figured out where we could lower our expenses.

Here are some of the biggest ways we cut back:

1) I made a food budget and I started planning meals.

Before making a food budget, I  had no plan when I went to the grocery store. I bought whatever I wanted. I bought name brands and tried out recipes that had like a hundred ingredients in them, and if I didn’t have 95 of the ingredients, I’d buy all of them.

After making a food budget, I only bought stuff that was on sale, and I planned all our dinners around that. I stopped buying name brands. I use coupons when I can easily, but I don’t go crazy over this. I know exactly how much pretty much everything costs at every nearby grocery store. If I went on the Price is Right, I would kick some serious ass at that game where you have to guess that actual prices of stuff from the grocery store. Anyway, I don’t know how much I actually spent on groceries before we started making a budget for that. But I’d estimate I was spending about $500 a week on food. Now I spend about $ 250 a week. Sometimes it’s closer to $300 when I include things like laundry detergent and cleaning products and cat food and that kind of stuff.

But realistically I  cut about $200 off of our weekly grocery bill.

So that’s roughly $800/month I cut out. $9600 a year! ON FOOD! That reduced what we needed to make every month from $8800 to $8000.

2) We got rid of cable.

I never ever EVER thought I’d be able to survive without cable.

But now that we’ve been without it for about 2 years, we don’t miss it at all. We still have Netflix, and just about every show that’s on network and cable TV is on Netflix.

So I never really paid attention to our cable bill. We had about seven million channels. We had all the movie channels. At first I just got rid of the movie and other premium channels. This cut our cable bill by about $75. But it was still over $80 a month!

What the fuck!?

I had no idea we were even paying that much before I sat down and listed all our monthly expenses.

So a couple months after we downgraded the cable, we just got rid of it altogether.

That saved us another $150 a month, or $1800/year!

Now our expenses were down to $7850 a month.

3) We switched cell phone carriers.

We were paying $350/month to Verizon for four phones.

That’s a lot of money.

So we switched to Republic Wireless.

We’ve been with Republic for about two years now, and I have to say I don’t miss Verizon at all. The reception is basically the same.  The phones are just as nice. And the plans are much less expensive.

We did stop paying for the older kids’ cell phones (the youngest five don’t have phones).

Our cell phone bill went from $350/month to $90/month!

That’s a savings of $260 a month, or $3160 a year.

What. The fuck.

I felt really stupid when I realized that one.

So now we needed to bring in $7,590 a month.

4) We switched automobile insurance carriers.

I felt stupid for not doing this one sooner, too.

This is a pretty easy thing to do. It just takes making a couple phone calls or doing a little research online. We cut about $100/month off of our insurance bill.

Now were were down to needing to make $7,490/month.

5) We turned the heat down.

We have oil heat and we live in a very old house that is not exactly energy efficient.

But we also used to keep the heat set at about 68-70° during the day (and not much lower at night).

We were spending a ridiculous amount of money on oil deliveries. (We also switched oil companies and stopped getting regularly scheduled deliveries and only got oil when we called and ordered a delivery. And yes, there were several times we ran out of oil because we forgot to check the level of the oil tank. But we are getting better at this).

Anyway, we turned the heat down to 60° at night, and the highest it went during the day was 64°.  That reduced our oil bill for the year by approximately $2000!

So that’s only over the winter, but for simplicity, we’ll say that’s another $150/month we cut off of our expenses.

That brings us down to $7,440 a month.

That’s still a big chunk of change. But with those changes, we had managed to cut our monthly expenses down from $8,800 to $7,440 a month.

That’s $1,560 less each month.

That’s $18,720 a year!

We were unnecessarily spending close to $20,000 a year.

Wow. If we had made those changes five years earlier, that would have saved us $100,000.

Ugh.

I guess some people have to learn the hard way.

So we had cut down the amount of money we needed to make each year by almost $20,000 just by making those five changes.

There was more we had to do, but that would take some bigger changes.

If you are hemorrhaging money, take a look at where you can spend less.

It takes much less energy than trying to figure out how you can make more!