Sure, there’s always household bills that a family can’t avoid such as housing costs, transportation, groceries, and other essentials. But there is also a whole other tier of household spending that can and should be trimmed, especially in this fickle economy.
The money saved should help:
1. Reduce your debt and
2. Build up a savings fund.
These two goals will put you in a better financial position for 2011.
Cutting your household spending starts with evaluating all your expenses and breaking them down into “wants” versus “needs.” Needs are the things your family absolutely must have to survive. Wants are things you would like to have, but really don’t need. Once all these household costs have been identified, figuring where to slash costs is easy.
What changes should you make to your family spending trends in 2011? The answer depends on your current debt and what you are willing to give up. If you need some ideas, here is how our family’s 2011 budget is measuring up:
Groceries cut by 40% from 2009. Last year, I started shopping aggressively at discount grocery stores plus expanded the size of our vegetable gardens to drop this household expense.
Apparel costs cut by 75%. “Use it up, wear it out” is our motto for 2011. For our teen daughter the fashionista, we shop the thrifts like the Harlem Salvation Army for her wardrobe needs.
Beauty Care dropped by 90%. Instead of buying department store beauty aids, we’re now shopping the dollar stores for name brand cosmetics and VO5 hair products.
Travel costs are down by 20% which has been attributed to carpooling and consolidating errands with CabCorner.
Vacation costs for 2011 are being trimmed by 75%. Instead of a road trip, we plan on staycations in and around Harlem this year for a low cost vacation.
Credit cards, medical bills, and credit line payments were eliminated from the budget since these were paid off in 2010.
Entertainment and dining out have also been eliminated from the budget. If we want to see a movie, we’ll raid the coin jar for matinee movies at the Magic Johnson theater.
Household repairs are back in the budget for 2011. Now that most of our consumer debt is paid off, we can afford to tackle home maintenance issues again.
Home decor & landscaping needs has been eliminated from the budget since they fall in the category of a “want” instead of a necessity.
Tutor payments are a new budget item for 2011. This family regards this as a “need”, we’re investing in a child and our future. With the money saved in other areas however, the goal is to get this debt paid off by summer.
Emergency savings fund. This is also a new budget item for our family. Like may other families, we are having to borrow instead of cash flowing emergencies as they come up. My goal is to have $5000 in this fund by the end of the year.
These are just a few examples of our household spending has changed to reflect the current state of the economy. Spend less, save more really is the key to weathering tough economic times both in this year and the years ahead.