One of the easiest and quickest ways to save money may be sitting right in front of you and you just don’t know it. In an effort to cut our spending, I have been studying the smallest details of our monthly budget. I am going through the process of looking at each recurring expense and trying to find ways to save money.

If I were to give one piece of financial advice for anyone looking to save money, I would suggest doing the same. I have been able to find small pockets of money that my family can save each month without making any drastic changes to our current lifestyle. While I have not found a lot of savings in any one place, I have been able to find several small savings that are starting to add up.

I have already been able to save money by cutting out snacking at work, checking our monthly credit card statement for recurring expenses, and switching from diet coke to ice tea. The latest target expense I have been looking at is our cell phone bill.

Lowering Our Monthly Cell Phone Bill

After reviewing several months’ worth of statements, I came to the easy conclusion that my wife and I were paying too much for our cell phone plan. We had a cell phone plan that gave us 700 minutes per month on top of free nighttime and weekend minutes. We also had free minutes when placing calls to in-network customers, so we could call our family members with the same provider at no additional charge.

As I analyzed the number of minutes we used each month, it was clear to me that we never came close to 700. In fact, we hadn’t even used half of our allotted monthly minutes in the past 12 months. This seemed like a huge waste of money and a place that I could possibly find some additional savings for our budget.

I first checked the website of our cell provider to review available plans to find a better deal for us. As I suspected, the 700 minute rate was their lowest advertised monthly plan found on the company website. I then called and spoke with a customer service representative and immediately asked them what their absolute lowest minute plan they offered. The lady put me on hold for a few minutes and came back and said they could offer us a 550 minute plan for $10 less per month.

While I was a bit skeptical that our cell provider still may have an even lower plan, I decided to switch over to the 550 minute plan and take the $10 monthly savings. This small savings on our monthly cell phone bill will be used to help us save 10% of our income.

Monthly Savings – $10

I also wanted to point out that we are currently taking advantage of a 17% employee discount through our cell phone provider. If you don’t want to completely cut your cell phone, then you may be able to save some money each month through this type of discount. Check with your employer to see if they offer a discount for your provider as a way to save money.

Final Thoughts

Some extreme savers could argue that we should just cut our cell phones completely and in many ways I don’t disagree. My wife and I have given this option a lot of thought and consideration but are not totally ready to abandon our cell phones. The security of having them in emergency situations means more to us at this point than the cost savings.

I know that there are other options, such as prepaid cell phones that can help give us the security we are looking for. I think that overtime we will probably make the switch to this option, but not before we have the time to explore the benefits.

Switching our monthly cell phone plan will save us $120 per year, but completely cutting our cell phones could save us well over $700 per year! While we have taken a small step to help save more money, the potential savings on this expense will need to be revisited in time.

What tips can you provide to help cut your cell phone bill?

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Virtually every personal finance article that you read about saving money will point out the cost benefits of bringing your lunch to work. Packing your lunch is one of the quickest and simplest ways to save money, and is the reason it shows up on many of these published lists. A person spending $5 to $10 per day on lunch can quickly realize they are blowing over a hundred dollars every month just from eating lunch.

It doesn’t take a genius to realize that the annual savings just from cutting this expense can run in the thousands of dollars. Add in a spouse who may eat out for lunch from time to time and there is the potential for a family to save several thousand dollars every year just from cutting back on this expense.

Even if you already brown bag it, there may be other ways to save money on expenses while at work or in commute. How much does that morning coffee run you on the way to work? Even if it only costs $1, it is still much cheaper to brew your own. How about that afternoon snack or soft drink from the vending machine? Again, even spending a $1 every day can really add up overtime.

Why I Bring My Lunch to Work

I have always recognized the cost savings and health benefits of bringing my own lunch to work. In the past, I would occasionally go out to eat with my colleagues and witness just how much money a person typically spends on lunch. I would estimate my coworkers spend $8 to $12 per day on lunch.

Using a conservative calculation, I figure I could easily spend $1,600 per year if I joined them every day. While there are several benefits of going out to eat with your colleagues, the cost savings to me are more significant. This is just one of the ways that my family can live comfortably on a single income.

Saving Money at the Vending Machine

Even though I have always been diligent about not spending money going out to eat for lunch, there was always one expense I could never seem to shake while at work. For many years I had a bad habit of visiting the vending machine each afternoon for a small snack or soft drink. For some reason I felt that spending a dollar or two everyday on snacks seemed okay, as long as I wasn’t spending $10 on lunch.

It wasn’t until I started revisiting our family budget a few weeks ago that I truly realized how much I was spending each month at the vending machine. On average, I spent about $40 to $50 a month on afternoon snacks and beverages so I could get through the rest of the day at work. That is around $500 per year in wasted expenses that were helping to hold us back from becoming financially independent.

Final Thoughts

I have been snack free at work now for two months and am going strong. At first it was a little difficult fighting off the afternoon cravings for a diet soft drink from the vending machines, but after awhile I got use to not having one. As I look back, I think it was more of a behavioral issue than anything. As each day went by, I became less and less tempted to head down the hallway to pick up a snack.

Estimated Monthly Savings – $40 (conservative)

Cutting out expenses like eating out for lunch, morning coffee, and vending machine trips takes a little self sacrifice, but is not very difficult. As my wife and I try to save 10% of our income, I welcome that we could immediately save at least $40 per month just from cutting out snacks from the budget. This expense was quick and mostly painless and will help our overall goals of saving more of our income.

What examples can you provide as ways to save money that are quick and painless?

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The Family Budget
June 2008 has come to a close and the family budget has made it through one more month in the green! This is the second month that we have used the family budget. We spent $259.36 less than budgeted for the month of June compared to $142.37 less than budgeted for the prior month (May – 2008). That is an increase of 82% in savings between June and May (2008). There are several highlights from the current budget review and as always a few concerns for the coming months.

HIGHLIGHTS

• Gas – We did a very good job on our Gas budget for the month considering the never ending rise in oil prices. Our monthly budget is $200 for two vehicles. I was able to stretch out only one fill up during the month in my car, so we came in at $151.49 which was a 17% decrease in expenses compared to the month of May. I attribute this cost savings in part to some of the measures that we have taken to reduce our gas consumption.
• Energy Costs – I am continually amazed at how well we have been managing our energy costs, specifically our electricity usage. We have a 3,300 square foot house that I was terrified about paying the utility bills on back in February (2008) when we closed. My wife and I have made it a goal to manage our natural gas, electricity and water usage. The main highlight of the energy costs is the electric bill coming in at $40.41! Considering the extreme heat we saw in mid-June I am extremely please with the results.

CONCERNS

• Gas Prices – While we did reduce our gas consumption for the month along with our expenses, I am still concerned about gas prices in the next few months. We did increase our Gas Expense Fund up to $65.82 which should help to offset future increases. Unfortunately, I will need to fill up my car twice this month and won’t be able to stretch it out as I did in June.
• Groceries & Entertainment – Once again we outspent our budget in this category. I have been including gift purchases in this category, along with food and entertainment expenses so that is the reason for going over budget. We incurred some birthday gift and baptism gift expenses during June which accounted for the increase. The main focus for July will be to bring down our grocery expenses to meet the budget.

June 2008 – Budget Review

Final Thoughts
Overall it was an excellent month for the budget and I can already see the rewards of monitoring it closely. As stated earlier, we spent $259.36 less than what was budgeted. Of that savings, $191.45 was put into “Expense Funds” for those particular accounts to use for future expenses. The remaining $67.91 has been put into our ‘Investments & Savings’ category and will be used for a future stock purchase. In the future, anytime we are under budget, the funds will be added to this category.

How do you keep track of your weekly/monthly finances? Do you have a budget setup to track your cash flow?

Originally posted 2008-07-02 07:10:41. Republished by Blog Post Promoter

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Refinancing a mortgage on your home can provide several benefits to your personal finances. If the current rates are lower than your existing mortgage, then there could be a possibility that you can get a lower monthly house payment. In some cases, a homeowner can save a couple hundred dollars each month on principal and interest just from taking out a new loan at a lower rate.

Another huge advantage of refinancing a mortgage is the total cost savings over the course of a loan. For example, if you are planning on living in the home that is being refinanced on a 30 year fixed rate, then you could probably save hundreds of thousands of dollars in interest over the entire loan. Even though the benefits are spread out over 30 years, it is hard to pass up a deal like saving a $100,000!

While the potential savings from a refinance of your mortgage can save a ton of money, there are several factors to keep in mind. Even as interest rates remain very low, banks are not as willing to lend as they once were. This is why it is important to do your research before speaking with a lender if you are considering refinancing a mortgage.

Considering Refinancing a Mortgage?

My wife and I are exploring refinancing a mortgage on our current home. As I have found out over the past couple of weeks is that it is a lot harder now than it was even 5 years ago to refinance your mortgage.

I recently went through the hassle of calling around from lender to lender asking about their current rates. Based on some of the questions I got from lenders, I figured it would be good to share. Here are 8 tips that I have been using as my wife and I look at refinancing a mortgage on our current home.

1. Current Mortgage Rate

An existing homeowner should know their current mortgage interest rate they are paying. More than likely, this will be one of the first questions a lender will ask you when speaking with them about refinancing. If you don’t know what your current rate is, then you need to call your current lender and find out.

You should also know what type of mortgage you have? Are you paying a fixed or variable rate? Is your mortgage a 30 year, 15 year, or adjustable rate mortgage (ARM)? All of these questions should be easy to answer and will be necessary to determine if you should refinance or not.

2. Remaining Principal

What is the remaining principal left to pay on your current mortgage? Chances are this will be the amount that you will probably refinance, give or take a few thousand dollars. Some homeowners choose to roll any closing costs, or origination fees back into the refinance, so the new loan amount may be higher.

Since your existing principal should be decreasing every month, it is important to keep up on your remaining balance before talking with a new lender. Most mortgage lenders offer online access so that you can quickly check your existing balance along with your current interest rate.

3. Estimated Value of Your Home

This can be a tough one for many homeowners, especially in a bad economy like the one we are in now. Probably every lender you talk to about refinancing a mortgage will ask you to estimate the current value of your home. This question is important for both the homeowner and lender to ensure that you still have 20% equity in your home.

As housing pricing continue to decline, so does the equity that a homeowner has. In many cases, homeowners are finding out that just because they originally put 20% down on their mortgage doesn’t mean that they have the same equity in today’s market.

There are a few options for those who no longer have 20% in their home to refinance, but they are limited. The homeowner could choose to pay PMI (private mortgage insurance), which is required on a loan with less than 20% equity. A check could also be written to the new lender to make up for the shortfall in the amount of equity.

Ultimately the choice is up to the homeowner in what steps to take. In some cases, a refinance may actually cost you a lot more money even with a lower interest rate.

4. Have an Idea of Your Credit Score

You should have a decent idea of your credit history and score. Even if you don’t know your exact score, you should have some clue if your credit is poor, fair, good, or excellent. Mortgage lenders will offer much better rates on a refinance to those who have good and excellent credit.

If you are planning on refinancing and receive a interest rate quote, be sure to ask what credit score is required for such a rate. A lender may not always provide this information up front, which can lead to issues further down the line.

5. Number of Payments Remaining

How many payments do you have remaining on your existing loan? Again, this data should be readily available through your current lender. Depending on your current mortgage and the number of remaining payments, it may make sense to switch to a different type of loan. For example, those who have paid off several years on a 30 year fixed may want to consider switching to a 15 year fixed to get a better rate.

Another important thing to remember is if you decided to keep the same type of mortgage, then you will actually be adding more time and payments back on to your loan. For example, if you have paid off 5 years on a 30 year fixed and refinance for the same terms, you will go from 25 years remaining back to 30. While the total principal and interest paid on the new loan may be a lot less, it will take you longer to pay it off.

6. Ask About Fees and Points

Closing costs, origination fees, appraisal fees, etc. can sometimes be the deciding factor when it comes to refinancing. One of the most important questions you can ask is for the lender to explain all associated fees involved with refinancing a mortgage. Depending on the lender, homeowners can expect these costs to run from a couple hundred dollars to several thousand.

Also ask the lender about points that may be added into the quoted mortgage rate. Certain times, lenders may try and sell you on a rate which has points tied to it. This will ultimately cost you a lot more at closing.

7. Run the Calculations

Since you already need to know your remaining principal on your existing mortgage, why not run a few what-if scenarios with current interest rates. There are plenty of free sites like Bankrate.com that provide quick and easy calculators that can help you figure out if refinancing is even an option.

Since I am a visual person, I prefer to run several mortgage calculations using worst and best case scenarios. I have found that it is easier to speak with a mortgage representative if I have already done my homework and know what I am talking about.

8. Research & Ask Questions

Did you know that most banks will not refinance an existing mortgage if your home was up for sale in the past 6 months? My wife and I tried to sell our home so we could move closer to family. Unfortunately as the economy continues to struggle, it is extremely difficult to sell a home. As a result, we threw in the towel and have decided to stay long term.

Now we are finding out that most lenders won’t touch a refinance on our home because it was recently taken off the market. As I spend the time calling around to various mortgage lenders, it is the very first question I ask. It saves me a lot of time and hassle talking over details with a lender only to find out they can’t refinance our home.

As a side note, it seems that about 25% of the lenders I have contacted will offer a refinance once the home has been off the market for one day. The other 75% seem to require the six month threshold.

Have you thought about refinancing a mortgage at all recently? What tips can you provide to those homeowners consider a refinance?

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Using a credit card rewards program can be an effective and easy way to earn extra money each year. Depending on your usage and spending, a diligent card holder can earn several hundred dollars every year in redeemed gift cards are prizes. As long as you remain committed to paying off your balance each month and can avoid over spending on items you don’t need, there are few downsides to these programs.

I wanted to touch on an important point however that sometimes gets forgotten when it comes to credit card use. Even if you stick to your monthly budget when using your credit cards and payoff the balance each month, you still could be losing money. When was the last time you actually sat down and reviewed each expense on your statement?

Taking the time to review your credit card statement each month is just as important as paying off your balance. As you will read below, I learned the hard way.

Check Your Monthly Credit Card Statements

Over a year ago I signed up for a coupon rewards program that offered free products and discounts for signing up. The first month for this service was free and then cost $10 per month thereafter. My intentions at the time were to sign up and get the free rewards and then cancel at the end of the first month.

About 12 months after signing up for this program, I began to monitor my credit card statements more closely. While my wife and I have kept a decent handle on our spending and pay off our balance every month, we only casually reviewed our monthly statements. We usually just took less than a minute to scan the charges to make sure nobody had gotten a hold of our card.

It wasn’t until I started to review each line item and compare multiple months of statements that I realized I had never canceled the coupon service. I had been charged an extra $10 each month for a service that I never used. While $10 per month may seem like a small amount of money, the $120 we lost in the 12 months time made us take notice.

Saving More Money

The point of this story is to not get lazy when it comes to your personal finances. I had gotten complacent about always checking every expenditure on our credit card statements. It wasn’t until we looked at exactly what we were spending on the card to make us realize we needed to fill a hole in our finances of $120 per year.

We have since canceled the coupon service and no longer will be billed the $10 fee each month. As my wife and I work towards saving 10% of our income, it is important to pay attention to the small details of our finances. The more of these small expenditures that we can find, the easier it will be to save $400 per month (or 10% of our current income).

Monthly Savings – $10

I encourage everyone reading this to start taking their finances seriously. Even if you think that you are always on top of your spending, double and even triple check your statements. Start with your checking and savings accounts. Then move on to your monthly credit card bills. You may be surprised at how much you can save just by eliminating wasted expenses like the one I just mentioned.

Have you ever discovered wasted expenses like I just mentioned by reviewing your statements?

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