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With some families seeing their bills grow faster than their income, finding ways to build the difference between the two has become a priority for them.
I've written quite a few times about how we've worked to optimize our budget and how we trimmed expenses to help build our savings and invest more.
The $1,000 Challenge
If you want to grow that gap between what you make and what you keep, I have a fantastic book for you to check out – The $1,000 Challenge.
It's a great read from Brian J. O'Connor who is a columnist for The Detroit News.
A couple of years ago he and his family wanted to put themselves on better financial footing.
He created a challenge where he made a goal of reducing his family's expenses by a grand.
It wasn't easy at times, but he did succeed.
Save $1,000 on Your Bills as a Family
I loved following along as Brian honestly appraised his progress (or lack of it) week by week, looking for ways to save without sacrificing quality of life.
Here are a few of y favorite highlights from the book.
- Don't be intimidated. Brian told me that one lesson that he hoped that people would take away from his book is how anybody can do this. Not all families can cut their expenses $1,000, but we all work on our finances one bite at a time. Have a goal and try to dig as deep as you can. So what if you don't meet it? At least you've saved some money rather than not even bothering to try.
- Weigh the time versus results when deciding where to start. Going for the low hanging fruit that can give you some big ways is incredibly motivating. No one wants to feel that their efforts are for nothing so take a minute to look at your monthly expenses and see where you can get a big win upfront. O'Connor knew he could probably get a big win with refinancing his mortgage, but the process would take some time, so his first goal was to slash their transportation expenses.
- Review your cell phone to see if you can find a better fit for how you use it. Do you still have that expensive plan that you got years ago? It may save you a ton of money to make sure that it's still a good deal.
- Review your recurring expenses. Even if you did sign up for something, it doesn't mean you have to keep it. Perhaps that gym membership should be cancelled since you haven't used in the last couple of years or you discovered that you no longer need a golf magazine subscription because you're now into tennis.
- Get rid of junk. Brian also managed to simplify and reduce his expenses by getting rid of the stuff that was in their storage unit.
Not every couple has the same income or expenses, but I found Brian's way to tackling their finances incredibly motivating.
His humor throughout the book made it easy to follow. Sometimes finances can be so dry and boring and that can make it even harder to optimize expenses.
Working as a Couple to Save $1,000
After finishing the book, I was curious to find out how onboard Brian's wife was with the $1,000 challenge.
I know that sometimes you don't always see eye to eye.
I had the great pleasure of chatting with Brian last week to help me get a better idea of how he and his wife tackled the challenge.
He admitted to me that his wife wasn't sure that they could cut $1,000 from their expenses.
She also had some family bills that she didn't want to completely cut out but she was willing to see what he could find and was supportive of his efforts.
Since he handled the bulk of the day to day finances, it made it easier to let him handle the phone calls and number crunching (while still keeping her in the loop).
We also discussed how to approach something like this when you and your spouse may have differing views.
He suggested making it easy and risk-free for the reluctant partner. Start with an area where you both agree needs to be trimmed. Then nibble around some of the other bills.
You may not get to cut back as much as you had hoped, but at least you got some wins with your spouse's support. That approach may pave the way for larger projects in the future.
Since he finished the challenge, I asked him if there were any habits or expenses he went back to or if they were able to keep the cuts over the years.
He said that most of the changes stuck, mainly due to the fact that they slashed their recurring expenses.
So just as setting up automatic deposits can help you save and invest, so can optimizing your regular monthly bills. You spend some time upfront, but the results last for awhile.
He also conceded that their grocery bills fluctuated based on how attentive they were.
Need Help with Lowering Your Bills?
I love Brian's tips, but sometimes time can be a barrier to saving money.
If you two are struggling to take care of the negotiating in between your day to day routine, here are some tools and apps that can make things easier.
- Trim: With Trim, you can cancel subscriptions and negotiate your bills.
- Billshark: They contact your service providers and negotiate the best price on your behalf.
- Paribus: Bought something and a week later the price drops? Paribus can get you back the difference.
With these services, a fraction of the money you save pays for service.
So while it’s not technically free, it’s money you would’ve spent anyway so it could be a smart move for really busy couples.
Thoughts on Saving $1,000 on Your Bills
Have the two of you ever done a big-money challenge like Brian? How successful were you?