How did it go last week? Were you able to identify where your money goes each month? Specifically, do you now know your gross and net monthly income amounts? And, do you know how much you spend each month on fixed, recurring monthly expenses and then what you have left for everything else?

I hope so. To those of you who shared your experiences after reading last week’s post, thank you. I’m glad it was eye-opening.

This week, I want to break down the fixed, recurring monthly expenses and the “everything else” amounts even further.

Step 1: Fixed, Recurring Monthly Expenses

Hopefully, you already have this list and the dollar amounts from your efforts last week. (If not, you can choose to catch up right now.) I want you to review each item on your list and ask yourself two questions:

  1. Does this expenditure align with my financial core?
  2. Is there a less expensive option?

Remember the values you spent time digging into last month? I want you to go back to those values and make sure HOW you spend your money is consistent with WHAT you TRULY VALUE.

Let me give you a couple of personal examples from going through this process myself not too long ago:

  • I spend more on rent each month than some less expensive living options, which have been offered to me. I choose this because my living situation is in most ways ideal for me (the key being for me – remember, we all have our own values and things that matter to us). I have respectful and VERY clean roommates (a clean house is HUGE for me). I have my own bedroom, bathroom, and storage space. We have a yard, deck, and grill – and I LOVE to be outside. I live between work and many of the social activities I am involved with. I have found the cost to be worth the benefits. For me, right now, this expense stays.
  • On the other hand, I don’t value watching TV so I don’t pay for cable.
  • I do value music and pay for a subscription to a streaming service. As more and more players enter the field (Spotify, iMusic, Tidal, etc.) I have tried them out. As part of my review of my fixed, recurring expenses I emailed my current music streaming provider and gave them some feedback and let them know I’ve been trying other services but hoped to stick with them. They emailed me back and gave me my next month free!
  • I also called my car insurance company recently to see if they could offer me a better deal. They confirmed I was receiving all of the benefits they could offer me, but at least I was able to confirm it. My next step should be to call a few other car insurance providers to shop around and compare prices.
  • Recently, my roommates and I had to change the name on our internet bill. During the process, my roommate asked if they could lower our price as the monthly cost recently went up…and they did. That’s the second time in the last 12 months we’ve been able to do that, saving us about $7/month each time. And if you think that doesn’t add up…investing that $7/month, assuming an 8% return, becomes $1,280 over ten years. If you can find $100 to save every month, that’s more than $18,000 saved over ten years. (We’ll get into this more later, but I want to emphasize now – yes, saving, even just a little, absolutely adds up.)

I hope this helps give you some framework for how to go through these expenses. I encourage you to confirm that the things you currently pay for align with your financial core. If they don’t, get rid of them. I also encourage you to spend a little time doing some research, even picking up the phone to confirm you aren’t missing any opportunities to save.

Step 2: Everything Else

I think the simplest way to review what you spend on everything else is to sign in to the accounts you use to spend money (your credit cards and debit cards) and review the purchases you made in October. It’s early November so this week is a great time to review where you spent money in October. Again, ask yourself these two questions in regards to each line item:

  1. Does this expenditure align with my financial core?
  2. Is there a less expensive option?

As one example, I’ve heard from many friends that they spend A LOT of money going out to eat with friends, resulting in excess dollars spent and calories consumed. If the purpose for the outing is quality time with friends, why not propose getting coffee, apple cider, or hot chocolate (especially as the temperatures cool)? You both spend less money, but still achieve the real reason for getting together. You could also propose a long walk, going to a museum, visiting an art exhibit, or any number of other less expensive but equally as rewarding options.

Remember, it’s about YOUR values. While I value paying for a music streaming service, you might not at all. Spend money on the things you value and not on the things you don’t. When we can honestly say to ourselves that we’re spending money on things we value and can afford, we shouldn’t have to stress about making the purchase. And doesn’t that sound nice?

Where did you find money to save? What expenses are you going to cut, or reduce, going forward? What did you decide is worth keeping?

Please let me know. I love hearing your stories.


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