Monday, November 17, 2014

Is it possible to cut my budget by $25K a year?


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While browsing Pintrest I came across this question.  Is it possible to live off of $25K a year post on mommy savers.  It is a great discussion and I recommend checking it out.  So is it?  Well of course, I am sure that someone, somewhere lives on $25,000 a year, but to make it more personal.  Is is possible for MY family to live on $25,000 a year?  My family lives on roughly $50,000 a year, if we were able to live on 25,000 a year, that means we could SAVE $25,000 a year, which is very appealing to me.  First I had to take a look at our budget.


Current Monthly Budget:
Personal Loan - $850
Phone - $200
Electricity - $157
Water & Sewer - $40
Waste removal - $103
Pest - $70
Vehicle Payment $320
Insurance - $144
Fuel - $240
Home Insurance - $318
Life Insurance -  $46
Groceries - $600
Farm Animal Feed - $400
Medical - $208
Massage Envey - $60
Hair Color - $15
Proactive - $30
Netflix - $9
Dance Class - $100
HSLDA - $10
Credit Card - $100
Taxes - $159
Tithe - $400
Dues - $35

Total - $4614 (Monthly) $55,368 yearly.

This total is actually OVER $172 monthly, from what we bring in. That translates to $2,064 a year, and doesn't include the times we would eat out when we really shouldn't.  WHOA!  How did this happen?  When I sat down and really looked at the WHOLE budget, I was surprised how many things we did not have written down that added up VERY quickly.  We had about $600 worth of  things that were not written down.

Obviously somethings need to be cut.  The first thing I did was look at the areas that I can cut.


Fuel - This bill is currently $60.00 a week or $240 a month.  Our goal is to cut this in HALF to $120 a month, or $30.00 a week.  This will require me to cut down on my driving, which will be difficult.
Groceries - This bill is currently $600 a month or $150 a week.  The goal is to cut this back by $200 and feed a family of 5 for $400 a month or $100 a week.
Medical - We have a $2,500 deductible.  So to avoid a pinch, we should set aside $208 a month, so the full $2,500 is there when we need it.  While this is very important, we will have to temporarily cut this while we work our debt snowball, which will free up the money to allow a medical emergency fund.
Massage - I am a member at a massage envy. I pay roughly $60 a month, this was my special treat & will be cut to $0.  I am not in contract currently so this will be an easy one to cut.
Dance Class - Our son takes a hip hop class, is is $100 a month, there will be a post that goes in to greater detail on on decision on this, but this is an area where we have some wiggle room.
Credit Card - We currently have a credit card payment of $100 a month, our goal is to cut this to $0.
Tithe - We have decided to tithe on the amount we are living off of.

So is it possible for MY family to live off of $25,000 a year?  No, not currently.  I think with time and a lot of work it could be possible.  But it is possible for my family to cut our bills by $13,056.

Here is our Budget Goal for January:
Personal Loan - $850
Phone - $200
Electricity - $157
Water & Sewer - $40
Waste removal - $103
Pest - $70
Vehicle Payment $320
Insurance - $144
Fuel - $120
Home Insurance - $318
Life Insurance -  $46
Groceries - $400
Farm Animal Feed - $200
Hair Color - $15
Proactive - $30
Netflix - $9
Dance Class - $100
HSLDA - $10
Taxes - $159
Tithe - $300
Dues - $35

Total - $3,626
Why not start in December?
We decided to do a "soft start" in December.  In December we will be asking our self the following questions:
Can we cut our driving in half, thus cutting our gas bill in half?
Can I cut the animal feed bill in half?
Can we really eat on $400 a month?

Join in.  Are you interested in cutting your annual budget, or have you?  I would love to hear in the comments.

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