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Supposing, for some reason, you discovered that you had to immediately reduce your household budget by 10%. What are the ongoing expenses that you would cut? This has to be things that you would actually do without -- no fair re-scheduling loan payments or reducing your savings input.
1bd apartment for ~$700 instead of the 3bd house I'm in. Only saves $250 on rent, but then utilities would be about $200 cheaper as well, so that's $450.
The choices are limited to the expenses that don't have contracts.
So... no moving (lease) and no car loan changes either... at least not right off.
That leaves discretionary items: meals out, prepared foods, entertainment, etc.
Maybe juggling unsecured loans or forsaking some savings...
Finding an extra bit of income will probably work better than all these.
10%....drive less, eat less, eat in, price match everything at wal-mart, quit tobacco, quit drinking anything but water, get an evening job at a restaurant where a shift meal is free, cut the cable, cut the internet, go to the library, quit the gym membership, sell the cars with payments, pay cash for a jalopy, lower the coverage amounts on your insurance, quit using credit cards, decrease what you contribute to your 401k, do a paycheck audit and disenroll from all the gimmicks "benefits" that you will never use...there is a reason these items are so cheap. Dump the smart phone, get a prepaid cellular, have a huge garage sale, pay off debt, work harder at work, get a promotion/raise.
Supposing, for some reason, you discovered that you had to immediately reduce your household budget by 10%. What are the ongoing expenses that you would cut? This has to be things that you would actually do without -- no fair re-scheduling loan payments or reducing your savings input.
Nothing. We live well within our means and a 50% reduction would still be easily absorbed.
Nothing. We live well within our means and a 50% reduction would still be easily absorbed.
I believe the OP's question is: how would you absorb it? If you can absorbs 50% reduction without cutting any expenses, that would be a sign of fairly poor finance management.
Supposing, for some reason, you discovered that you had to immediately reduce your household budget by 10%. What are the ongoing expenses that you would cut? This has to be things that you would actually do without -- no fair re-scheduling loan payments or reducing your savings input.
I just recently went through this exercise, and have successfully cut my spending probably by about 5%, but i didn't try very hard
one of my larger monthly expenses is gas. I've been using gasbuddy to find cheaper stations. I just found one that is on average about 25 cents less per gallon, combined with driving more carefully, i've cut about 5% of my gas budget - but this could easily fluctuate higher. the other thing we're trying to do is shop smarter. i would completely eliminate eating out, which would cut about another 2% from my total, but figure half that would be replaced by new grocery spending. I just did a rough calculation and i could cut 5.5% of my budget almost immediately by:
cutting down on driving to reduce gas by 5%
cancel netflix
cancel beer-of-the-month club
eliminate eating out
brown bag it 5 days a week instead of 3-4
eliminate occasional housekeeping/cleaning lady visits
the rest of my budget is pretty tight. I could knock another 1.2% out by cancelling cable/internet/phone - but i'm not sure i'd be too content with no internet, and keeping just internet would be almost the same as keeping my entire package (i work for the company so get a decent discount)
the biggest place i could cut is if i got insanely frugal, and unhealthy, with my grocery shopping. lol
It's a lot tougher than it sounds. I have four kids and a wife who stays home. Every dollar is allocated. We rarely eat out. Most of our money is spent on necessities: mortgage, utilities, gas, food, insurance, taxes.
I could cut kids' activities, cable, two Roth IRAs, 401(k), Education IRAs.
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