Budget Lesson, Part 5

I’ve explained my budget in some detail already.  See these posts for the history of this series.

Now, I’m going to go through each section, reviewing ways that I can reduce, or have reduced, my spending.  I’ll be starting with my monthly payments.

• House Payment – I’ve mentioned that we have a small house payment.    A few years ago, when the interest rates dropped to almost the lowest point they reached in that particular cycle, we refinanced and got in under 5%.   There is nothing to cut.  We won’t refinance again, and the loan will be paid within 7 years, according to the lender’s schedule.  I’m aiming for 4 years.
• Netflix – We’re on the 2 DVD/unlimited plan for $13.99.  We could drop down to the single DVD plan, but I’m worried that will trigger a rash of movie-buying.  2-at-a-time scratches that itch well.  I don’t think we’ll be reducing this plan in the foreseeable future.
• Cell Phone – We recently doubled our contract price to get smartphones.  I’ve got a hundred rationalizations for the cost, but it wasn’t a cheap decision.  With the phones we have, we could drop the data plan, and just rely on wifi for the internet features.  I’d be covered at work and home, while saving $30-40 per month.
• Dish   – We recently called and asked to have our bill lowered.  We were planning to cancel, but our contract isn’t up until December.   So, to save the $10-per-month penalty, we are paying $40 for our package.  That’s some bad math.   As soon as I can convince my wife the fee won’t hurt, we’re done with the Dish.
• Cable Internet  – While many people consider high-speed internet a luxury, I consider it a necessary expense.  I am a computer programmer, and I try to maintain a regular side-hustle or two.  I regularly use this to maintain current income and generate alternate income streams.  I need to find some time to call and ask for a lower price.
• Car Payment  – My loan is scheduled to be paid off in 18 months, but I think I can trim it to under 12.  Then we start saving for our next car, which will be paid for in cash.  No more car loans.  In the meantime, there’s no way to reduce the payments.
• Insurance  – We have the multi-line/multi-policy discounts.  It’s been a while since I’ve checked, but nobody comes close to the price for what we have.  I am appropriately insured.  Our deductibles are on the high side, but within our emergency fund, which saves quite a bit on the monthly cost.  I don’t think this can come down much without leaving us unde-rinsured.
• Personal Line of Credit  – This is my snowball target.  It is currently sitting at about$5000 and will be gone by spring, I think.
• Credit Card  – We’ve got a decent rate:  9.99% for life.  The CARD act screwed us on the payment amount and the original transfer rate.   I can’t wait until this one is gone, but it will be a couple of years, yet.  Until balance transfer rates recover the CARD Act Travesty, this can’t come down, except for making payments.  Transfers are unlikely to improve the overall cost.[ad name=”inlineleft”]
• Gas(Home)  – We put in a new furnace and central A/C, cutting this bill in half.  The return-on-investment there is a bit under 10 years, which made it a good plan.   We have an appliance repair plan that I’ve considered dropping, but won’t.  Our sewer main is covered on the plan.  We have a tree that keeps growing into the main.  This plan pays for itself just in getting that cleaned out every year.   I took the tree out this summer, but the roots will still grow for a couple of years.
• Allowance    – This won’t go down, and will surely go up as my son gets more ambitious and my daughters get old enough to want spending money.
• Electric   – Shut off the lights!   I’ve got this trimmed.  The video game setup all gets shut off with a power strip and most of our house is on dimmer switches.   They save electricity, but eliminate the idea of using hazardous waste CFLs.
• Debt  – We won’t lower this one until the debt is gone.  The higher the better.  This is the amount, over and above the minimum payments, that we pay to our debt.  Effective debt reduction will not get reduced.  The savings from every other category get moved to this bucket.
• Phone  – The only further reduction possible is elimination, which won’t happen.  As long as my kids may possible spend time at home alone, we will have a land line.
• Savings  – As the debt goes down, we will be adding to this one a bit.  Until the debt is gone, this will never be a huge amount, but it will always be something.  Another entry to grow, instead of shrink.
• College fund   – See [Savings].

Every time we contact any of these organizations, we ask to have our bill lowered.  Usually, they cut the price for a few months for us.  Unfortunately, I’m not very good at remembering to do that often enough.  Time to add that to my calendar.  From now on, I will be calling to get my bills reduced quarterly.

Update:  This post has been included in the Carnival of Debt Reduction.