How to rearrange your wallet (Feng Shui Part 2)

In addition to our possessions, we have also been Feng Shui-ing our budget.  As our family grows and our real income doesn't, we have to adjust our budget and re-prioritize our spending.  

BTW, here's a previous post of how we created our budget in the first place and another on money saving tips. 

Here we go!  Like Feng Shuing your possessions, there are some simple questions you need to ask when adjusting your budget:

Do you really need it?

• Cable TV - We cancelled this back in 2004.  At first, we filled the gap with NetFlix then over time we found even that expense was unnecessary.  We have found that most shows are available for free through internet streaming (including major sports like football, commercial free). With NetFlix, Hulu, Amazon.com, etc, Cable TV is an unnecessary expense anymore and once you're past the initial adjustment, you'll never miss it, trust us.  If you're not sure, most providers will let you put your cable on "vacation" for a few months at a minimal charge, so you can try living without before you commit.
• Home Phone - This is an expense we finally got rid of this month.  In the age of cell phones, it's really unnecessary also.  I have to admit I was leary of living without a home phone.  My solution was the same as cable, first put our phone on "vacation" for two months.  At the end of the two month period, we were comfortable we did not need a land line.  We realized we could even send e-faxes via our cell phones. We certainly don't miss all the tele-marketing calls.
• Gym memberships - My husband has found working out at home much more effective for his physical fitness, granted it took him some time to come up with right routine.  He mainly does planks (straight and side), push-ups and of course rides his bike for cardio.  Plus besides saving money, think of all the germs you'll avoid too.

Is that the best product at the best price?

• Price Shop - Each year its a good idea to review all your contracted costs and shop around to make sure you're getting the best deal, both financial and in services provided.  Insurance (home, car, life) and anything else with annual fees should be evaluated.  We found some services we decided we could live without and some we could cut back on.  It takes some effort but I feel it is part of good stewardship.
• AAA - This is an item I realized with effort can pay for itself each year, if you just remember to use the card for discounts.  I'm amazed now that I started asking, who gives AAA discounts, not just travel related retailers.  If you go to their site, you can get a comprehensive list.
• Banking - We canceled our accounts with a mainstream bank and went back to our credit union because of the fees.  I also realized I can make more money on my money in the bank by grouping it differently and following program rules, like making sure to make three online transactions each month to get higher interest.  In making these changes, not only did we eliminate fees, we are now making a little on what we have in the bank.  Every little bit counts!
• Credit Cards - Ideally you don't want these, but if you must make sure you making the most out of them, capitalizing on points and minimizing fees and interest rates.  I find by charging everything to our American Express, the points that build up more than pay for the annual fee.  The other reasons I use the American Express are safety (They believe the card holder when disputes come up and make the vendor prove otherwise.  Plus it keeps the money in my bank safe from fraud.) and temptation (since it has to be paid off each month, I'm never tempted to get into debt).
• Evaluate ALL Purchases - I already went into this in my previous budgeting post, but wanted to expand things a bit here.  What I'm referring to here is looking at how you spend your money on non-contract items each month.  Like groceries; I find I can still buy organic if I buy the store brand version.  I can buy things that may have been outside of our budget by using the points built up on my American Express card to buy gift cards to Home Depot, etc; or even use the points to purchase directly from Amazon anything they sell.  Some tools to help you evaluate are:
• Blue Bird by American Express
• Simple Banking  "A worry free alternative to traditional banking" with a great wealth of tools for evaluating your spending.
• Handling Big Purchases 
• Budget ahead - Have a seperate saving account where you put aside a certain amount each month till you can purchase the item with cash.
• Evaluate what you can live without - Saving ahead is nice, but life doesn't always work out that way.  We found that when our garage door opener broke, we really could just open the door ourselves.  When our microwave broke, it was just as easy to heat water on the stove and warm things up in the toaster oven.
• Use other peoples money - If you decide you do need the item, like a new refrigerator, find out what kind of no interest plans they have.  Use it and make sure to pay it off a month in advance to avoid any controversy about interest.
• Extended Warranties - I never know what to believe here, but my husband read some articles recently that said don't bother, most items that break will do so during the normal warranty period.

Can you do it yourself?

• Pest Control - We found that simply putting Boric Acid behind our appliances and pluging all holes with caulk, has kept our home mostly bug free.  We had gotten a pest service when we first moved in because I can't stand smells/chemicals and this service treated from the outside. We realized this is an easy service to start up again should we find we have trouble doing it ourselves in the future.  Some services have big re-start costs which should be considered before discontinuing.
• Yard Maintenance - This is another item that has to be balanced.  If you don't have the tools to do it yourself, it may be cheaper to continue your service and there's also the consideration of time away from family.  However, if you have the tools and the time, this is an easy service to discontinue.  This was a hard service for me to give up this year but when I actually went out one morning and did it myself, I realized it wasn't as bad as I remembered.

In the end we were able to cut out from our monthly budget an amount equal to our increase in expenses in other areas (i.e. healthy food and activities for the kids).  So not only is our house lighter this new year, our budget is also. 

I wish you all the same, if not better results.