How I reduced my monthly expenses by over $295!

I don’t particularly want to be frugal, but at this stage in my life, I don’t have an option.  So, instead of feeling sorry for myself I have made it my personal obsession to understand my personal finances beyond couponing and cutting out trips to Starbucks.

Can I offer our readers anything new? I’m not exactly sure, but I would like to share how I reduced our family’s monthly expenses by $295 and if any of these tips apply please feel free to e-mail me if you would like more support or details on how to start implementing these tips in your home.

Before I get started I have one forever tip and that maintains “excellent” credit and you will find more opportunities to save than someone that has “good” credit.

1. Refinance – $0 Closing Costs and Low Rates.  We locked in a 30-year fixed mortgage rate and saw our rate go from 5.125% to 3.75%.  Some banks are offering $0 closing costs to refinance, provided your credit is excellent and your loan amount exceeds a certain dollar amount.

Because we have maintained an excellent credit rating we were able to take advantage of this offer.  (Please be careful – some lending institutions try to entice customers with $0 closing cost offers, but it is not always completely free so read the fine print and ask plenty of questions before you get started.)

Our monthly payment (principal, interest, tax and insurance) is now $100 less than it was last month.  In this situation we have two options we can enjoy the $100 savings or we can continue to pay the same monthly amount and allow the extra $100 to chip away at our principal mortgage balance.

This is a personal option to be decided based on the current needs of your household. Please note, in order to refinance we had to supply a lot of paperwork to the bank that took 60 days to complete.  Thus, this strategy takes time, but do not let the amount of paperwork deter you because the savings are huge!!!

2. Subscribe to a new Internet/Cable Provider. Our 1-year contract on our cable/Internet/phone service provider expired last month and we saw our bill skyrocket by an extra $40/month for the exact same service.

No thank you, I called the provider to try and negotiate our bill and had modest luck, but I still wasn’t satisfied.  I contacted the competition and they were able to offer us a great package with $0 installation fees and a monthly bill for the same cable/Internet/phone package for $100 less per month!

We are considering going one step further and nixing cable and streaming our television shows online or through hulu.com – if anyone already does this please post a comment with the pros and cons??

Contribute to a Flexible Spending Account (FSA). If your employer offers a FSA consider contributing to it.  I am permitted to contribute to a Health Care FSA, Dependent Care FSA and a Transit parking account.

Most of these costs I have to pay out of pocket and then submit a reimbursement form.  The benefit is that these savings accounts are funded with pre-tax dollars which means that they are not included in federal, state, local and county taxes as well as social security and Medicare taxes.

In the depended care FSA and the transit parking account, I know the costs associated with daycare and my monthly parking so determining how much to fund these accounts was easy.

If you are unfamiliar with FSA’s please read my earlier posts here and here.  The monthly savings my family will enjoy from this strategy is approximately $95 per month.

These are the big ways my family cut our expenses.  In doing this we have been able to free up money so if we want to go buy a cappuccino instead of making it at home we can.

Or if we want to order pizza and add cinnastix (my favorite) we can.  My personal belief about family finances is that it is about compromise, discipline and rewards.  Some rewards are short-term (cinnastix) and others long-term (retirement).

Live within my mantra: Make your money work smarter for you.