Anonymous wrote:This year I made a goal to start saving at least 20% of my take home pay. I hate to admit it, but before this I was basically not saving anything except for my annual bonus, which isn't that much.

I created a very rough spreadsheet and wrote out all of my monthly expenses. I added all of those up and determined what my maximum monthly credit card spending can be in order to save 20% of my take home pay. I started using only 1 credit card so my spending is easier to track. Every few days I log into my account to make sure I know how much I've spent.

I've also started doing almost 90% of my grocery shopping at Aldi, and cut back on all Amazon spending except for ABSOLUTE essentials, and cut out just about all impulse spending, and by doing this, I've been successful in saving at least 20% of the take home pay almost every month of this year.

that’s great!

Anonymous wrote:Take out cash for the entire month. That fits your budget. Divide cash into envelopes. One envelope labeled groceries etc, etc. One envelope for each category of discretionary spending.

Towards the end of the month, it wouldn't be unusual to reshuffle the cash between envelopes. But don't take out any extra cash from the bank.

this is exactly the You Need a Budget (YNAB) system!

Anonymous wrote:Childcare is very expensive, so it's a place that you can also save. Discretionary clubs or camps that are pricey. New clothes and restaurants.

How do you save on childcare in this area? Unless they have a nanny you don’t have much choice.

My crazy advice: Move to an exurb or a townhouse under 600. I’m sorry it’s just so much cheaper. Good public schools, less keeping up with the Bethesda prices for everything from activities to birthday parties. Don’t get the fancy house either get the old kitchen one. Have your mortgage be the least stressful thing in your life.

Eat out once per week. Only one time.

You put yourself on a personal spending budget. You get $50/month for frivolous spending. No, I'm serious. And you stick to it.

You color your own hair at home. You go to the Supercuts, or do your research to find a cheaper salon.

Your kids (if grade school age) get one spendy extracurricular. Music lessons, OR Karate. Not both. Let them choose. Choose wisely. It's good for them to make decisions

This is what I did. It takes tremendous discipline. And our kids got into excellent universities later.

I invest the money I save. I buy quality companies. If the price goes down, I get a discount. I don't lose the money unless I sell.
If there's market rally, I can clearly see growth.
This is like double whammy for me. I love cutting costs, but I'm not going to let the money just sit around.

Take out cash for the entire month. That fits your budget. Divide cash into envelopes. One envelope labeled groceries etc, etc. One envelope for each category of discretionary spending.

Towards the end of the month, it wouldn't be unusual to reshuffle the cash between envelopes. But don't take out any extra cash from the bank.

switch to all card purchases are either cash or a debit card. Laugh all you want if you are using debit you will spend 25% less than credit and thus an instant savings **

** applies to people on a tight budget

I agree it’s always a good idea to try to make more money, but if you don’t have a handle on your spending, it’s very easy to mindlessly spend whatever your additional earnings are after getting a new job. We live in such a high consumption society that most people people level up their lifestyle after getting a pay increase and don’t direct income increases to savings.

I like YNAB. I’m new to it - recommended by DCUM.

I also recently watched how to get rich. If you have Netflix you might watch it.

What are some big things you can cut - travel? Dining out?

You could try to do a no spend month to kick off some good habits.

I canceled a bunch of subscriptions since starting YNAB - canceled a coffee & a wine subscription (realistically can get both cheaper at grocery), canceled one news subscription, canceled my daughter’s gabb watch subscription (she doesn’t use it), realized I was paying 2 apple storage fees and we could all be on one as a family, etc.

There are lots of helpful suggestions on where to cut, and definitely agree it's great to regularly assess whether you're getting the best insurance rates, setting an appropriate grocery budget, etc etc, the list of things where you can cut small amounts is probably quite long.

However, my suggestion would be to focus the majority of your effort on seeing if you can increase your income(s). So many people undersell themselves or don't realize their true worth, and I'd encourage you to see what you can do to jump to a new position or role where you might be able to negotiate a 10 or 20 or even 30% pay raise - be bold!!

I was in a similar situation as you, and just by being a little bit more assertive in my job applications and interviews I nearly doubled my income (went from individual contributor to manager role) and the instant financial relief was easily worth the 2-3 months of preparation.

Hope this helps, and good luck!

Try to get your electric bill lower-turn off the lights!
Shop at Aldis or Walmart for groceries
Meal plan, avoid eating out
Cut beverages such as juice with water
Cancel newspaper and magazine subscriptions
Don’t buy greeting cards - have kids make them

Cut out all impulse shopping, including Amazon, stop buying new clothes and beauty for yourself, stop eating out, start shopping at Aldi. Doing all of these things can save hundreds of dollars a month if not more.

See where the money is going. Use Mint or You Need a Budget or whatever to download and automatically categorize your spending. It's easy and fast. The numbers will point the way.

The usual things are always good:
Eating out. Private school. Pricey extracurriculars/sports. Subscriptions. Amazon shopping.

In the longer run - consider renting out a room, figure out how to eliminate car payments, consider moving to a lower cost area

Sell a child. Cash windfall, cuts future costs.

This year I made a goal to start saving at least 20% of my take home pay. I hate to admit it, but before this I was basically not saving anything except for my annual bonus, which isn't that much.

I created a very rough spreadsheet and wrote out all of my monthly expenses. I added all of those up and determined what my maximum monthly credit card spending can be in order to save 20% of my take home pay. I started using only 1 credit card so my spending is easier to track. Every few days I log into my account to make sure I know how much I've spent.

I've also started doing almost 90% of my grocery shopping at Aldi, and cut back on all Amazon spending except for ABSOLUTE essentials, and cut out just about all impulse spending, and by doing this, I've been successful in saving at least 20% of the take home pay almost every month of this year.