How I Shaved $30,000 From My Family Budget
In 2007 I sold two successful restaurants that I owned to a gentleman who had three other similar restaurants. He was looking to expand his empire, and I was looking to simplify my life a bit.
This sale was GREAT in that it put a couple hundred thousand into the bank pretty fast. What was NOT so great was that I was GIVING UP the approx. 50K in income that those restaurants provided each year.
I learned a hard business lesson that many business owners simply don’t consider when they sell their businesses. It is easy to think, “Great, I’ve got a large chunk of money!” It is not as easy to think, “Wow, I need to change my lifestyle as I just gave up a recurring revenue stream!”
That being said, in 2008 my family needed to change our spending habits SIGNIFICANTLY or we risked blowing our entire nest egg. Here is a snippet of what we did to cut 30K of fat from our budget without too much lifestyle change. And I can tell you it felt AWESOME to get the spending under control! As a family we didn’t feel like we were giving up much at all…2008 was probably our best year yet!
BIG CHANGES:
1.) Gave up expensive travel and vacations for frequent camping trips to local state parks. $6000 yearly savings!
2. Gave up eating out all the time and trying to buy “Organic Everything!” $3500 yearly savings!
3. Stopped shopping when we were “bored” and realized our closets ALREADY were overflowing! $4000 yearly savings!
4. Got rid of our most expensive auto payment. $5000 yearly savings!
5. Gave up going to the movies and out with friends all the time and traded it for Blockbuster Online and popcorn with our girls. We were spending almost $3000 per year on BABYSITTERS! Crazy, I know! $4000 yearly savings.
Smaller Changes:
1. Refinanced our mortgage to a 5.50% 30 year fixed rate. $1800 saving per year.
2. Appealed our property tax assessment. $500 savings per year.
3. Learned how to set our programmable thermostat, and dropped the temperature about 3 degrees. $800 savings per year!
4. Dropped expanded cable and phone service $1200 savings per year.
5. Stopped mindlessly driving everywhere and stuck to a fuel budget. $2000 savings per year.
6. Misc. small cuts not worth mentioning $1200 savings per year.
I hope this helps some of you and encourages you to “tighten up the belt!” I know it is a lot more sexy to buy a new 60 inch plasma than to increase your permanent life insurance coverage…but what has the better long-term payoff for your family? That’s what we all need to decide!
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March 21st, 2009 at 12:54 pm
Wow! What an effect. I’ve written about how it’s not often the small changes in your life that make the difference (i.e. the latte factor), but the big changes that we’re unwilling to make simply because of their sheer size. I’m glad you were able to make such drastic corrections and shave off an enormous amount of spending. Way to go!
P.S. The babysitting number was staggering! I can’t wait until I have kids – my wife and I will have to have a serious sit-down.
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Almost Millionaire Reply:
March 21st, 2009 at 5:18 pm
Every time I look at my old personal financial tracking tools I’m SHOCKED at what we spend on child care…especially because my wife is a stay at home mom! You will see though, with 3 little ones, you need a break every now and again! Thank God for GRANDPARENTS! They have helped the budget A LOT!
Almost Millionaires last blog post..How I Shaved $30,000 From My Family Budget
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March 21st, 2009 at 2:29 pm
Perfect example TAM of how we’ll allow our spending to rise to the level of our income. When you lost that income the last thing you wanted to do was then lose the lump some – something most would not have thought of until too late. So you were able to pull some obvious strings and make some huge savings!
Good work, thanks for sharing.
Dave
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Almost Millionaire Reply:
March 21st, 2009 at 5:20 pm
Dave, you are right on! It is so easy to spend more when you make more. My goal is that when I’m making 500K a year or more, I can still keep my expenses under $100K and invest the rest into great ventures. We will see!
Almost Millionaires last blog post..How I Shaved $30,000 From My Family Budget
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March 22nd, 2009 at 2:29 am
You can have organic everything for free if you start your own garden.
Growing some of your own food is a great way to save some money and make sure your family is eating healthy. At the very least, an apple tree in the backyard puts some fruit on the table and is easy to maintain.
Thanks for the post!
Lindsays last blog post..Sell Twice as Many Books by Adding a Mailing List to Your Site
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March 22nd, 2009 at 4:29 am
Very good tips. A quick question is how did you get rid of the most expensive auto payment. Did you simply paid it off and calculate the savings in the interest you would have paid?
plins last blog post..FREE Ice from Ritas (March 20)
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Almost Millionaire Reply:
March 22nd, 2009 at 12:50 pm
I sold it.
Almost Millionaires last blog post..How I Shaved $30,000 From My Family Budget
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March 22nd, 2009 at 8:26 pm
#3 Stop shopping when bored. I need to remember this rule as well as not grocery shop when hungry.
I also appealed our property tax and received about $800 in savings. Since we live in California, the rates should drop again next year as they are based on Feb 2008 home values.
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Almost Millionaire Reply:
March 23rd, 2009 at 12:29 pm
The dropped my taxable value again this year, but only by about 2%…I’m working to get it dropped by 10% as that is what my research shows houses dropped in MI in 08
Almost Millionaires last blog post..How I Shaved $30,000 From My Family Budget
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March 22nd, 2009 at 8:39 pm
[...] Almost Millionaire wrote How I Shaved $30,000 From My Family Budget. I also appealed our property tax bill and was granted an $800 [...]
March 22nd, 2009 at 9:05 pm
I love it! It always seems like there are ways to cut back in your budget. Well done!
Trevor @ Financial Nuts last blog post..Frugal Tips: Ski Trips Are A Lot Cheaper If You Prepare The Right Way
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March 23rd, 2009 at 4:17 am
Man, you were living an expensive lifestyle weren’t you mate. There isn’t much I could trim off my lifestyle to safe money except taking the daughter out of private education and maybe trading in the wife.
Sires last blog post..Thesis Theme Is Just Not Flexible Enough
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Almost Millionaire Reply:
March 23rd, 2009 at 12:30 pm
Ya Sire, it wasn’t smart at all. I sure bought into the whole American Dream…spend and consume…bucause you will always be richer tomorrow than you are today. Not anymore, I’m a debt destroyer and a saving machine this next go around!
Almost Millionaires last blog post..How I Shaved $30,000 From My Family Budget
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Sire Reply:
March 27th, 2009 at 8:39 am
Shit mate, don’t do that, because if you do that I will never be able to catch up with you
Sires last blog post..There Is No Way In Hell That A Man Can Please A Woman
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Almost Millionaire Reply:
March 27th, 2009 at 12:21 pm
Sure you will, what with that great tax system in Austrilia and all
Almost Millionaires last blog post..Franchising For Cash Flow
Sire Reply:
March 27th, 2009 at 1:34 pm
Surely you jest my friend
Sires last blog post..There Is No Way In Hell That A Man Can Please A Woman
March 23rd, 2009 at 2:20 pm
It’s great to really evaluate your spendings and see where you can cut back on expenses. I constantly tell my dad to do that but he seems to have a lot of trouble with it. It helps that you were living an expensive lifestyle but it is definitely something that everyone could benefit from.
Creative Writing Tipss last blog post..Unreliable Narrators – Who Can You Trust?
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March 24th, 2009 at 2:22 am
Hmmmmm… This kinda makes me think more about selling a couple of my websites… They’re just sitting there, i don’t have time to work on them and keep ‘em up as much as i should BUT, they are making money haha…
Thanks for making me rethink
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Sarah Reply:
March 25th, 2009 at 1:24 am
This shaving was easier said than done. Budget cutting is never fun at all.
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March 24th, 2009 at 2:06 pm
Great post, one of your best.
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March 25th, 2009 at 2:36 am
Wow, you managed to shave off a bunch of money. Nice job on doing that, it’s tough to save money.
Funny Quotess last blog post..The Infinite Loop
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Almost Millionaire Reply:
March 25th, 2009 at 2:14 pm
Ya, I was a spend – o – holic! I’m giving up the consume just to consume American way of life. It is much more freeing to not have bills!
Almost Millionaires last blog post..Wisdom Teeth Advice
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March 25th, 2009 at 8:16 am
That’s alot of savings there Brandon. I must say, it wouldn’t have been easy. Now your living a simpler and much healthier life. Thanks for the tips.
Make Money Onlines last blog post..How To Market Your Business In A Recession
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May 8th, 2009 at 10:50 am
RwACCT comment2 ,
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July 24th, 2009 at 1:04 pm
How the heck did I miss this post? Great stuff, Brandon, but the car,… did you just pay it off, or did you sell the car? I look at my budget and I don’t see a place where I can lop off even $500, except for the eating out part, and we may do that, on average, once a week, so I’m not giving that up. Then again, it’s only the two of us.
Way to go; proud of you, my man! But since you sold the restaurants, how are you generating new funds, other than the blog? Yeah, I’m nosy!
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July 27th, 2009 at 8:58 pm
Good for you! Its hard at first but it will all be worth it in the long run.
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August 8th, 2009 at 3:37 pm
Thanks. It seems to have solved my problem as well.
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November 4th, 2009 at 3:48 am
This blog is nice to read.Only fewer bloggers write this way. I like it, I hope to see more post from you. Thank you!!!
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