Wednesday, July 20, 2005

Saving Strategy - Brownbag it

I feel great today. In less than 3 weeks I have set up a brokerage account, started a Roth IRA, maxed out my 401k, enrolled in my employer's stock purchase plan, balanced my portfolio, calculated my net worth and set up a budget. A small step for more financially savvy people I am sure but a giant leap for me. Hey, it's more than I have done in the last 7 years.

Of course, with this financial awareness and maturity comes additional responsibilities. e.g because of all these changes and direct payroll deductions my take home per month has been reduced from $4800 to $3580. I am also still almost $18k short of my $45k net worth increase target. My direct deductions only come up to $27k which means I have to save what I can from my take home and invest wisely to meet that goal.

So, I have been thinking about how and where I can cut costs. The two areas where I tend to overspend are Food and Shopping & Entertainment which means these are the two areas where I can save the most. Last month I spent over $600 on food. I remember when I was a student my entire month's food bill came to about $80. While $80 may not be realistic today, $250 might be. Here are some ways I plan to reduce my food bill without completely giving up the things I enjoy:

- Every Friday & Sunday I go down to Starbucks for a tall caramel frappuccino. Cost: $2.50 each. I am going to limit it to 1 per week or try to make my own at home for an estimated savings of $10/month.

- During the week I eat breakfast and lunch at work. Cost: $3-4 for breakfast and $6-7 for lunch. If I get up 15 minutes early every morning I can make some toast and coffee and pack a quick sandwich for an estimated savings of $150/month.

- At least three nights a week I either dine out or order in. Cost: $20-30 per meal. I am going to limit this to once a week for an average savings of $160/month.

- I spend about $15/week on soda, candy, ice cream and other junk food. If I cut back to $5 a week I can save another $40/month.

Total savings = $10 + $150 + $160 + $40 = $360/month

2 Comments:

At 7/20/2005 5:35 PM, Blogger Karen said...

This is a great plan. Good luck!

http://ksfinancialprogressreport.blogspot.com/

 
At 7/21/2005 8:56 AM, Blogger mmb said...

Thanks. :)

 

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