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How We Cut $15,000 in Expenses

Our path to financial independence began in the area of expenses.   In 2013, we took a look at our spending and made some changes going into 2014.  Surprisingly, the changes were relatively painless.  Our quality of life didn’t suffer, but from these efforts we saved $15,000 in annual expenses in 2014!


Pareto Principle
Pareto Principle…good most, but not all, of the time

I have tried to operate my life mainly by the Pareto Principle: 80% of results are achieved by 20% of the effort.  Work smarter, and on the parts that get results.  Avoid being a perfectionist.  I still believe this principle helps in many aspects of life (and work), but as I ran the numbers in my household budget I realized I had been fooling myself. I had used this rule of thumb to ignore my laziness.  Since I’d been running my household finances in the black (creating some savings), I’d used that rule of thumb as proof that my costs were relatively in-line and efficient.  Any waste was probably not worth the time to deal with.

It wasn’t until some early retirement articles challenged me, that I asked:  why am I not saving 50-75% of my income?  Is it easy, hard, or impossible?

As I glimpsed into the line items, I found a wasteland of inefficiency.  Some easy things were fixed with a simple call, some with minor lifestyle tweaks, or straightforward positive life changes.  I decided to give it a go, and was astounded at the results.   I saved over $15,000 of annual expenses in 30 days of focus.   And I identified another $15,000 in more areas to focus on in the medium and long-term.

Here was my thought process for the savings kick-off:

First, I focused on recurring costs that weren’t affecting our life at all.  Expenses that repeat monthly can be killers.  $15-20 per month sounds like nothing – until you realize it’s $180-240 annually.  Find that 4-5 times, and it’s $1,000.

Second, I looked at other wasteful recurring expenses that could be easily cut with direct but limited changes.

And third, to be a little sporting I also wanted to step away from some of the cushy/lazy “needs” in my life.  So I tried to be less wasteful in some things that I consume that would impact (positively) our lifestyle.  See how it went, gain some momentum, and then continue stepping things up.

For anyone sitting under a pile of inertia – like I was – hopefully this list will be helpful “low hanging fruit”.



Description Monthly
Amt Before
Amt After
Credit Card Fees $12 $0 $12 $145 $20 $0 $20 $240
Virus Checker $5 $0 $5 $59
Sirius XM $12 $4 $8 $96
Gym $33 $10 $23 $276
Ipad Cell $15 $0 $15 $180
Business Expenses $55 $0 $55 $660
Electricity $120 $90 $30 $360
ID Protection $15 $0 $15 $180
Car Interest $22 $0 $22 $263
TOTAL $2,458 


  • Credit Card Fees – I had been lazy and let the cards with great points offers and no annual fee (first year only!) roll into the second & third years.  They had actually just charged my account the month before.  But with a request to cancel the card, they refunded the charge if I would keep the card open.  Score
  • – Before the birth of our son, my wife and I got into as a hobby.  It’s quite fun & informative about family history, but the catch is that it’s a recurring monthly fee.   I hadn’t wanted to lose all the info built up so had ignored the month charge one month, then two, then a couple of years.  Ridiculous waste looking back.  A quick google search showed us how to download the info to a GEDCOM file – and the instructions were on the site.
  • Virus Checker – embarrassing, but I was paying for an annual virus checker renewal for my previous (5+ yrs ago) computer.
  • Sirius XM – We have Sirius radio in one of our cars (my wife’s).   She really likes it, and wanted to keep it if we could get a better deal from them.  So I called and they cut the price by 2/3.  Combo win for savings and getting wife buy-in on these changes being positive.
  • Gym – With not having a shower at work, I use the gym as my shower/change station when biking to work.  Necessary because I’m usually drenched in sweat – it’s hilly here in Raleigh.  It’s also good for lunch workouts on days I don’t bike – allowing me to do most of this blogging.
  • Ipad Cell – We had gotten cell service on our home iPad, but don’t really travel with it at all.  There was no need to keep paying AT&T this monthly charge.
  • Business Expenses – Another embarrassing one.  I hate doing expense reports.  Before tracking expenses, I would miss a decent number of them – especially driving, parking, and small lunches.  But now taking the time to understand where the money is going, these expenses don’t slip through the cracks.
  • Electricity – I switched almost all of our bulbs to LED or CFL.  Costco/Duke Energy had an unbelievable offer with an 80% off price on these bulbs.  So a 4 pack of CFLS was $1.  Easy payback on that.  Also, we set our A/C a little higher this summer.
  • ID Protection – My wife had signed up for this identity theft protection awhile back.  I think we can do about the same thing by checking our expenses often, and our credit reports every once in a while.  I guess it could bite us, but I don’t really see the value.
  • Car Interest – With these and other cost cuts, we didn’t feel that we needed the same level of emergency savings – if it was going to an expense reducing area.  So we paid off the remainder on our car loan.  It was a little hard for my finance brain to pay off a 1.75% loan, but it was only 2 more years.  And finding expenses to reduce is contagious so I think the momentum is worth it.  Plus this analysis only shows the interest, but we also are not forced to pay principal monthly, which is just a nice feeling.



Description Monthly
Amt Before
Amt After
Insurance – Home $100 $89 $11 $136
Insurance – Rental $138 $64 $73 $877
Newspaper $30 $20 $10 $120
Massage $71 $21 $50 $600
Groceries $1,000 $700 $300 $3,600
Coffee Shops $5 $0 $5 $60
Baby Clothes $200 $60 $140 $1,680
Vacations $450 $400 $50 $600
TOTAL $7,673


  • Insurance Home –  We shopped and purchased our home/auto insurance several years ago, and were due for a tune up.   Our insurance company has been great to work with over several claims over the last few years – hurricanes, tornadoes, and other fire & brimstone.  So we didn’t want to leave, just wanted to check our deductibles, deals they may have, and insured values.  I included insurance in this list because there is no upfront impact, but there could be more fixes to do on our own, or more costs to cover personally down the road.
  • Insurance Rental – We saved a bundle here. We upped the deductibles to self-insure for smaller incidents. Additionally, the insurance company inflates the coverage each year, which snowballs a little over time. We brought this back in-line with market for just the structure re-build (don’t insure land).   Assuming they price correctly, less insurance is better in my mind because they are making profit I the long-term.
  • Massage – I was signed up for Massage Envy’s program for monthly massages.  That is a luxury I thought wasteful to do every month.  This number includes the 59 per month plus 20% tip.   Maybe every once in a while, but as a present or special occasion. Keep luxuries as luxuries.
  • Groceries – We spend a bunch on groceries compared to other frugality bloggers.   We eat a lot of organics, even though that’s not the sole culprit for high expenses.  But we’re working to get this at a more efficient level, and I think there is a lot to learn for another middle class family watching us change our habits.  This 30% reduction has taken place by inserting Costco into our shopping pattern (good selection of organics on certain items), and going to Kroger (mid priced grocer) instead the high-enders (Harris Teeter and Whole Foods locally).   Also, we’re cutting out stops at convenience stores for high-priced sodas and chips – bad for us anyway.
  • Coffee Shops –  We don’t do too much coffee-shopping, but thought we could cut back the little that we do.
  • Baby Clothes –  My wife has come through huge in this area.  She was beginning to spend a god bit in aggregate on baby clothes.  She was feeling wasteful even without me pushing, and started going by consignment and thrift stores.  She had to weed out some of the gross/unsafe thrift stores, but now enjoys the hunt of finding him a nice set of clothes at a dollar a piece.  Babies grow so fast that paying retail for their clothes just doesn’t make rational sense at all.
  • Vacation Travel –  We haven’t really focused on or changed our vacation plans at this point. More to come once we’ve lived through a summer with a frugal mindset.  But we do have a ton of airline miles saved up, and countless more offered on credit cards. So we agreed to knock out flight costs from the budget.  We are also thinking more frugally about travel, but not banking on these savings until we know more.


Description Monthly
Amt Before
Amt After
Auto – Gas $200 $125 $75 $900
Work Lunches $120 $15 $105 $1,260
TV/Internet $205 $61 $144 $1,728
Golf/Sports $150 $35 $115 $1,380
TOTAL $5,268


  • Work Lunches –  these have been dramatically reduced. I decided to either go to the gym or bike each day, and eat something from home each day. Lunches out were about $10 each at best, and not usually healthy. I had convinced myself that I needed time out of the office – but paying for lunch is not creative or an optimal use of time.  I relax substantially more by working out, or can get home earlier (took commitment to actually leave earlier) when I just work through and eat at my desk.  When I want to go out to lunch occasionally, I make it a work lunch.  Has been effective at saving money, and helping my productivity at work.
  • Auto Gas – we made two short-term solutions to lower costs, then are working on longer term optimization.  First, I am riding my bike more – which lowers my gas usage.  Second, my wife & I have switched cars, so the one driving more miles takes the more efficient car.  And then the gas market tanked, so this goal became easy.
  • TV/Internet –  this was a big one in our family.  Not a commitment to give up TV, but we cut the cord.  We now have a digital antenna and Apple TV.  It’s not the most simple setup, but it is workable – and does cut down on the time wasted watching TV.  It gets us outside more, lets us actually spending time relaxing, increases the quality of our interaction time, and leaves time for individual pursuits (like blogging).
  • Golf/Sports – I was playing a good bit of golf previously. Probably 3-4 times a month. In going through my values, I realized that I first want to spend time with my family, then friends. And there are more creative ways to hang with friends if I take the initiative. I still enjoy golf, but will play it less and be sensitive about how expensive the course is. (Rather than the “I deserve this” mentality)  Golf is also pretty wasteful on the ecological side, which I’m trying to factor into more decisions.

The Wrapup

These savings add up to $15,399 annually!

That’s like making an additional $26,000 if my marginal tax rate is 40% (all-in).  Another way to look at this is $400,000 less I need to save to retire (Using the 4% rule…a later post).  And each one of these has either not affected our life or pushed us in a saltier/happier long-term state.  We have gained a good bit of momentum and shifted our mindset in a very positive direction – somewhat away from consumerism.  Not counted in these numbers are several increases in lifestyle inflations that I have avoided (future post hopefully also).

I followed these initial cuts with another $15,000 of medium term goals in the areas of mortgage interest, financial fees, student interest, shopping, bills/utilities, and vacations.  I outlined these goals briefly in my 2014 Cash Flow post, and will follow up with more detail.