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Expenses and Savings – Optimization March 12, 2007

Posted by pf in Expenses and Savings.
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The are basically two ways to increase your net worth – make more or spend less.  I’m going to do a thorough review of my expenses and savings in an attempt to make them more efficient / optimal. 

Initially, for this exercise, I am not going to focus on things like additional income streams or my equities investment portfolio (ex: potentially reducing expenses by changing funds, etc), but initially just how I can get better value from the typical household expenses and savings that we have every month.

Focus areas include:

Expenses

Gas
Electricity
Homeowner’s Insurance
Car Insurance
Mortgages
Credit Cards
Cell Phone
Cable
Home Telephone
Entertainment

Savings 

Checking
Savings

Clearly, all of these are not created equal in terms of time / effort to research and develop potential solutions.  For example, I listed our monthly expense for electricity – I’m not sure I have much choice in terms of providers (but I will find out to be sure).  Therefore, I’m left with trying to reduce our energy consumption.  Alternatively, insurance will likely have many potential options, etc.

You may have also noticed I didn’t list groceries.  My wife and I used to be extremely frugal about groceries before we had children – shopping at Aldi’s where you could get $.39 cent loafs of bread and $.25 cans of vegetables.  Since we’ve had children, I have noticed we have “upgraded” a bit.  In particular, we have been eating a lot more organic foods, etc.  This is just more expensive. 

However, we have not completely tossed our old ways as we continue to buy generic whenever possible and shop where we think the prices are best.  We also don’t buy a lot of pre-made meals, etc.  Not just for the cost, but also for health.  Therfore, I’ve just decided it’s not an area I’m going to spend much time on as I think we are still bargain shopping when possible, and I am ok with the extra expense we incur for what we feel are healthier foods for our family. 

I am very interested to see how much in additional savings I will be able to generate from this exercise.  In particular, I try to be conscious about creating the best value when I make the purchases in the first place. So, in theory, there should not be much to squeeze (although I know we could definitely eat out less).  We’ll just have to see.
 

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