So, how much money have you saved?
Calculate the monthly money you鈥檝e saved due to these changes.
If you鈥檝e been reading the Out with the Old series, you鈥檝e probably thought that several of them were good ideas and many were not good fits in your life (and that set was probably different for different people). Among those good ideas, you may have taken some sort of action on a few of them or been inspired to some different action by one of two of them.
Likely, at least a few of these actions have either saved you money or, more importantly, set up some sort of structure by which you鈥檙e spending less money in the future.
Perhaps you improved the fuel efficiency of your car. Maybe you made your home more energy efficient. Perhaps you developed a plan for a resolution that will reduce some aspect of your spending in the coming year. Maybe you banked some meals so that you eat out one less time a week. Did you get a grip on your debts and reduce your monthly debt bills? What about your telephone and cable bills?
Each of these things (and many other things during this series) results in a regular reduction in your spending that will continue into the foreseeable future. Your monthly energy bill is $20 lower than before. Your monthly phone bill was cut in half. Your monthly credit card bills went down $25. Your costs for eating out went down $25 a week, counterbalanced by only a $5 increase in your weekly grocery spending.
Spend some time to figure out the exact (or as close to exact as you can) savings of your choice. This might require you to see a bill or two or might require several weeks to get a bead on the real change in your life, but spend some time now to get the best estimate that you can on the savings that the changes you鈥檝e made will bring about in your life.
Here are some steps to help with that.
Go through each monthly bill. What have you done to reduce that bill? What can you do to reduce that bill? Don鈥檛 look for the radical changes that you won鈥檛 be able to sustain. Look for simple steps 鈥� particularly one-time steps that permanently lower your bills. Many of the items discussed in this series fall under that umbrella, like making your home more energy efficient or improving the fuel efficiency of your car. Write down how much you鈥檙e saving on each of your regular monthly bills due to steps you鈥檝e taken recently.
Go through your regular spending routines. Where do you spend money? If you鈥檝e altered your routine so that you鈥檙e not eating out as often, make note of that. If you鈥檙e shopping at a different grocery store now, take note of that. If you鈥檙e not buying gas quite as often, take note of that, too. If you鈥檙e using the library instead of the bookstore or the video rental place, there鈥檚 another source of savings.
How much are you saving a week (or a month 鈥� whatever is easier) with these little changes? Come up with an estimate for each change you鈥檝e actually made in your life.
What will your resolutions change? Many people make spending resolutions for the new year and if you鈥檝e been following the resolution advice in this series, you鈥檙e likely making better resolution plans for this year and have a much higher likelihood of success. Use this plan to make an estimate of how much money you鈥檒l save per week or per month (whichever is more convenient).
Convert everything to match your pay period. Are you paid weekly? Are you paid monthly? Twice a month? Biweekly? Convert each of these to match your pay schedule.
If you鈥檙e on a weekly or biweekly schedule, convert all of the monthly ones to the amount saved in a single month, then divide that amount by four to get close to your weekly savings. If you鈥檙e paid biweekly and have calculated weekly savings for everything, double those amounts.
If you鈥檙e paid on a monthly or twice monthly schedule, convert all of the weekly ones to the amount saved in a single week, then multiply that amount by four to get close to your monthly savings. If you鈥檙e paid twice monthly, divide all of the monthly savings by half.
Once you鈥檝e converted all of the savings, add them together. That鈥檚 how much of your take-home paycheck you鈥檒l be saving because of these positive changes in your life. That number alone can be inspirational 鈥� and I sincerely hope it鈥檚 a large number.
Tomorrow, we鈥檒l talk about a real use for that number, one that can change your life.
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