Here's an example of a woman who wrote into Mr Money Mustache and her story about how she cut costs. She was able to cut costs by 52%!
"First, some additional background. As previously mentioned, my husband is a retired veteran. He was awarded a temporary disability rating upon exiting the Army, and is now on a permanent, lower disability rating. This change happened in July and resulted in a $901 drop in pay. Also, around August, my husband’s condition had reached a point that unreliable transportation was no longer acceptable, meaning our options were to risk becoming wheelchair-bound or buy a car at stupid high interest rates to avoid walking, as unmustachian a doctor’s order as possible. Luckily, I had a head start on these disasters; I was already carefully nursing my stubble.
Between January and May 2013, this is my best guess at what our spending looked like. We never kept receipts and often didn’t even look at price tags.
Total Income: $3,130
Rent: $900
Utilities, phone, and internet: $600
Transportation: $100 (bus fare, borrowing cars, paying for late night taxis)
Food: $800
Cigarettes: $200
Impulse Spending: $400
Pets: $150
Household $100 (Cleaning, toiletries, maintenance, cheap fixes)
Banking Fees $100 (ATM, Overdraft)
Total Spending: $3,350
Fast forward through June, July, and August, which were spent reading all of mrmoneymustache.com, writing up sample budgets, taking notes where they applied to us, and picking one thing to tackle at a time. In September 2013, this is our budget:
Total Income: $2,229
Rent: $300
Transportation: $320 (insurance, gas, taxes/registration, and maintenance)
Car Payment: $320 ($~4,900 @ 23.99%, hair is on fire emergency.)
Dental Work: $118 ($~2,500, no interest)
Student Loans: $118 ($9,000 @ 4.5%)
Phone: $46 (unlimited, we share a phone.)
Cigarettes: $108 (woohoo, a 46% reduction!)
Food: $250
Pets: $85
Household: $100 (Cleaning, toiletries, DIY toolbox building)
Fun Money: $240 ($120 each, gradually working down to reasonable levels.)
Banking Fees: $75
Total Spending: $1,760 <– Saving $469/mo to throw angrily at debt!
Also, upcoming in October, I am scheduled to start my first month as a part-time nanny. I will be making an extra $300-$550 month, $45 of which will be kept for a Treehouse membership and a gym membership, and the rest will also be thrown angrily at debt.
We are also staying with my mother, she offered for us to stay around the time she found out *I* was going to be on *your freaking blog*. We intend to get out around March 2014.
I am proud of this huge 52% reduction in spending levels, but even more proud of the lifestyle changes that allowed it to happen. For one thing, we’ve started cooking at home with at least partially healthy ingredients with more and more regularity. We’ve also all but entirely cut soda and fast food from our lives. My husband has cut his nicotine addiction nearly in half in only three months. We are no longer fostering stray dogs and are buying better-priced cat supplies.
We have not only cut our discretionary spending, but we have also started buying things we need with it instead of random impulse items. We have started paying off my federal loans, previously left in default. Moving in with my mother is not only saving us nearly what our pay cut cost us, but it also allows me to have a job and easy access to a grocery store with reasonable prices. We are also being forced to think carefully before each purchase due to space constraints and a strong desire to become independent as soon as possible. When things break around the house, I determine which tools are needed, buy them, and add them to my collection of problem solvers.
There are several areas that we have identified for further improvement, including every single section of the budget, but for now our largest priorities are a sucka banking cycle we’ve been in for over a year now (borrow $1500, pay $100 in fees, pay back on pay day, repeat…) and that really hot car loan burning my scalp. Once these two emergencies are settled, we’re prioritizing a small emergency savings, our own dwelling, and our disfigured credit reports/scores. As we continue to learn to not suck, we hope to get our monthly living costs down to around $855 plus mortgage by 2015, and from there who could possibly predict? How’s that for a Mustachian 180?"
$600 was reduced by moving into her parent's place, which makes up 18% of the reduction. But if you're not able to do this you could make it up in other areas. The cigarettes and car payment (24%!!!) are absurd! Not to mention the student loan that should have been paid off long ago. When these expenses are done away with it'll make up for the decrease in rent.
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