For most of us, there will be times in your life when you feel like you are doing OK with money, and other times where it feels like maybe things are a little out of hand. As I started looking towards our PCS next summer, I realized that my husband's income will go down over $1,000 a month when we return to the United States and are no longer receiving a Cost of Living Allowance (COLA.) We don't know where we will live, or what our other expenses should be, but it seems like something we should be thinking about.
Because I'm a planner, I think it makes more sense to get our budget under control now. This would have two benefits. First, we will adjust our spending to our new income so that the transition isn't so tough. Second, we will build up some extra savings in the meantime. If it turns out that savings wasn't necessary, we'll just be ahead of the game. It is a no-lose proposition. Well, except for the part where we want to lose $1,000 in expenses each month. Where to begin?
As I thought about this, I remembered that I have Brian J. O'Connor's book The $1,000 Challenge: How One Family Slashed Its Budget without Moving Under A Bridge or Living on Government Cheese . I read this book before, and planned to write a review, and then I got distracted. Out came the book, and I read through it again. In the book, the Detroit News columnist and Personal Finance Editor writes about his plan to slash $100 per month from each of 10 spending categories:
- transportation,
- miscellaneous,
- utilities,
- kid costs,
- work expenses,
- personal spending,
- entertainment,
- life insurance,
- groceries, and
- housing.
One thing that I like about this book, but that also confuses me regularly, is that each chapter has three sections of ways to save: freeing up cash, making ends meet, and pinching pennies so hard that Lincoln gets a headache. These three sections talk about the different ways to slash from each category of spending, from smallest savings (and easiest changes) to the most drastic measures that will yield huge savings.
While O'Connor is talking about his experiences, he doesn't write about JUST his experience. He looks at all the perspectives on a particular spending category, and suggests all sorts of ways to save even if those ways don't apply to him.
Plus, he's funny.
If you have the feeling that maybe your spending is a little out of hand, or maybe you're facing a shortfall in your monthly budget, The $1,000 Challenge might inspire you to find some savings of your own. Because it focuses on recurring expenses versus one-time savings, the $1,000 Challenge can help you make real, sustainable change. And that's a good thing!
