Monday, January 30, 2006

Making Budget Cuts so One Parent can Stay Home

By Christina VanGinkel

If you are serious about one spouse staying home with the children, you must be realistic when reviewing what can and cannot be cut from your budget. To start, there are parts of a budget, that can reap huge rewards in money saved, that many people do not even consider.

Housing Costs

Your house is often your most expensive part of your budget. The mortgage, property taxes, insurance, and maintenance can add up to a large sum each month. Now is the ideal time to consider if a move may be just the thing to make your budget friendlier to going from two incomes to one. In our area, property tax time comes twice a year, January 31, and again on the last day of July. Tax bills arrive at the end of December, when most people are still reeling from the costs of the recent holidays. When ours arrived this year, I did a quick calculation of what it was in comparison to last year, and then moved it to my file of bills to be paid. I did not give it another thought until I was talking to a friend who noted that for them to stay in their current house, each morning upon waking, they must take approximately $15 and put it away just to pay their property tax this year. This is every day, weekends and holidays included. When I considered this added up cost, I was both glad that we had made the decision years ago to purchase a smaller home that would fulfill our needs, but forego any extravagances, especially in size. My friend has the same size family as we do, lives just a few miles away, but when her husband and she built a few years ago, they went all out, building big, and building flashy. They are now paying in taxes more than we pay for our mortgage and taxes combined!

I like her house, but I enjoy mine, and am glad we made the decision to consider our needs and not so much our wants when we picked it out. After hearing what she pays in taxes, I enjoy mine even more. Our house has other advantages also. With heating costs rising everywhere, our house is still not that expensive to heat, mainly because it is small and well insulated. I would be lying if I said I did not love the looks of her cathedral ceilings, but I do not want her heating bills. If your housing costs are high, now is the time to consider the issue of downsizing. Moving to a less expensive neighborhood could save you enough money to make an earnest effect on your budget. This is a drastic step to make one income work where two were needed, but if the issue is as great as this one, then it is worth considering.

Vehicles

This can be as touchy an issue as housing, maybe even more so, as many of us are just not willing to give up a vehicle. If trimming your budget is your goal though, then you must at least look at what your current vehicle(s) cost you each month. What does the payment, along with insurance, cost each month? Would changing your deductible be an option? With the fluctuating costs of fuel in today's economy, what your average fuel charges are also need to be examined. Could you trade in a vehicle for a smaller, more fuel efficient one, or trade down to a used vehicle? If you normally trade in your vehicle every two years, what would the savings be if you held onto it longer than the two years? What if you kept your current vehicle even after it was done being paid for, instead of getting a new one altogether?

Dining Out

We all have to eat, but where we eat can have a huge effect on our budget. If you currently get takeout several times a week, and dine out on the weekends, what would the comparison in costs be if you cut that down to once a month for dining out, or even not at all? Some of the monies saved would of course have to go back into the budget for groceries, but surprisingly, most of us are unaware what it actually costs us to eat out repeatedly until we actually add it all up.

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