This is a bit of an odd post but I’ve been actively on the phone making tons of calls to research changes to nearly every reoccurring expense. Therefore I thought you might appreciate reading about how to make a crash budget.
I am no longer working a 40-hr week due to health reasons so I did have the extra time to dig into these preplanned options. About 3-6 months ago I made what I call a crash budget. In the crash budget, it is everything you can change this month that would apply immediately to stop the bleeding. I highlighted bills that I thought could be negotiated lower or that shopping around would reduce or expenses that I don’t fully utilize or could do without if necessary.
Crash Budget: Subscriptions and Memberships
One of the easiest things to adjust is to drop memberships. I could cancel Amazon but I’m not there yet. For this year I dropped my Planet Fitness membership. While we are going into the cold season, I do have plenty of home gym equipment so this is something I can do without.
Subscriptions are in this category as well. Currently, I have a pest control service that I could cancel, but haven’t because I have a wasp problem right now and I find it worthwhile for me not to be exposed to harsh chemicals. There is a chance I could shop around on that as well and reduce the cost.
Crash Budget: Utilities and Home Services
In my crash budget, I drop recycling and the lawn bin in the winter. However, I have not taken this step yet.
I had a note to call to do a contract with my internet provider to cut costs by $10/mo. However, the entire game has changed already as they don’t have contracts. Instead, by adding a phone line I was considered a new customer and received higher internet speeds and $10 less/mo as well as a promotional deal for half price for 3 months as long as I do autopay and paperless bills. No problem. This will kick in for the October billing cycle.
Crash Budget: Insurance
I’m currently working on getting competitive quotes for home and auto insurance. My current plan also includes identity insurance which totals $180/mo. One quote has come in without identity insurance, for $103/month if paid in advance. I haven’t looked at paying my current plan as a whole year yet either but I’m fairly sure it’s higher than the new plan monthly.
Now I need to find an identity insurance replacement or perhaps leave it. I think it’s not really part of the bundle and only about $2/mo. If this insurance pans out as equal coverage, I’ll go ahead and make that switch too.
Crash Budget: Food
This one is hard to guarantee. Spending on food is almost more of an emotional category so this is the one that isn’t so easy but can be impacted immediately. As I mentioned above, I am not currently working a 40-hour/week job so I have the time to spend on meal planning and preparing meals. I’m compressing by $300/mo just in the budget, but it wasn’t at all in control to begin with so I need to watch it weekly and have switched to more of a 10-day meal plan as that seems to match how long things work for me anyway.
I’m primarily eating meat and rice meals and I’ve stocked a snack bin that already has lasted more than a week because I ate every chip bag I’d had stocked up till now. I’ve gone out for food four times, twice paid for by family and the other times paid out of birthday cash. This strategy won’t work forever but hopefully will get me by until I’ve adjusted.
As I gain control of this and form the plan I will continue to try to compress to $360/mo which is supposed to be the high expense average single person’s food expenses per the Department of Agriculture, I believe. I’m not so sure this will work but even getting to $400 regularly would be huge. Here’s a post I did challenging myself to stay under or at $400 in January.
Crash Budget: Savings
So, in an emergency-type crash, which is what I’d designed, I stopped all savings which would be a safety net, travel, and retirement. This is because there is no income and your savings are what you are pulling from so there’s no benefit. It would be an illusion.
Crash Budget: Health Insurance
This is a beast! Health insurance is a mess and is very individual so it’s hard to say, but for me, I need low deductible and great specialist and specialty prescription coverage minus any discount programs for those prescriptions. Always check with the manufacturer as well as GoodRx about reducing the prices or offsetting the out-of-pocket expense.
For now, I’m shopping insurance and checking against my current prescriptions and doctors to find the best match but since it’s a partial year, this is going to be odd and next year will likely change which option is best.
The other point to note is the amount that was going to savings is now going to health insurance and health expenses.
So, I have compressed the budget from $2,500/month to $2,100/month for now. The crash budget shows I could bring it to $1580 if necessary so with the pending steps and pending the cost of health insurance I’m at $2,100 per month.
