Some places to trim the budget

When I work with clients to set up a new budget, we start with their budget template, deciding on the categories and category groups for their new budget. Then we add targets (sometimes we add categories and targets at the same time). The last step is to link their accounts and assign the money they have in their accounts.

After we’ve set up all targets, we look to see what the sum of the targets is. Here’s how: making sure no boxes are checked, look at Underfunded in the right sidebar on the web app. (If you don’t see it, click the little arrow next to Auto Assign to expand it.) The number that appears there is the sum of the targets.

This is a big moment and it can be a big wake-up call if the targets exceed the money coming in. When that happens, you have two choices: Bring in more money or trim your budget.

Here are some categories you might consider low-hanging fruit to eliminate if you’re trying to trim your budget:

• Streaming subscriptions. (I like to have a category group for subscriptions to easily keep track of them.) Think about what you actually watch/listen to regularly. Can you let go of the others?
• Cable bill. I dropped cable television in 2012 and haven’t even been tempted to go back. And I watch a lot of TV. If you have good internet, perhaps your streaming services can replace your cable TV and save you more than $100 a month.
• Cell phone bill. Are you paying for your adult kids’ cell phones? I suggest dropping them from your plan or asking them to pay you back every month. (You could invoice them via Venmo.) Examine your bill and see if you’re paying for things you don’t use, like a monthly fee for an iPad cell service.
• Land line. Do you need a landline telephone? I got rid of mine in 2012 (that was a big year for me for cutting costs) and don’t miss it one bit. In fact, being without one has simplified my life.
• Memberships. Take a close look at your memberships. Are you benefitting from them? Consider letting go of the ones that you don’t actually use.
• Gifts. Can you trim your gift list? Or find less expensive ways to show your love?
• Insurance. When was the last time you price-checked your car or homeowner’s insurance? A few phone calls could result in some savings.
• Eating out. Most people are surprised at how much they spend eating out. Perhaps lowering your target for eating out will help you make more mindful decisions about how you eat.
• Fitness costs. Do you need that Peloton subscription? Or the gym membership? Or the personal trainer? Are there perhaps lower cost options for you to stay fit? Taking a close look at what you’re spending–and what you’re using–might help you save some money while staying healthy.

It’s not an easy process, but it’s necessary. And it’s not a one-time thing. As you use YNAB longer you’ll become aware of non-monthly expenses that you didn’t remember when you set up your budget. I urge you to cancel the ones that don’t serve you!