Wednesday, March 23, 2011

Budget Holdouts

Everyone has a few of these. A couple of budget categories where you know you spend more than you should or maybe need to spend. There might be any variety of reasons why you do this. You may value whatever you’re spending on highly or believe that you cannot do without it.

For me, the two items that we haven’t cut significantly are our cell phones and our cars.
We’re stuck in our current cell phone contract until this summer. There is no way to reduce it right at this minute. But we’ve also been playing around with the idea (primarily before I decided to quit) of upgrading to smartphones. My husband and I both could use them for our jobs. I’ll no longer have a job soon and thus won’t need one. My husband would still really like one. The difficulty is that the data plans run around $25 on top of our regular plan. We could reduce our plan. We upped our minutes last time but have since found that we’re not using nearly that many minutes anymore. But we also cut our land line. We’re relying on our cell phones now for all of our calls. I’m going to try to reduce our bill from $89 back to $65 if possible after the summer. That is assuming that I can dissuade my husband from the smartphone. Hypothetically we could cut things further: use a prepaid service or maybe go down to one phone. Those are sacrifices that we’re not quite willing to make yet.

The cars. Well, last year our old 1995 Saturn was on its last leg. I was switching from working five days a week to four, which meant that my husband would be picking up our daughters two days a week. The old car wasn’t reliable so we decided to replace it. I did a lot of research and we bought a great late model used Mazda5. We took out an auto loan with a good interest rate. At the time, it seemed quite rational to take out an auto loan on the car. We wanted to get a good dependable car that met our needs. Quitting my job wasn’t on the radar back then. We have a little less than four years left on our auto loan. All together, we spend close to $450 a month to keep my car running and insured. That is no small amount of money by any means on our new budget. The reason that we want to keep two cars is that it would really limit my options for work in the future and limit what I can do with the girls during the week. I’m not attached to our car in particular. We could sell our car and eliminate the monthly payment. We may end up owing a little or might break even. But, we would need to pay cash for a used car. Even paying a couple thousand would be a strain on our savings. We may do this at some point if we determine that we need the monthly cash flow to make it work. We may even go down to one car for a time. We’ll cross that bridge when we come to it.
What are your budget holdouts?

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