The results of impulse saving month

Back in May, I decided to try a spending-reduction idea. I called it impulse saving month. I was to keep a log of items I resisted the urge to buy and tally my savings for the month.

In practice, I found it rather difficult to keep track of each item passed up, especially since I avoided shopping nearly altogether in order to reduce my exposure to temptation.

Since I didn't have that item log to gauge my efforts to reduce spending, I instead compared two months of receipts. I discovered that we spent $285.30 less in May, so I will therefore conclude that my little experiment was a relative success.

In addition, I found that I was more conscious of our spending habits in general during May, and I began researching some ways to shave from our monthly expenses. For example, by canceling some cable and TiVo services, we are now saving $30.95/month, or $371.40/year. And by increasing our home owner's insurance deductible from $500 to $1000, we are saving $150/year (I recommend having the amount needed to cover your deductible in an emergency fund, so that you don't have to feel like you are left to cross your fingers and hope nothing bad happens; you can also increase your auto insurance deductible in the same way, but I feel like we--read:I--make more claims on our vehicles than our home). That's $521.40/year right there!

Some other things that we are considering are automating our student loan to reduce the interest rate by 0.25%, reducing our anytime cell phone plan by 150 minutes which would save us $10/month, and canceling our gym membership and our XM satellite radio subscription, which would save another $44/month together (but our gym membership is paid through to next spring, and I'm a little partial to my XM :). And of course, we could further reduce our cable services, but we are pretty attached to our current channels for now.

I've also taken a very close look at our spending and found that we could be saving more than we are (in other words, we spend it if it's in the checking account), so I've increased our weekly automatic savings transfer by $50, which will save us an additional $2600 over the course of a year.

And finally, I decided to bite the bullet and diversify our IRAs from 100% fixed income to a relatively aggressive growth mix. I thought there would be charges to do this online so I had been dragging my feet, but as it turns out, the little "NTF" next to the funds that I had researched means that there are no transfer fees (duh!!). I am firmly in the camp of invest, diversify, and LEAVE IT ALONE. Being that we are relatively young, we can withstand some fluctuations for now. As we grow older and closer to retirement, we can gradually reduce our market exposure and risk accordingly.

None of these changes were very time-consuming and all were relatively painless. Be inspired! Start saving today!! A penny saved is far more than a penny earned. In fact with compound interest at 9%, that penny is worth 14 cents in 30 years. Not too shabby.

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