Type A Minimalist made a very good post in regards to “The Proper Care and Feeding of Money” and various methods they used to get out of debt and save money. Specifically I really enjoy their explanation of thinking about expenses in terms of year totals in order to really see the big picture.
I was spending $4464 per year on things I really didn’t need. I eliminated all of those things and *decreased my power bill to around $1000 per year by turning off lights. I also pay all of my insurance in one lump sum in January so that I don’t have those extra “convenience” charges. I stopped coloring my hair because that’s just something I no longer need to do. So basically I’m pocketing an additional $3400 a year by cutting out extraneous spending. And this is all before we calculate the savings from only having one car. That’s where we really see the savings!
Part of the reason I always so strongly advocate tracking your expenses is for this very thing. You really get an idea of the “big picture” on how much money you are wasting. Knowing you waste $50/month is not as intimidating or full of shock value as knowing you’re wasting $600/year. This method also helps you figure out where you could try to reduce certain expenses, such as electricity in the example above. Or for me, it was Schwans food delivery service, which I spent almost $3k in two years on, and that was a completely unnecessary expense!