We’ve all heard the old saying live below your means. But what does this mean in the actionable sense? How does one actually go about spending less than you earn? Sounds simple to some, but for others (perhaps a significant portion of the population), it’s a tall order. The issue is that most people live their lives according to what their peers and friends are doing. If your co-worker is taking his kids on a Disney cruise, you should be able to do the same right? If you dig a little deeper, you may find that these vacations are financed through a line of credit rather than through savings. Don’t get me wrong, I’m a big believer in family vacations while the kids are young (and still willing to hang out with their parents). However, I believe that vacations are a luxury and should be funded through savings, not borrowed.

When you imagine saving money,  you may picture living a bare bones lifestyle that just doesn’t work for you. While some have taken saving money to that extreme, the point of this article is to show that saving money can be easier than you think.

The goal is not to cut out all the unnecessary fat from your spending, but to cut the fat from your largest variable expenses. Going after the largest recurring expenses in your monthly spending will give you the most savings with less effort.

It’s a simple concept that may take a bit of work initially if you don’t already keep track of your expenses. The bright side is that technology has made expense tracking a fairly easy task. For me, I funnel spending through a credit card for the points (I pay off the balance monthly), then use an online program like mint.com, to sort out all those transactions by category.

From there, I sort those categories by total. For us, our top five annual variable expenses include:

  1. Groceries
  2. Heat and light (locally, most houses use electric heat)
  3. Clothing
  4. Kids activities
  5. Gasoline

As we have recently become an one income family, we’ve had to take a serious look at our budget to make sure that our spending has remained within our means.  With that, our top two categories, groceries and electricity, were by far our biggest expenses.  In 2014, we spent $13,700 on groceries.  It physically hurt me to type that last sentence, spending over $1,100/month on groceries for a family of four is a bit on the excessive side.  On the bright side, it’s an easy target for reducing our overall expenses.

With less effort that anticipated, in 2015 thus far, we’ve averaged about $900/month in groceries which will work out to be an annual savings of about $2,400.  How did we do it?  We took the simple approach of going to the grocery store less often, being more mindful of sales, and wasting less.

Here are some articles that may be helpful if you are looking to reduce your grocery spending as well:

For electricity, last year we spent $3,780 on electricity which was a little higher than our historical average.  As $315/month for 1,800 sq ft of living space may not seem like a lot for some, it’s too high for my comfort.  The great thing is that the home owner has discretion as to how much electricity and electric heat is used.  With that, I applied to the local utility to have one of those wireless power meter readers installed.  These readers show electricity usage at any given time which has been a real eye opener.  Similar to spending, watching our power usage has made a difference.

Electric heaters really use a tremendous amount of energy to heat a room to a comfortable level.  To help reduce our usage (here is an article that I wrote on saving energy around the house), we’ve installed programmable thermostats throughout the house, set our comfort temperatures a bit lower (especially at night), and turned off heaters that don’t need to be on (basement exterior entrance).  As a result, our new equal payment plan for 2015 has been reduced to $215/month, which is a savings of $1,200/year.  Combined with the grocery savings, with very little effort, that’s $3,400 that can go towards a TFSA/RESP/RRSP contribution, or even to partially fund a Florida family vacation.

The message that I want to bring home is that saving a significant amount of money can be easy if you go after your big expenses.  Do you have a big mortgage?  Go after the best rate when it’s time for renew – it will save you thousands.  Do you eat out everyday for lunch and often suppers? Pick up a cooking class and aim to cook at least a couple times a night with the leftovers used for lunch the next day.  Do you need two cars?  Or can one spouse take public transit?

Now back to you, what are your biggest expenses? What strategies have you used in the past to reduce them?


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  1. Peter on November 16, 2015 at 9:49 am

    Groceries are a cost that can be looked at to reduce. Now everyone has their own monthly amount. It really is different depending in the age of the kids. Is there a guideline for each age if the family member? That way we can aim for that amount each month. Example, adults are $100 a week, where a kid age 8 is $75 a month, etc

    • FrugalTrader on November 16, 2015 at 2:27 pm

      Peter, I think that every family is different. I will admit that I eat a lot of protein which can get pricey. I think that a family of 4 living off $700 in groceries is a healthy target.

  2. LifeInsuranceCanada.com on November 16, 2015 at 9:54 am

    lol at you city slickers paying for heat :). We heat with wood, so it’s free. AND it heats me up about 4 different times!

    For our other heating systems, I always use programmable thermostats. You not only save money, but they make living more comfortable. Rooms are cool when not in use or when we want the cool (i.e. for sleeping) and warm when in use or when we want them warm (i.e. bathrooms in the morning). It’s almost like they’re worth paying extra for just for the benefits – the money saving is a bonus.

    • FrugalTrader on November 16, 2015 at 2:26 pm

      @LifeInsuranceCanada, you are tough! My in-laws use a wood stove, but purchase the wood in cords and chop it up themselves. I like the fact that it provides a nice heat throughout the house, but it doesn’t’ come without cost (time as well in cutting the wood).

  3. Tawcan on November 16, 2015 at 3:51 pm

    Groceries are something that we’re trying to reduce but with a growing baby, it might be slightly challenging. I need to spend more time to look into cutting down our heating cost somehow.

    • LifeInsuranceCanada.com on November 16, 2015 at 5:47 pm

      I don’t want to seem like we’re one of those outback frugal people – we’re not. But for groceries, in addition to shopping sales and price matching, we also buy our meat in bulk. Each year or so we buy a quarter of beef from a local farmer. Way better meat, and we get steaks, roasts, and everything for less than the cost of hamburger. (and we get bonuses like soupbones, heart, liver etc for free. If you’re into those kinds of things).

      Like the programmable thermostat, it’s cheaper AND better.

  4. Emily on November 17, 2015 at 4:01 pm

    I just recently did this exact thing and groceries was an area I sought to improve. With that said, I think it depends on where you live to get the cheapest groceries. Before trimming the budget, for a family of four (children 4 and 6), we were spending under $500/month on groceries. We shop at multiple stores to get the best price and don’t buy unless an item is on sale. When we lived in Halifax my bill wouldn’t have come close. I live in Ontario now, and groceries are so much cheaper. We are about to add baby #3 to the family so that number will spike for sure!

    • FrugalTrader on November 17, 2015 at 4:21 pm

      I’m impressed by the $500/month grocery bill! We live in Newfoundland and I suspect that groceries are even more expensive here than Halifax.

      Congratulations on baby #3!

  5. Cool Koshur on November 22, 2015 at 7:39 pm

    When it comes groceries, Price matching is way to go. You pick flyers and goto nearest store. It will save u time and gas. Second buy non-perishable items in bulk when they go on sale. Put on extra layer of clothes/blanket and reduce your heating. Brown bag your lunch.

    This can go to a limit. Everyone’s biggest expense is taxes, there is hardly anything left after mortgage/rent, groceries, gas, auto loan, insurance, utilities. I don’t mind paying my share of taxes. But after paying Federal, Provincial, Property Tax, HST, eco tax, capital gain tax, gas tax, etc…There is no meat left on bone to eat.

  6. Andrew on November 27, 2015 at 11:53 am

    This billionaire is the credit card points king. Proves that no matter if its day one of “you’re” million dollar journey or you are at the billion dollar journey level, you can do more with your money @ every level http://www.theglobeandmail.com/report-on-business/international-business/asian-pacific-business/billionaire-buys-famous-painting-with-amex-card-gets-tens-of-millions-of-reward-points/article27437501/?service=mobile

    • Adam on December 16, 2015 at 2:17 pm

      Is “you’re” in quotes because it should be spelled “your”? Or is it because you are trying to emphasis it? I gotta know!

  7. Jungle on November 28, 2015 at 1:15 pm

    I always try to remember the saying “penny wise, pound foolish” when trying to find new or more ways to save money. Like you said, tackle the big stuff first and it will make more of an impact.

    As mentioned about, usually biggest expenses are taxes, car/transportation, mortgage, food, utilities, so on.

  8. Jungle on November 28, 2015 at 1:21 pm

    Trying to save on grocery can be a battle with a growing family and two parents working full time. Time to make dinner, lunches, grocery shop, organize your list, etc, can feel tiring some weeks, so it’s easy to choose convenience foods over savings and making everything from scratch.

  9. Jonathan Hill on December 1, 2015 at 11:31 am

    Managing a grocery budget can feel like an uphill battle. I appreciate you sharing how your family has been saving in realistic ways.

    I also find that automating your savings is the best way to ensure you’re saving for your future. I wrote about it on my most recent blog post:

  10. Jess @ Best Credit Cards Canada on December 3, 2015 at 9:46 pm

    A huge savings for my husband and me was switching from public transit (using a monthly metropass) to cycling all over the city. We couldn’t believe how easy and efficient it was. Cycling is usually faster and is not held up by subway/streetcar delays! We also found that it got us in to shape quicker than the gym was because it just became a part of our lifestyle rather than being a forced activity (I don’t want to go to the gym!!!) so we gave up our gym memberships. Huge savings and we are so much happier :)

  11. Mermaid3011 on December 7, 2015 at 5:14 pm

    Thanks to everyone for your valuable input and ideas. It’s very inspiring to read what others do and how they work out their budgets.

    I just spent the first weekend “couponing” at the Grocerystore and looking through my budget to find a few more things I could cut down without losing too much “value of living”. And it’s surprisingly a lot of fun!

    I also found this app called “checkout51” – they offer online coupons in a different way. After buying certain products (that changes weekly) one loads the receipt from the grocery store into the app, clicks the products and refunds to claim and a few hours later your online account is credited with the coupon value. Once you hit 20$ you request a cheque to be sent. Actual money! Love it!

  12. kejing on December 15, 2015 at 7:53 pm

    I think it all depends on a person’s priorities when it comes to saving money. For example, I like getting my daily coffee/tea at Starbucks, and I’ve read many articles that talk about saving hundreds of dollars a year if I just go to Starbucks less. However, some of these people won’t spend the time to learn about the car buying process, or the house buying process, and they don’t spend the time to shop around for the best mortgage/finance rates possible. At the same time, I get my daily Starbucks and I don’t feel guilty about it, and when it comes time for a big purchase, you bet I spend lots of time going over the purchase documents, shopping around for rates, negotiating the hell out of the salesman to get the best deal possible. I can save thousands in a matter of a few days.

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