How two simple changes of habits are saving me more than $2700 a year

It’s a bit late for new year’s good resolution, but I didn’t have a choice: lots of things changed for us this year, and I needed additional data before I could commit myself to reducing expenses one way or another.

My family just moved from Japan to the US. That’s a very big change, and it involved lots of changes in our expenses. In this article I’ll show you where and how I cut $2700 in yearly expenses with 2 very simple changes. You do not need to change countries to do these improvements for your wallet: as a matter of fact, I could have done those back in Japan, but I just happened to have the opportunity to do these changes as part of a bigger one.

Here’s what seems to be the trend so far:

Phone bills divided by two

Me and my wife’s phone bills back in Japan were about $120 for the two of us. We both made the commitment to reduce those expenses, and went with T-Mobile’s $30 “unlimited data” prepaid plan. We had to buy new phones as part of the international move (our Japanese phones were carrier locked), and went with 2 relatively inexpensive solutions. I’ll describe all of these in details in another post. I also found that buying T-mobile minutes in “bulk” (100 minutes instead of 30 minutes) can help to reduce the monthly fee. Overall, we’re at about $60 per month for two. That’s $60 less per month, or, in other words, our bill cut in half.

  • Previous phone bill for 2: $120/mo
  • New phone bill for 2: $60/mo
  • result: $720 saved per year

Rent and daycare slightly increased

Ok, I’m going to cheat a little bit here, and count our rent and the kid’s daycare in the same group? Why? Well, we found that daycare in this part of the US is prohibitively expensive (private schools offer programs close to $1500 a month for 4 days a week. By comparison, the same offer in Japan cost us $500 a month), and after discussing, we’ve decided that my wife (who’s a stay at home mom) would take care not only of the youngest, but also of the oldest kid (the one who used to go to daycare in Japan, do you follow?). As a counterpart, I committed to find a good apartment in a good neighborhood, since she’d have to spend much more time with the kid, and with limited mobility.

  • Previous rent + daycare: $1400+$500 : $1900/mo
  • New rent (no daycare):$2000/mo
  • result:$1200 lost per year

It’s interesting to see how a slight increase in our “roof” expenses completely voids our efforts to cut the phone bill. But this is not a lost battle: we’re living in a better place compared to what we had in Japan, walking distance from my office, and we did not significantly cut our phone enjoyment: we just went with a plan much more adapted to us. What I’m trying to say is that just because we have this big additional expense for the apartment, doesn’t mean we should start spending more on the tiny things.

Food & groceries dramatically reduced

Eating out can cost you a lot. When I was working in Japan, I would buy my breakfast and lunch in the office’s cafeteria, or in convenience stores. The cost for me was about $10 a day, $200 a month. The food wasn’t even very good for my health, which is another problem on its own.

I’ve decided this year to eat breakfast at home and prepare my own lunch (something I can afford to do with my new schedule since I live closer to the office), which is not only healthier, but also much, much cheaper. Because the food I eat for lunch matches what we buy at the supermarket in bulk, its cost barely registers on our monthly bill. But I estimated it to be roughly an additional $30 a month. That’s $1.5 a day, counting 5 days of work a week. Bottom line is, I save $200-$30= $170 a month.

  • Old breakfast+lunch routine: $200/mo
  • New breakfast+lunch routine:$30/mo
  • result:$2040 saved per year

When all is said and done, this year I see a saving of about $1000 a year with those three ongoing changes. We could move to a cheaper place, and we’ll discuss that, but for now I feel we’re in a good place (both financially, and the condo).

I still need to understand where we stand in terms of transportation. Our city in the US offers good public transportation as well as convenient car sharing services, so we feel for now we can do without a car. If that holds true, that’s additional savings I can add to my list.

What matters in this article though is that I found 2 reasonably easy changes to bring to my life in order to save more than $2700 a year. These changes had nothing to do with me changing countries by the way, and anyone could do this. It’s been mentioned on other blogs before, but it is a good exercise to look at some of your habits, and how you can slightly tweak them to dramatically reduce your expenses. You might find a cable bill you don’t really need anymore, a service you haven’t used in ages that you keep paying for, or a more appropriate and cost effective plan for you.

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