Budget hacking was not a term I had ever heard of before and to be honest, I’m still not sure if it’s actually a term or if I just made it up. Either way, it has completely changed our lives and our finances forever. After living on only my husband’s full time income for a decade, we decided we were tired of falling victim to financial struggles and living paycheck to paycheck. When we started this journey I had no idea we would be able to budget hack our way to over an additional $3,000 per month in our budget! Here’s the break down of how we made it happen.
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Know your numbers
Making sure you know where all of your money is going is crucial before you can start hacking your budget.
Ditching the paycheck to paycheck life
If we haven’t been introduced before, let me break it down for you.
We bought a big house, we decided that
This was the starting point for our budget hacking way of living. For the first time in a
Making a clear plan for the future
Before we could begin budget hacking our way to financial freedom we had to get clear about what we wanted in our lives. We already knew what we didn’t want.
What we didn’t want:
- To constantly struggle
- Live paycheck to paycheck
- Spend our time maintaining a large home
- To spend most days at home
- Money fights to ruin our marriage
What we did want:
- Secure savings for retirement
- Emergency savings
- To be debt-free
- Travel with our kids
- Have fun in our daily lives
- Giving to others without worry
- A great, thriving marriage
Planning your dreams together as a couple is one of the first steps in succeeding with budget hacking.
A cheaper mortgage payment
Downsizing our house meant a savings of $700 per month on our mortgage payment alone.
Now, I know what you might be thinking: you CAN’T downsize or you don’t WANT to downsize — I know and that’s why I’m talking about this step first. Because it’s a drastic one and isn’t suitable for everyone!
Sometimes refinancing is a great option to lowering your monthly payment expenses and your overall interest rate on the loan of your home.
There are however some things you need to know before you refinance.
Make sure you are working with a loan officer you know and trust, Lending Tree is a great place to get started and you can get a quote without leaving your house.
Get a quote now.
Becoming debt free
The day Tom and I became officially debt-free (except our mortgage) was a really weird day. For the first time in my entire life, I felt completely free to dream!
I no longer felt limited by money. My dreams all felt so much more possible and a weight was lifted off my shoulders.
Have you ever taken a moment to just figure out how much more money you would have each month if debt were no longer an issue? Go ahead, calculate it!
For us, paying off debt freed up an average of $1,030 per month! We paid off things like:
- Car payment
- Credit cards
- Loan payments
- Hospital bills
- Student loans
How to pay less in credit card interest
There are 2 major ways I recommend not only reducing your monthly expenses but the overall interest you pay when it comes to things like credit cards.
- Get a lower interest loan
- Negotiate lower interest rates
Lower interest loan
When we started paying off our debt this is the route that we chose. Our credit card interest rate was a whopping 25% and we were able to lower it to 11% by taking out a loan. Get a FREE debt consolidation quote.
Negotiating your credit card interest rate
Negotiating is a scary word when you are a recovering people pleaser like I am! If it makes you nervous too, I’m here to tell you not to let that fear stop you from negotiating!
I have scoured the internet and found some of the best negation scripts (including credit card interest) and am giving them to you for free!
Negotiating monthly payments
Just like you can negotiate credit card interest rates, you could be negotiating the cost of your fixed monthly payments in order to help you save more money.
Here’s a quick look at the bills we lowered and how you can too.
We found that making one trip to our gym each day was taking up 45 minutes of our time — which is a lot when you’re also a homeschooling family! On top of that we were paying $130 per month for our entire family and were barely making it because of the time crunch!
Finding a cheaper gym – We were able to reduce our monthly costs by $70 when Tom and I took out individual memberships at a gym that did not have child care. Yes, we sacrificed some of the perks, but like I said, we weren’t really able to take full advantage of them either.
Workout at home – Some people, unfortunately, let their memberships come out every month and don’t even use them! Instead, try setting a goal to walk a few times per week or get download an app that lets you workout from home. Get 30 days free on the
Try daily gym passes – If you aren’t totally ready to give up your gym membership, take a moment to calculate if a daily pass might be more affordable for you. For example, if you’re paying $69 for a membership per month, but are only making it 4 times per month, maybe the $10 daily pass ($40 per month) would be a better way to save money?
Phone bills can be one of the biggest budget drainers out there! Thankfully, I was recently able to reduce our monthly expenses by $40 per month on our plan with 3 phone lines!
Tips for lowering your phone bill:
- Negotiate with your company for a lower rate
- Eliminate some of your add ons
- Opt for automatic payments (this reduced our cost by $15 per month)
- Avoid phone payment plans (paying mine off saved $25 per month)
- Try a pay as you go provider (starting at $10 per month)!
Want to cover all your bases?
One of the best budget hacking apps is called Trim.
Trim works by reviewing your spending habits each month to find different bill payments where you could be paying less each month.
Within 20 minutes of downloading Trim, they notified me that I could be saving over $20 per month on a lower internet bill!
Subscription memberships are all the rage. So much so that we tend to pile them on without realizing the wasted expense.
As obnoxious as it sounds, I realized I had been paying for an Audible monthly membership for 7 months!! I had signed up for a FREE trial and then never canceled it! At $15 per month, that’s a total of $105 I spent on absolutely nothing!
Creating passive income from home
The absolute best thing I did to help budget hack our way to more money each month was
I did this in 3 ways:
$1,000 passive income blogging
Creating the blog has allowed me so many freedoms. Like making $500 I one week when I didn’t work at all! If you have ever wanted to learn how to make money through blogging, start with my Blogging Basics course that will take you through all of the beginning steps of starting a successful blog!
When I say I make $1,000 passive income per month that means money I really don’t have to work for through advertisements on the blog.
I also earn money through my own products, affiliate marketing and the occasional sponsored post.
Where we spent more money
When going through our budget, I see that insurance is the one area where we are actually spending more money than we used to.
We spend more on insurance because:
- We want to ensure our kids are protected if Tom or I die. Get a fast quote for life insurance.
- In the event of disability, we don’t want to experience financial hardships. Get disability insurance starting at $9.
- If our home or car requires repairs, we want to get the most coverage we possibly can which is why we got umbrella coverage as well.
What to do with your extra money
Once you have worked your tail off and taken the steps to get more money out of your budget, it’s so important that you make a budget that works and then stick to it!
Here is a quick breakdown of the financial moves you should be making every month to help improve your life.
- Contribute to your 401K or retirement
- Automate saving to an emergency fund (we use Capital One 360)
- Save automatically for big events like vacation or a new car
- Reduce the areas of your budget that don’t matter as much to you
- Allow yourself fun money each month
- Plan where your money will go and stick to it