Now that he has an Initial Budget in place, Tom can analyze his current spending to help determine which expenses can be trimmed to make better use of his income.
Some of the changes require some research, but many of the changes are easy to find. Let's take a look at the decisions Tom makes.
In the Home Section:
- Tom calls his utility provider to see if they offer any payment plans. The provider does, so Tom enrolls in a utility budget plan that distributes the cost evenly over the year. By dividing his yearly costs evenly over 12 months, Tom saves $40.
- Tom also calls his phone company to see what calling plans are available. He finds one that better fits his local and long distance needs, saving him $20.
- Tom realizes that he doesn't really need high-speed Internet service, so he downgrades to dial-up service and saves $15.
- Tom reviews his current cable package. He has a pretty active lifestyle and never has a chance to watch most of the channels he's paying for. He downgrades to the basic cable service package and saves $25.
- Tom picks up the Sunday paper rather than pay for home delivery. He begins making his coffee at home and cutting coupons. He also gets a shopping savings card, and purchases generic products. Though individually small, these cost-cutting measures save Tom $50.
In the Travel Section:
- Tom increases his insurance deductible and saves $25.
- He signs up for an electronic toll collection system that offers a discount. This saves $12.50.