• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Home
  • About
  • Disclosure
  • Disclaimer
  • Privacy Policy

Military Dollar

Simplified personal finance for military members

  • Military Money
    • Military Members Start Here
    • Blended Retirement System
    • Retiring On A Military Pension Case Studies
    • Thrift Savings Plan
  • Financial Basics
    • Investing Series
    • Taxes
  • Financial Independence
    • Financial Independence
    • Early Retirement
  • Budget Travel
    • Travel Hacking
    • Credit Card Churning
  • Miscellaneous
    • Summary Sunday
    • Q&A
    • Real Estate
You are here: Home / FIRE / That Day I Slashed $1000 From My Monthly Budget

That Day I Slashed $1000 From My Monthly Budget

October 11, 2017 MilitaryDollar 2 Comments

DISCLAIMER: I received feedback that this post was confusing. This post is about a poor budgeting method I used to use that resulted in a lot of unneeded money sitting in my bank account, which I then spent because, well, it was there to be spent. It is not a list of ways to reduce expenses.

If you are looking for tips from frugality bloggers, I recommend checking out these 2017 Plutus Award nominees in the Frugality category:

  • Busy Budgeter
  • Club Thrifty
  • Frugalwoods
  • Money Smart Family
  • She Picks Up Pennies

If you’re interested in learning how I learned to spend less by just budgeting better, read on!

A few months ago, I wrote about Why I Want To FIRE. If you aren’t already familiar with the concept of FIRE, I recommend reading that first. In that post, I mentioned doing an overhaul of my budget and realizing I was spending over $1000 per month on things I didn’t really care about. This was after I’d already discovered FIRE. After I already thought I was saving and investing as much as I could. And after all of my friends and family already thought my budget was way too tight.

Let’s think about that for a moment. My friends and family already thought I was cheap, on a budget that I determined was wasting $1000 per month on junk. It’s weird the way different people can perceive the same thing.

Anyway, I promised in that post that I’d go through the details of that budget overhaul in a future post. And since I’m rereading Your Money Or Your Life right now, it seemed like the perfect time to do it. Why? So you can see exactly where and why I slashed more than $1000 per month from my own budget, and hopefully it will inspire you to do something similar with yours.

Let’s dive right in!

$1000 per month

How I Slashed Over $1000 Per Month From My Budget

Note: Both budgets I’m going to show are post tax and after accounting for savings, investments, life insurance, and some charitable contributions. All money I saved by reformatting my budget went towards FIRE. These are my real 2013 budgets, before and after I slashed the budget.

Why yes, I am a dork that keeps a record of past year budgets. Thank you for asking.

(If the font on this image is too small, don’t worry. You can click on the budget detail images that follow to see larger versions)

$1000 per month

The difference is $1,092. $1,092. Each month. That’s $13,104 each year that I was spending and didn’t need to or really even want to spend.

Remember: nothing in my life actually changed. I didn’t move, or eat less or cheaper things, or go out less. At least, not enough that I or anybody else noticed a difference. I just stopped overbudgeting and then mindlessly spending the excess amount.

Let’s look at the details.

Housing

$1000 per month

This is the area in which I saw the smallest change. No surprise there – since I didn’t change my living situation at all, I realistically shouldn’t have seen any budget change either.

But of course I did, and here’s why: my previous budget was based on fear.

In college, I sometimes struggled to pay my bills on time. I always made it work, but in order to do so I sometimes had to move money around in my budget to make sure the lights stayed on. Once I started earning a steady, good salary, I never wanted to stress about that again.

My method for making sure I’d always have enough money to pay the bills was to overbudget anything that was possibly variable. The electricity bill is usually about $90, but once it was $130? Better budget $150 just in case. Same for everything else.

The mind is fascinating, isn’t it?

Of course, sometimes the bill was higher than normal. But I was always budgeting even more than the high number. This meant I always had excess money in the budget. And that would have been okay, if at the end of the month or quarter I’d said to myself “time to transfer that money into my investments!”

Nope. That’s not what happened.

I did what so many of us do. I rewarded myself for good behavior. All of that “excess” money went into my spending money. Yes, that category that was already bloated got even bigger. But we’ll get to that in a second.

Transportation

$1000 per month

My transportation costs weren’t too out of whack, with the exception of my future car savings. That one had gotten out of hand.

Here’s what happened. In 2007, I paid off my Lieutenant Mobile. For my civilian readers, that’s one of the nicknames people in the military use to describe the car they get when they enter the military and start “earning the big bucks.” For most of us it’s the most money we’ve ever earned, and the banks and car dealerships are more than eager to help us get a shiny new car to go with our shiny new rank.

When I paid that car off, I swore I’d never have a car payment again. So I started putting money away so I could buy my next car in cash. Every month, I’d dutifully sock some money away for expressly this purpose. But after 6 years of this, I didn’t need any more money in this savings account. In fact, I probably had more than I needed, since I was pretty sure I’d also only be buying used cars from that point on.

So it was easy to find some extra money here. Yeah, okay, maybe I wasn’t really moving it from “spending” to “saving” since it was already savings. But if I’d kept growing that fund, I would have continued to have a sizable chunk of the budget going into a piddly savings account instead of a nice investment account. Plus, I probably would have ended up buying more car than I needed since I “had the money.”

Instead, that money went into investments, and has earned a pretty penny ever since. Nice.

See? Sometimes you can save too much…if you should be investing instead.

Other Spending

$1000 per month

Finally, all the other stuff I spend money on. As you can see, most of the problem here was simply budgeting to spend more than I really needed to spend in order to be happy. But since the money was in the budget, it just got…spent.

Honestly I don’t even know where a lot of it went. Name brand clothing, definitely. I still have name brand items I’ve never worn, or barely worn, from this period. I’m slowly getting to them as I wear out other stuff, don’t worry. And…maybe some extra movies? A few too many desserts? Tchotchkes I care nothing about that are just creating clutter? Probably.

And remember, I had extra spending money coming in from the excess budgeting for utilities. So add another $50/month ($600/year) or so to this ridiculousness.

All spent on crap I don’t even remember. Ugh. So much money wasted over the years. So much more that could have been done.

What I did with the money I saved

With all the money I freed up in my budget, I was able to dramatically increase my FIRE efforts. For awhile, I put about half of the saved money into paying off my rental property early. I eventually stopped doing that, but it was fun seeing the balance drop rapidly for awhile. Well, as much as a mortgage balance can drop rapidly.

For the rest of the money, I put it into my TSP and taxable account. I wasn’t yet familiar with the concept of substantially equal periodic payments or I would have started maxing out my TSP at this point. Oh well. No use crying over taxes I’ve already paid.

You’ll also notice that I dramatically reduced the amount of money I need for income each month…which means I’ve made it easier to FIRE. Using the common 4% withdrawal rate rule of thumb, you need $25 in savings for every $1 you plan to spend annually in retirement. $1,092 per month is $13,104 per year. $13,104 times 25 is $327,600. I  saved myself $327,600 worth of effort! Just by not spending money on stupid crap! Imagine how many hours of my life I earned back!

My Challenge To You

Now that you’ve seen what I did, my challenge is to review your own monthly budget and see if there are a few categories where you might be overbudgeting. If you identify any categories where you are overbudgeting, or even some where you think you might be, switch up your budget. Make it reflect something more realistic. If you can, stretch a little and reduce it to just a little bit less than you think is realistic. Then set up automatic transfers from your checking account into a savings or investment account for your new found “extra” money.

Don’t let it fester in your bank account and your budget, because you will find it missing at the end of the month. Get rid of it from the beginning so you aren’t tempted to spend it on things you don’t need.

If you need some motivation in the form of a challenge or competition, check out David’s October Zero Day Challenge. He’ll get you on the right track, help you stop spending money mindlessly, and maybe you’ll win a prize!

But you don’t have to do a formal challenge to do this. Literally all I did was sit down with my budget one Saturday and dedicate a few hours to really thinking through my spending. A few hours later, I’d magically eliminated over $1000 in spending each month and dramatically increased my ability to reach financial independence in my 40s.

I want to hear from you! What spending categories do you think you could reduce in your budget? What would you do with the money? Have you already reviewed your budget and lowered your spending? Has anybody else lowered their spending by $1000 per month or more? Tell us about your successes in the comments!

Share this:

  • Click to share on X (Opens in new window) X
  • Click to share on Facebook (Opens in new window) Facebook
  • Click to share on Pinterest (Opens in new window) Pinterest
  • Click to share on LinkedIn (Opens in new window) LinkedIn
  • Click to share on Reddit (Opens in new window) Reddit
  • Click to email a link to a friend (Opens in new window) Email
  • Click to print (Opens in new window) Print

Related

FIRE, Miscellaneous Budget, Financial Independence, FIRE, Frugal Living

Reader Interactions

Comments

  1. Mrs. Kiwi says

    October 11, 2017 at 9:49 pm

    It’s amazing how much money just disappears out the door! Such a good exercise! We don’t budget exactly, but we do review all of our expenses every month (or at least I do). Tracking our spending has helped to eliminate all of the places that money seeps out each month!

    Reply
    • MilitaryDollar says

      October 11, 2017 at 9:53 pm

      Absolutely! I used to track every penny on a daily basis. Now I’m much more relaxed about it, but I still try to reconcile my budget at least once a month. It helps me stay on track, plus it’s a great way to catch bank errors – or worse, identity theft!

      Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Primary Sidebar

Rockstar Finance

Want exclusive content? Join the cool kids club

Subscribe to the Military Dollar Newsletter

* indicates required
Are you a U.S. military member?
  • Facebook
  • LinkedIn
  • Pinterest
  • Twitter

Hey, do you have any information about…?

Latest Posts

  • Free Real Estate Tracker Printable March 25, 2020
  • Traditional vs Roth: Social Media Saturday March 7, 2020
  • Create Your 2020 Financial Plan December 23, 2019

Search the Archives

Tags

Blended Retirement System Blogs Books BRS Budget Budget Travel Charity Combat Zone Credit Credit Card Churning Debt Early Retirement Emergency Fund Finance Fridays Financial Independence FIRE Frugal Living Investing IRA Military Allowances Military Benefits Military Mondays Military Pay Military Retirement Podcasts Printables Q&A Real Estate Retirement Roth Savings Side Hustles Social Media Saturday Summary Sunday Tax-Advantaged Taxes Thrift Savings Plan Traditional Travel Travel Hacking TSP Values Veterans

Recent Posts

  • Free Real Estate Tracker Printable
  • Traditional vs Roth: Social Media Saturday
  • Create Your 2020 Financial Plan
  • Financial Things I’m Thankful For
  • Air Force Financial Readiness Training Debuts. How Is It?

Recent Comments

  • MilitaryDollar on Off Duty Employment for Military Members
  • MilitaryDollar on 80+ Things You Can Learn From Your Leave and Earnings Statement
  • 10 Things To Know About Money and Deployment • KateHorrell on Tax Considerations in a Combat Zone
  • Angel on 80+ Things You Can Learn From Your Leave and Earnings Statement
  • dp on How To Make Car Camping Comfortable And Safe

Archives

  • March 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017

Categories

  • Budget Travel
  • Finance Fridays
  • FIRE
  • Investing Series
  • Media Reviews
  • Military Mondays
  • Miscellaneous
  • Q&A
  • Retiring On A Military Pension
  • Social Media Saturday
  • Summary Sundays

Meta

  • Log in
  • Entries feed
  • Comments feed
  • WordPress.org

Footer

Search by Category

Find me on Facebook

Find me on Facebook

About me

I am a USAF officer who is passionate about personal finance, financial independence, and teaching. I’m hoping to teach you that personal finance can be simple, rewarding, and – gasp – sometimes even fun!

Copyright © 2025 · Daily Dish Pro on Genesis Framework · WordPress · Log in

← Summary Sunday for October 8th, 2017 ← Net Worth: What It Is And More Importantly, What It Isn’t
 

Loading Comments...