Focus on the Big Expenses with Rachel Wester

by Virginia Elder | Nov 9, 2020 | Household | 0 comments

While most of the financial advice out there tends to focus on trimming the small or, dare I say frivolous, expenses (ahem, Latte Factor), it’s really important to make sure that your big decisions and the big expenses that come with them are inline with your financial goals. It’s forgivable to overspend by $100 at Target (whoops!) but nearly impossible to recover from a multi-thousand dollar mistake like, say, maxing out your purchase power in the residential real estate market.

Listen on iTunes | Listen on Spotify | Listen on Stitcher

When you find yourself saddled with not only a hefty mortgage but mountainous maintenance and repair costs as well, it’s time to get creative. A good rule of thumb is to expect (i.e., save) 1-2% of your home’s value for unexpected repairs and maintenance each year. So if and when those expenses are eating at your budget, exceeding this 2% guideline, and, no matter how much you repair, fix, or maintain, you never feel like you’re making any progress, it’s time to explore some options.

Focusing on the big expenses (like housing costs) and the monthly must-haves (like electricity and other utility costs) you may find more impactful long-term savings than if you’re just trying to spend less on dining out or Amazon. What are some expenses you’re going to have, no matter what, and how can you reduce those so you and your money can be free to do what you really want?

Fundamental Changes

No matter what type of change you’re after, whether it’s health, financial, or mindset related, something fundamental has to adjust permanently. When it comes to the budget, sometimes that financial/behavioral shift has to do with what stores you visit, the frequency at which you visit them, and whether or not you have a list. In this case, though, we’re looking at the big items, with potential savings worth thousands of dollars a year.

As an example, if you’ve bought a home or if you’re planning to, it’s important you add up the true cost of ownership. This includes lawn or pool maintenance, energy usage, repairs, HOA fees, homeowners insurance, maintenance, and remodeling/updating. If the home is beautiful, and you can afford the payment, but the attic needs insulating and then the water heater floods the place, do those extras fit within your earning power too?

It all comes down to priorities and your personal feelings about your home location, aesthetics, and structure, but if the total cost of homeownership is too far above and beyond what your budget deems affordable, it’s time to create a solution. That could involve a move, a refinance, renting out a room, or some creative financial reset button.

Reducing the Obligatory Monthly Expenses

If you’ve already reduced the “extras” in your budget or don’t want to, it’s time to focus on the monthly must-haves and see if you can get the same (or better!) services & products for a reduced cost.

If you live in Texas, you can shop your electricity rates yourself by using www.powertochoose.org and paying special attention to your electricity contract end-date and terms. Whenever your contract is almost over, sort through your options based on usage, contract length, and price and make the switch to save before you get auto-rolled in a month-to-month deal at a higher rate with your current provider.

Catch the YouTube

If you “ain’t got time for that,” ‘cause, you’re a busy mom, duh, and you live in Texas, consider using a service to do the leg-work for you like www.energyogre.com. For other monthly bills like phone, internet, cable, and more, check out www.billshark.com. They only take a little commission IF they find savings for you. If you have a monthly expense that you need or won’t cancel, there’s likely a reduced rate if you call them or a service that will do it for you.

But Kids are Expensive

Next on the must-have monthly costs is probably a category or two pertaining to the kiddos. As beautiful as their little faces are, I know you still want to save money here.

So, the number one recommendation is to shop resale. Yup! I said it! Get those tykes used clothes, toys, and games ‘cause, let’s be honest, they’re going to destroy it anyway. I just shared about our shopping trip to Once Upon a Child, a local children’s clothing resale shop, where we got both kids an entire winter wardrobe – I’m talking a garbage bag-full of name-brand, high-quality clothes, plus coats for each kid – for $200.

On the podcast, Rachel shares that she got a basically new bike for one of her kiddos for just $12! Maybe it takes a little shopping around, or maybe you have to be open-minded about what your kids “need,” but resale is where it’s AT when it comes to reducing costs for kids. Oh, and make no mistake, your kids can still LOOK high-fashion or fancy without you paying mall prices.

Save Yourself, Mama

With all of this being said about savings and how to focus on the big line items for the largest percentage in savings, make sure YOU are also on the priority list. Your name isn’t likely to be a budget line item (if it is, good for you!) but your name should be on the calendar each week.

“If mama ain’t happy, ain’t nobody happy,” right?!? So you need time to recharge, see friends, have quiet time, and rest so that you can be the effective household CEO you want to be.

You are the biggest factor and the person in the most control of the household expectations, the kids’ beliefs, and motivation, and whether or not the family’s financial goals are met

You may need to shuffle priorities sometimes and choose to put finances or your health as the main area of focus for this month, this quarter, or the year. Take the lead Rachel Wester has given on the podcast this week and, even though there are many pieces to the abundance puzzle, take one thing at a time and prioritize your personal wellbeing above all else.

Meet Realtor, Rachel Wester

Local Realtor, friend, networking buddy, and fellow-mom Rachel Wester loves helping families find their perfect home. As a Money-Minded Mama herself, it’s important her clients are making the best decision for themselves financially with one of the largest purchases of their lives. She has a Masters in Teaching, a hubby who’s an educator and former Marine, and is proud of the career she’s built while being able to stay home with her 3 kids.