Day 2: Budget Review, Part Deux

Today I finally stepped my foot to the gym after procrastinating for six weeks. I don’t know what it is that I fear about exercising. Oh wait, yes, the muscle pain and the slow result. Regardless, I finally did it and it felt good. Probably more to the absolution rather than the physical fitness, but I’ll get there.

The budget review today will involve more day-to-day items such as food, groceries and utility. To be honest this is tricky for me as they are quite volatile so the savings and splurges can be easily made.

Health Insurance: There are plenty of providers out there and the cost may vary from $10/week to $100+/week for combination of different services. Obviously you need to check the kind of services you need or will need in immediate future. However, this is not always simple. There are websites out there that will let you compare various providers within your search parameters in a few clicks. For me, once I found the best offer on that website, I would go to the company’s website and see if I can get a better deal. Is your health insurance providing what you need? Is there any services you can shed? Can you downgrade or upgrade? Is it better to have higher or lower hospital excess? Do you need higher limit on extra services?

My review: My health insurance provider is one of the best and cheapest out there, especially for young people. Last year I upgraded my cover to include pre-natal and birth services because we planned to have a baby. After careful consideration, we decided to delay the plan for a few more years. I will contact my provider next week to downgrade the cover hence decreasing the premium. I estimate to save around $25/month from this action.

Groceries: It seems like groceries are the favourite talk on most frugality-based blogs since this is an area most people take for granted but given the right choice, we can save a lot. Is there an alternative shop? Would  you consume non-brand items? What about coupons and discount cards? Is it better to go to local market and butchers rather than supermarket? How do you limit the spending?

My review: After finding a good butcher just outside the supermarket who offers half priced meats, our grocery bill has dropped from $300/month to $250/month. I still think we can trim the regular chocolate and sweet treats and lower it to $200/month. At the interest of living healthier, we will replace the chocolate with fruits and vegetables. I don’t know how cranky and restless I will be on the first week, but it is better to do it now rather than later. How much can you trim from your groceries?

Utility: There are so many information out there that will tell you how to save on electricity and gas. My first stop will be this website. It lets you compare the offers from various companies based on your usage level. The savings will be shown and the switch instruction is provided clearly. It is not as hard as I thought before. I used their service last year and switched to another company. I have saved an average $50 quarterly for the same usage level. Not a bad result for 10 minutes work. How does your company compare? Is it better to switch? How else can you save?

My review: While I’m happy with the result, I found out the other week that they will increase the daily supply charge by 70% in January. This will effectively increase the bill by around 30%.  Apparently, this is the case for most companies. Since the increase has not taken place yet, the comparison result is not accurate. I will call the company and do another price comparison review in a couple of weeks.

Charity: Many times our donation is driven by guilt rather than compassion. The charity organisations know it, that’s why they are using grim pictures of hungry children in their campaign. I’m not saying they are bad. On the contrary, I believe they are doing a terrific job. However, I don’t like to feel guilty about enjoying my life and would rather give with hope and compassion, not guilt. More importantly, you should give to the causes you believe in, be it eradicating child prostitution, micro-financing or animal rights. You can’t help them all and it’s ok. Have you read the charity newsletter and financial annual report lately? Do you (still) believe in the work they are doing? Should you increase or decrease your donation amount?

My review: I have been supporting a few child sponsorships for almost eight years. We have been exchanging letters a few times a year. So far I have managed to finance it and plan not to add another sponsored child until after our trip. For me, this type of donation takes a huge commitment since I cannot just cancel it out of the blue. It feels more personal when your donation is directed to one person instead of a community. Another favourite charity is this micro-financing website. The idea is ingenious since you are lending money to entrepreneurs in developing nations so they can be self-sustainable. Your money will be returned and you can lend it to another entrepreneur. Charity is one of the last things I would trim from my budget.

Tomorrow I will review my investment performance in 2009. Honestly I have not reviewed it properly because I was too scared to see the performance result. Oh well, I will brave myself and see how it goes tomorrow.



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