Fixed-Needs

The first budget item he added was his mortgage.  Mr. Smith had talked to a lending agent about refinancing his mortgage but had determined that with the rise in interest rates it would not be wise to refinance at this time.  Mr. Smith also crossed out the interest payment for credit cards and the credit card payment.  Mr. Smith was able to refinance his remaining credit card debt with a home equity line of credit.  Therefore, his goal will cover the payment of this debt.  By shopping around to find a better deal on his expenses from the referrals on the losedebt.org website he was able to reduce his expenses as shown below:

• Car insurance: $100 a month to $75 dollars a month.
• Car Loan:  $145 a month to $120 a month

To further reduce his expenses, Mr. Smith also went and purchased multiple energy efficient light bulbs which he believes will help him reduce his power bill.  Also, during the winter Mr. Smith decided to leave his house at 68 degrees instead of 75 degrees which he believes will help him lower his gas bill.  Unfortunately, Mr. Smith was not able to reduce any of his other Fixed-Needs.  Therefore, he added the monthly average he calculated to his budget.  See his spreadsheet here.  After adding his fixed needs, he determined he had approximately $980 left.

Variable-Needs

Next, Mr. Smith looked over the items listed in the Variable-Needs and determined that there were two items he could reduce but the remainder of the expenses would need to stay the same.  From the LoseDebt.org reduce expense referrals Mr. Smith found a way to reduce his cost of long-distance phone bills.   In addition, he discussed it with his wife and they determined that they would also lower the number of long-distance phone calls they make.  In addition, Mr. Smith had an idea to reduce his expenses.  He talked to his neighbor who works fairly close to him and they decided that it would be a good idea to car pool.  Based on carpooling, Mr. Smith decided that he could lower his gasoline budget significantly.  See his updated budget here.  After updating his budget Mr. Smith realized he had approximately $150 dollars left to cover his Wants.

Wants

Mr. Smith decided it would be a good idea to start bringing his lunch to work and Mrs. Smith said that she would set a goal to cook meals more often.  As a result they determined that their budget for fast food could be reduced significantly. Also, Mr. Smith decided that instead of going out to eat at a restaurant once a month they would go out to each once every other month.

Mr. Smith through shopping around was able to switch from a cable modem to wireless high-speed internet and reduced his internet access cost.  In addition, after looking at how much money was left to be applied to his budget he decided to switch from digital cable to basic cable.  Also, after realizing there wasn’t much left of money to budget he decided that it was best to get rid of his cell phone.  See his completed budget here.