If an extra expense cropped up, how would your budget fare? Would you cut back? Would you hustle harder? There are challenges to both. If your budget is already fairly bare bones, there may not be any remaining notches to tighten the belt. If your work week is already jam packed, carving out extra hours to hustle can be daunting, especially if you’re already side hustling. If your salary is fixed on a schedule, a raise is out of the question. So what would be your plan of attack to deal with an extra monthly expense?Why do I ask? Our taxes are going up. And they’re not just inching up. They are skyrocketing to the tune of 15%. Because our property value has increased and because I am exceptionally talented at jinxing myself. Truly, we knew this day was coming, but we honestly thought it would be more gradual. A cursory glance at the estimate–remember we won’t actually see the bill until next year–leads me to believe we’ll need to set aside an additional $100-$150 a month. That pushes our yearly payment from around $7300 a year to just shy of $8500. Gulp.
After the initial moment of panic that was followed by an angsty tweet, I started making a mental list of the ways in which we could deal with this additional expense. To soothe my soul, I thought I’d share what I’ve come up with so far and pick your brain for more suggestions. We could tackle this extra expense in two different ways: reduce our spending or ramp up our income.
Reduce Expenses
- Use less air conditioning and heat.
- Water less & take shorter showers.
- Be extra vigilant about what stays lit and plugged in.
- Scale back on grocery store treats like ice cream and beer.
- Slash away at the few remaining cable channels.
- Downgrade our Internet speed.
- Cut back on gift giving, charitable and otherwise.
- Price out insurance again.
- Figure out a solution to our hefty cell phone bills.
- Reduce our monthly discretionary spending/fun money budget.
The problem with relying on reduced expenses to cover an extra $100 every month is that our budget is already pretty tight. I’m not saying I won’t try to be more aware of which lights get left on harp loudly from the top of the stairs, but when your grocery budget is $200, laying off the one or two cartons of ice cream we buy each month isn’t going to amount to much. Besides a cranky husband. The easiest area to target is discretionary spending. While we do take doctor copays, prescription copays, and other necessities out of that $300 each month, that spending also covers my twice yearly highlights, Mr. P’s computer game something or other that I don’t understand, and other luxuries. Do I think I could get $100 by whittling away at my spending? Yes. Am I willing to allow it to be the only way I cover an added expense? Absolutely not.
Increase Income
- Ask for a raise.
- Work extra hours.
- Pick up another side hustle.
- Sell clutter.
- Resell deeply discounted purchases or flip curbside treasures.
As two teachers, we are at the mercy of our salary schedules. The only ways in which we earn raises are to work more years and acquire more degrees. But that’s not to say I couldn’t increase my hourly rates for tutoring. We could both pick up more work at school; in fact, that’s how we funded our IRAs last year. Mr. P is also toying around with the idea of doing some painting and landscaping for our neighbors. As always, I’m on a perpetual quest to sell my clutter, and I even sold two pairs of boots for a small profit on Poshmark because I wanted to see if I could make the sales before I made a trip to return them to the mall. There’s plenty of potential ways to make up the cost of our new monthly expense. Just as I could make up the money by doing a combination of expense reductions, a blend of this list would probably be the best way to ensure a steady stream of extra income.
While I don’t know that I’ll ever come across a magic bullet of sorts that allows me to make an exact extra $100 by doing exactly one thing, I do know for certain what I am unwilling to do for the sake of $100. I refuse to divert money from our extra mortgage payments or our Roth IRAs. I’m not keen on taking any money away from our savings account, even if it ends up being used for home repairs, travel, or our taxable investment account. As far as cutting back on gifts, I will go down kicking and screaming before I reduce my charitable giving. Your birthday present, dear reader, might get a bit smaller, though. No matter how this shakes out, I am overwhelmed with relief knowing that I do have the resources, the ability, and the privilege to make this pan out. Somehow.
So Tell Me…How would you handle an added monthly expense? Would your plan of attack be different at $50? $100? $500?
That sounds like a big increase – ugh! I would probably do what you’re doing – looks for ways to cut back or earn more money. Sadly, taxes are mostly out of our control!
I’m also putting in a call to the assessor later on this week. I know the increase is inevitable, but I’d like to know why we had no increase at all for two years and then this huge jump. Can’t hurt to ask, I figure.
That’s the first thing I’d do. I’d call the assessor and then get an independent review to try to make an argument that your property hasn’t appreciated. Last year, I read about the many mistakes that could be made in the course of establishing property values, including improper property lines, data entry errors, etc. Good luck!
That’s great advice, Claudia! Your house wisdom knows no bounds.
That is too bad, sorry to hear that. We run a pretty tight ship in our household, but there may be an area or two that we could cut back still. It all depends on what you value the most and those areas you are willing to cut. We use the A/C and heat as little as possible, cut water usage during showers, got rid of cable and minimized our internet speed. We don’t want to sacrifice our ice cream and beer budget at all! We could price out our insurance again too and I’m sure we could find a way to lower our cell phone bills when our contract is up.
There are always little ways to save, but I’m not sure they’re sustainable or even significant enough to cover a big expense. $100 maybe. Beyond that, I don’t know. Plus, I don’t know that I can imagine a world without a few splurges!
Congratulations on knowing “you got this” and you’re going to make it work.
On the expense side I would look for a cheaper cell phone plan, cut out cable, and price out insurance. Concentrating on the other stuff would be too drastic for me and I don’t think the results would add up to a large enough dent in expenses.
On the income side I would concentrate on the side hustle. But I would seriously look at raising my rates or branching out into an area where I could charge more.
I think the side hustle is probably the most sustainable of all of them. We will definitely fix the cell phone situation as soon as our contracts are up. At this point, getting hit with the contract cancellation fees and having to buy new phones probably wouldn’t be worth it. I figure it gives us a few months to really make a smart decision about phones. At least, that’s what I’m hoping for!
We’ve spent the last year pretty much cutting back what we can cut back. There’s work that could be done on groceries, but the drop in life enjoyment is not worth it and it’d probably increase the takeout temptation. We’d have to earn more. (I’d love to monetize the clutter!)
If all goes according to plan, I sold something on Craigslist and should see that money tomorrow! There’s something really satisfying about selling clutter. And just when I think I’ve sold everything there is to sell, I find more!
That’s a tough situation Penny. Sounds like you have a plan though with a good mix of saving some more by cutting back and increasing your income with some side hustles. Good luck!
Thanks so much! I’m not sure it’s a plan so much as a mishmash of ideas, but I think it will work!
I’m not sure how it works for you guys but in the UK we can switch energy providers and that often can save £300 a year. When I was cutting right back i made meal plans and tried to stretch them out for the next days lunches to cut down cost and waste. I shop price per unit too so I know I’m definitely getting the best deal.
We have to use the same supplier, but we did switch providers if that makes sense. And shopping for unit prices is so important. I need to get back into that habit, especially when it comes to paper goods like toilet paper. I’m also trying to convince my husband to part with his paper towel habit. That will save us money and will be much more eco-friendly.
This is a very timely post for me. I found out yesterday that I have a $900 vet bill on the way. The first thing I always do is try to negotiate to see if there is an option for a discount. After that, we look to cut expenses (great list btw) and if that won’t cover it, then we look to increase income. I don’t really have the option at my job so that falls entirely on my husband so it’s a last resort.
Ekkkk! Definitely a terrific idea to try to negotiate it down. I am calling our tax assessor tomorrow…but I already negotiated it down when we first moved in (I had it switched to the selling price), so my guess is I used my only bargaining chip.
I definitely think that calling the assessor is a good idea. It is frustrating to have increases that big. I like your idea of doing a little bit of everything. It seems to “hurt less” if you can cut a little, hustle a little, & declutter a little. I bet after your contracts are up on your phones that you may find a big savings there too. I wish a few of my tenants were as resourceful as you.
Resourceful. That’s the word. Not panicked. Ha! Throw everything at the wall and see what sticks, I suppose.
Ugh! That’s a huge increase. While we have had our fair share of pop ups, fortunately we had a little wiggle room and can cut some spending categories. If all of that failed, I guess I would be left to hustle my little heart out.
That could be a mug, Latoya. Hustling my heart out. Love it!
Oh this is such a good question! And honestly I came to comment earlier and was like shit, what *would* I do? I think, after giving it some thought, that I’d probably try to cut spending first because I’m definitely not as bare bones as I could be if I needed to. If it was really big I’d probably reallocate some of my monthly savings to it until I could figure out another way to handle it, but I wouldn’t be happy about it.
Also, OH MY GOD YOUR PROPERTY TAXES. That level of tax would be what you’d pay on a million dollar home here in Ottawa every year, and I am so so sorry to hear that they’ve gone up so much (and were so high in the first place!) I’m going to hope and assume they pay for more than ours do to explain it. That must be it.
Right. That MUST be it. Truthfully, we do have a very nice library and we don’t have to pay for stickers for lawn waste or garbage. And our school systems. I’d like to think our schools see most of that money, but seeing as I work in one…
I can relate! Our property taxes recently went up about the same amount ($110/month, to be exact). It’s always hard to tackle that kind of increase, but I have to remind myself that it happened because the real estate market here is bonkers and our house value has increased massively.
Anyway, I took time this summer to call around and reduce our rates on some monthly expenses (cell phone, internet, etc). We also ended up refinancing our home, which I know is not the best decision for everyone. But after doing every possible calculation, we realized it would save us many, many tens of thousands of dollars over the long haul, in addition to reducing our monthly mortgage payments. On the income side, I’m a teacher also, so I can’t ask for a raise (and with budget issues in my district/state, no significant increases are on the horizon, nor have they been for over six years). But I tutored all summer, which was helpful. Can’t decide whether to continue during the school year because my schedule gets so hectic. Also, I have a four-year-old, and honestly, I’d rather spend time with her.
Oh, Christie, that’s a tough one. I am going to try to keep tutoring throughout the school year, but no kiddos here. If my husband didn’t coach, I would probably scale back some. Even a few extra hours a week can make an already hectic schedule much more. Sounds like you had an amazing plan for handling an increase! Hope the new school year treats you well.
Sorry to hear about the raise in taxes! Reading through your list of reducing expenses I had to go “oh no!” on the ice cream and beer, plus slower internet connection – surely there’s another way! It sounds like you have some good options and I love your positive and grateful attitude!
I hear you – our budget is really tight as well, mostly because we don’t sacrifice our saving for extra expenses that pop up. I tend to sell clutter or flip thrift store buys when things get tight (I have a stash).
We have a tax abatement right now – for another 4 1/2 years we don’t have to pay property taxes and I’m dreading the day they finally hit. I’m estimating a $4000/year expense we don’t currently have (and 2 kids in college at that time). Ugh!
I’d love to hear more about your stash of thrift things to flip. Do you have a blog post about it that you could link? The abatement sounds heavenly, but the $4000 a year expense does not! Good thing you’re thinking ahead!
I think I’d look for ways to earn more. I think the increase in your tutoring rate is a good idea. I could probably handle an extra expense just by advocating for myself at my current job and asking for a raise. I’d also look at my cache of side hustles. I’d pick up some freelancing clients, maybe. I’d temp over breaks. I’d pick up a class at a local college. But, we have to be sure that the side hustle is sustainable. Otherwise, I’d look for things to cut from my budget. I can always slash TV for some savings, I suppose. And my goodness I could slash my impulse grocery runs.
I think this is one of the greatest issues with budgeting so tightly. If there is not a good amount of ‘living’ space in the budget any increase can be quite difficult.
I have enough extra room in my budget that it wouldn’t make a huge difference in the short term.
An extra $100 would definitely have a different approach than an extra $500. What I’m currently trying to do is actually pay down debt and save for retirement, which means I’m trying to ratchet up my income significantly for those “extra” expenses. In my industry it is possible to increase your earnings potential by adding on new skills. The results can be relatively immediate, if you time things right.
I cannot wait to hear more about all the different ways that you are increasing your income. I’m so intrigued…and jealous! 😉
Property taxes are currently our single largest expense now that our mortgage is paid. Ours is similar to your new tax rate.
All your ideas sound like good ones. Are you cutting things bare bones to pay off debt/mortgage?
If so, take into consideration quality of life. $200 a month for groceries is pretty great. If you deny yourself 2 cartons of ice cream, you have to ask yourself ” will that $6 really get me to my goal that much faster?” Especially if you don’t eat out much. Everyone needs a little treat
We’re not really bare bones. Compared to the Joneses we are. But we definitely have plenty of little luxuries on our grocery list. As of right now, I’m doing some subbing and cafeteria supervision at work that should make up the difference. Thanks for the reminder, Kim. It’s really important to savor little things along the way!