Did you know that you can optimize your food and health insurance? This can save you tens of thousands of dollars instantly. Successful budgeting is paramount to achieving financial freedom.
Monthly Expense Calculator: Reduce Household Expenses with a Budget Planner
Optimize your food and health insurance to ensure you are budgeting and saving correctly. Personal finance tips like these can lead to faster wealth creation by cutting costs. Or, if you are a freelancer nomad you can save some dough that will allow you to stay on the road.
Financial planning takes time and motivation. I stay motivated by following these financial planning quotes. I’m a big fan of saving money without altering your lifestyle.
I’ve been conserving natural resources by turning to ways to save the earth. Check out these ways you can conserve natural resources and thus, save money.
The first major component of a budget planner is food. Let’s dive into how to use food cost formulas to reduce your household food costs.
My budget planner has been Personal Capital, which has helped me track several of the most important household expenses to save money and ensure I’m on track with my budget. The most important components to your budget planner are:
- Food Costs
- Health Insurance
- Save Fuel
These three costs can be sometime unpredictable to prepare for in a budget planner. If you can use monthly expense calculations, like our formulas, you can save thousands over the course of a year. Develop these budget planning tips as routine and you will instantly increase your savings rate.
You can double your savings rate by just cutting your expenses in half. Imagine if you cut expenses AND increase your income. Here are some ways to increase your income without working more.
You can save money naturally by using cashback rewards apps. These are usually completely effortless and automatically happen when you purchase routine goods.
1. Save Money on Food: Use a Food Cost Formulas
By using a food cost formula or two, you can maintain a proper budget and personal financial planning. These are several food cost formulas to use in your monthly expense calculator for budgeting purposes.
There are plenty of food cost formula tips to reduce your food budget to all-time lows. Let’s get into some of my favorite food cost formulas to start saving money on monthly grocery expenses.
Food costs are tricky for your budget planner. They often have the highest variability on a month to month basis.
Unlike housing and health insurance, food and grocery costs can swing depending on your appetite for a particular month. This is why I suggest that you use food cost formulas to keep yourself in check with food costs.
This can really optimize your expense without sacrificing nutrition.
Eat for 20 Dollars A Week
After doing my first detailed budgeting, I had no idea what was an appropriate amount of money to pay for food. Food cost optimization is a core personal finance tip of mine. You spend significant money on food. What kind of food cost optimization are you doing? Here we have several ideas on how to optimize your food costs.
This was a problem that could be solved. Calories, Protein, Vitamins, Fiber, etc… All of these are readily accessible numbers and those could be compared to my most important metric – Dollars.
- Calories Per Dollar,
- Protein Per Dollar,
- Vitamin and
- Minerals Per Dollar
These metrics have all been studied to find the best values and benchmark what makes food ‘A Good Deal’. Full studies and data can be found here.
There are varying levels of extreme you can go to saving money on food. I highly recommend targeting ~$20/week per person.
Eliminate Eating Out at Restaurants
If you are visiting Millionaire Mob, you know eating out is expensive. Did you know Fast Food is more expensive than homecooked food?
A loss leader at Taco Bell, their Fritos Burrito, is 440 Calories Per Dollar. A home-cooked meal aims to hit ~700 Calories Per Dollar, almost 2x cheaper than anything you can eat out.
Your work cafeteria charges $7 for a meal you could be eating for $1. This is a great example of a way to optimize your food costs.
A goal for you – Stop eating out completely. Save these trips for vacations and birthdays. This will save you between $4,000 and $10,000 per year, per person. A half million dollars in your lifetime.
Grocery List Optimization
Start optimizing your grocery shopping list. There are several categories of types of food that you should consider to save on food costs. Before changing your recipes, you can eliminate these expensive foods:
- Processed Box Food – Box Noodles(Hamburger Helper), pre-flavored rice, pop-tarts, brand name cereal. Aim for 2000+ Calories Per Dollar on empty carbs
- Frozen Food – TV dinners, frozen Pizza, frozen breakfast, all are more expensive than making fresh food. Target 700 Calories Per Dollar for a meal
- Canned Food – To my shock, canned food is expensive. Canned veggies are more expensive than fresh, and fresh is cheaper than frozen.
- Expensive Fresh Foods – Brand Name Apples(Golden Delicious), Red Peppers(replace with carrot), out of season Strawberries, are luxuries. Wait until these products are in season and local for significant savings
If there is packaging and ingredients, you are paying a premium for a company to mix and package it.
If you can cook food yourself, you will save 2x as much. I like using apps to get money back from routine grocery store runs. I used this shopping hack to earn 10+% cash back at Whole Foods.
You can save money on food by just eating more efficiently. Eliminating expensive foods will cut your food bill from around $7,000 a year to ~$2,000 a year. This next bit will cut your grocery bill in half.
- Maximize Low-Cost Calories – Flour, Rice, Bread, Oats, and some Noodles can be bought above 3000 calories per dollar
- Find A Protein Solution – Lentils and Beans can often hit over 100g Protein Per Dollar. Milk, Chicken and Eggs can be bought around 50g of protein per dollar. Pork and ground beef are slightly more expensive, but if you can get these on sales for around 2$/lb, they are competitive with Chicken and Eggs.
- Fresh Veggies are much cheaper than Canned and slightly cheaper than frozen. Leafy greens like Spinach and Kale performed fantastically in our Nutrition Per Dollar study. Extremely cheap foods like Milk, Eggs, Potatoes, and Carrots scored in the top 10.
The big deal here is to simply stop eating expensive foods that do not provide the nutritional value you deserve.
Make it a goal to eat for around 3 dollars a day. Even a single trip to the work cafeteria can increase your weekly bill from $20 to $30, a 50% increase!
Daily eating means that inefficiencies are much more punishing than a monthly expense like an expensive cell phone bill.
2. Health Insurance Cost Calculator: Use Formulas to Save on Medical Expenses
You’ve learned how to optimize your food, but another cost that adds up over time is health insurance. Picking the wrong health insurance can cost you hundreds of thousands of dollars in your lifetime.
You can always try to sell your settlement. Between your food and health insurance expenses, these are your highest household expenses. Your home and housing costs are likely your highest expenses. Imagine the lifestyle of mortgage-free living.
The topic has been a total shock to me. If you do the math, you will find out your health insurance company has multiple plans designed for ‘Suckers’.
Here are some of my favorite tips to save on your health insurance expenses. If you work independently, consider private health insurance with a provider like Liberty HealthShare.
For Most People, Pick The Cheapest Plan
You should choose the cheapest plan in your monthly expense budget planning process. However, that is not always the case for everyone. Health Insurance has 2 important numbers:
- Max Deductible (Max Out Of Pocket) and
- Premiums (What you pay).
If you don’t plan on getting sick/injured or having a child this year, the cheapest health insurance plan is ALWAYS the best plan.
Our Liberty HealthShare review highlights some of the benefits of using a shared ministry service. For life insurance, it’s a bit more difficult to determine how much life insurance you truly need.
This is one that is simply an easy way to follow along a budget planner. Health insurance costs are one of the most important as they are fixed monthly costs. This makes it one of the most important expenses in your budget planner.
Planning On Being Sick
This study made me hate health insurance companies. Often High Deductible plans are BETTER in the event of horrible illness and injury.
The idea comes from: Max Deductible from a high plan + Yearly Premium Costs is cheaper than a low deductible plan with high premiums.
An Example of Planning for Health Insurance Costs
Here is a real example of how to plan for unexpected health insurance costs:
- Max Deductible is 5,000 USD, Weekly Premium is $110. Worst case you will pay $11,000
- Max Deductible is 6,550 USD, Weekly Premium is $ 77. Worst case you will pay $10,500
Under the unfortunate situation of getting multiple illness and injuries in a year causing you to hit your Max Deductible, the “Platinum” plan is more expensive. In the situation where you end up not hitting the Max Deductible, you save $2,000/year with the lower cost plan.
After 3 years of teaching people how to rationally choose health insurance, very few instances exist where a more expensive plan is a better plan.
Typically these exceptions are the second lowest cost plan, and you are assuming you will be sick/pregnant and will be hitting the max deductible.
3. Save Fuel in Your Monthly Expense Calculator
It’s pretty tough to save fuel. However, it is possible in your monthly expense calculator. Create a budget planner and maintain datapoints that suggest how you can optimize your fuel usage. There is a famous problem in math called “The Secretary Problem”.
You are allowed to interview a secretary, but you must make the decision to hire the secretary or reject the secretary and try another candidate. You don’t know how good the future candidates are, so how do you know when to stop and hire a secretary.
The answer: After 37% of candidates are interviewed, use that knowledge to pick the next best candidate.
Applying this to buying gas, consider using this method on your next commute to work.
- There are 10 gas stations between home and work.
- 37% of gas stations is ~3 gas stations
- Drive and observe the prices for the first 3 gas stations on your commute, 2.40, 2.45, 2.30
- Now you are looking to beat that gas station price of 2.30
- When a gas station has a price of 2.29 or lower, buy your gas from there.
A minimalist lifestyle can help you naturally consume less in fuel and household expenses.
The fun little trick using statistics. Using this method optimizes your gas the most often without any extra work. By using these tips on saving money, you can use the extra money saved by reinvesting into a dividend portfolio.
Conclusion on Monthly Expense Calculator: Reduce Household Expenses with a Budget Planner
As a budget planner, you need to stay organized with your monthly expenses to ensure you aren’t doubling up unnecessary costs. With a monthly expense calculator, you can effectively have a budget planner to go off of and optimize your household expenses.
This will save thousands of dollars are routine expenses over time. This will free up more money for you to pay down debt and invest at a faster rate. A budget planner is a very effective tool. If you aren’t using it, you are simply missing out.
I’ve been a huge fan of using formulas to improve my financial situation. You can see that food cost formulas can be an effective way to reduce expenses on food without sacrificing quality.
Here are some crucial accumulated wealth tips on how to improve your personal financial ratios.
If you pair that up with several quotes about financial freedom, you will stay motivated to live a better lifestyle and improve your financial position.
Income is always important too. If you can reduce your expenses while increasing your income, you will quickly double your savings rate. Try these 9 passive income ideas that actually work to boost your income.
Check out Efficiency is Everything to see the breakdown of this study, and learn how to save money using data to optimize your life.
What do you think about this monthly expense calculator? Can you reduce your household expenses by following a budget planner? We’d love to hear your thoughts below. For every dollar saved this ensures us that we will build a dividend portfolio to a larger scale.
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