I just gave myself a raise, and you should too. But here’s the thing – all I did was cut some costs. See, the way I look at things, money saved is the same thing as money earned. Both means more money in my pocket. Sure, we could get all technical and debate that point of view, but let’s not.

With the economy tanking like it is, you may find it to be a little more difficult to add new income, or perhaps you have clients that are cutting back on their expenses, and you became part of that cut. Whatever the case may be, if you need to have a little more cash, you may be able to obtain it just by cutting some current unnecessary costs.

At least once a year, I run through a list of all my expenses to see what can be cut. Doing so is, in effect, giving myself a raise. I remember when I used to work out there in the “real world”, usually in an office cubicle, I’d get all excited when my boss would give me a raise. In most cases, that was usually a twenty-five cent per hour raise, and I’d actually be happy about that. Fifty cents deserved a full-blown celebration, and a dollar raise made me feel wealthy! In reality, though, let’s calculate what I was getting all excited about.

A 25 cent raise, based on a 40-hour week (or 2,080 hours per year), amounts to $520 extra per YEAR, which when broken down per month, is a mere $43 extra per month.

A 50 cent raise would be an extra $86 per month and a 1.00 raise would be an extra $173 per month.

So, using those figures as a guideline, how hard would it be to cut a few expenses so that we could give ourselves a raise between 25 cents and 1 dollar per hour?

I went through my normal living expenses (non-work related) to see what I could do to shave that down. Here’s what I’ve accomplished with that. (All savings calculated as a monthly figure).

Netflix – I’ve been subscribed to the level which allows me to have 3 movies out at one time. Since we only watch one or so a week, I’ve been paying for something I’m really not using. So, I’ve moved down one level, giving us 1 movie out at a time, but still having the ability to rent as many as we can over a month’s time. Savings: $8

Gamefly – Like Netflix (but for games), I’ve been subscribed to the level that gives us the ability to have 2 games out at one time. We only ever play one at a time, so the extra was wasted. Moved down to the lower level. Savings: $7

AT&T Long Distance – I’ve been paying $29.11 extra per month for unlimited long distance. I originally chose this plan back when the kids were living with us and they’d talk for hours to their friends far away. Now there’s just no need for it. We use our cell phones for long distance calls, so I’ve dumped the long distance portion of my landline phone. Savings: $29

Satellite TV NFL package – We like football, so it seemed like a cool thing to have, but we don’t watch all those games even though we could if we wanted to. In reality, we only watch our team play, and maybe one or two that happen to be playing on one of the non-package stations, so I dropped this package from the TV bill. Savings: $13

Magazine Subscriptions – I’ve cut out two subscriptions that no longer really interest any of us. Savings: $6

Groceries – This one is difficult to quantify. I’ve just been making a concerted effort to save at the grocery store as much as possible. I’ll give just one example, but there are many others as well. I used to buy little breakfast burritos from the grocery store and I’d eat them every day for breakfast. They were fast, easy, and tasty. They were also expensive. Now, I’ve switched to mini-bagels w/cream cheese, and I’m saving about eight dollars per month just from this one change. Cutting grocery costs in other ways adds up to quite a bit, but since I don’t have exact figures, let’s just use the breakfast tally for this exercise. Savings: $8

Total Savings Each Month: $71

My Raise – 40 cents per hour – Not too shabby!

Now it’s your turn. Look around and see what you can cut without really sacrificing anything really important to you, and then slash those items from your bills. Give yourself a raise! Then come back here and share with us what you’ve cut and how much of a raise you gave yourself. Who knows…maybe you’ll spark some ideas for us so that we can give ourselves even bigger raises!

(from Smash Mouth. "AllStar" Astro Lounge. Interscope Records, 1999.)

Posted on October 7th, 2008 by DazzlinDonna
Filed under: Cutting Business Costs