I track all of our family’s expenses and make plans for all of our spending every month. I’ve been faithfully budgeting and living frugally for thirteen years. You might not think that doing a budget audit would yield very many opportunities for saving when our family is already locked into budgeting and frugality.
I’m excited to surprise you!
We are in the middle of a tight financial season right now due to multiple reasons. I pulled back our already trim grocery budget even more for a couple of months, but I knew there was more that could be done. That’s why I decided to go through our budget and look for ways that we could be saving.
First, I’ll talk about what a budget audit is and how often you should be doing it. Then I’ll share with you the exact changes that we made to our budget. Finally I’ll share the total that we saved and tell you my one regret with this budget audit.
What is a budget audit?
A budget audit is a chance to examine all of your expenses and see if they still match your priorities. During a budget audit, you actively look for places to save money and reduce costs.
One effective way is to start with a blank page and add spending categories back one by one, getting rid of any expenses that are unnecessary. If you are new to budgeting, this is a great way to get on track.
Of course there are many expenses that can’t be altogether removed, like your rent or mortgage payments and your utilities. While you cannot eliminate these categories, you can often save big by just calling to ask if they have a loyal customer discount. For services where there is competition, you can call competitors to see if you can find a better rate.
For my budget audit, I chose to simply assess the expenses in each budget category to see where we could cut or trim back spending rather than start our budget at square one. I already had in mind a few areas where I knew we could improve.
Personal or business budget audit
You can do a budget audit on a personal budget or a business budget. Sometimes with a business budget it’s easy to just chalk up your business expenses as the cost of doing business.
For me, a business budget audit helps me realize that any unnecessary business expenses are just decreasing my business profits. When you’re a one-woman show, like me, that means reducing any business expenses means more money in my pocket.
When I did this with my business budget a few months ago I found lots of ways I could save. It actually made me kind of sick to see how much I was overpaying for so long for some business products and services that were unnecessary or unused.
How often should I audit my budget?
How often you audit your personal or business budget depends on how actively involved in the finances you are. Are you regularly going through your credit card statements to know where your money is going? Do you know how much you are paying for services whose prices are ever increasing?
If you keep good track of your expenses and actively budget, then once a year is probably sufficient for a budget audit.
On the other hand, if you’re not actively budgeting and keeping a close eye on your money and your accounts, then it would be better to do a budget audit every 3 to 6 months.
Changes I made after our budget audit
As I went through our budget, I found several areas to make changes. It was just a few days before the end of the September, which gave me a strict timeline to make the changes, since many monthly charges happen on the first of the next month.
Gym Membership– $60 $10
We got a family gym membership several years ago and for a time, enough of us used it regularly enough that it was worth it. I had more personal gym accountability with my teens before they could drive. Once they could drive, they didn’t need me. With everything on my plate, I just wasn’t making going to the gym a priority, but was staying active in other ways. I paused our family membership until January, but kept my oldest son on since he goes regularly. I’ll reassess in January.
Savings: $50/monthÂ
Fitness App– $10
I was paying $10 per month for a fitness app which I like, but wasn’t using. This is embarrassing to admit, but each month I kept thinking that next month would be different. I would think when x changes I will make time to actually use the app for my workouts, but then something else would come up higher on my priorities.
Savings: $10/monthÂ
Audiobook app– $12
I used to love Everand’s audiobook model, where all of the books were included on the subscription. They didn’t have all of the new releases, but that was okay. Then they changed their business model and price to be like other audiobook apps where you get one “unlock” per month. I was waiting until I had caught up with all of the books I had “bought” before I cancelled. After continuing with this thought for months, I realized that this wasn’t working, I was not catching up, but was just trapped into paying each month. When I went to cancel, knowing that I would lose everything, I found that I could pause the subscription to finish off the titles I needed to finish. Why didn’t I do this months ago!?
In the mean time, I found that Audible is having a promotion (that ends this week) where you can get four months of Audible for just $.99 per month, plus you get a bonus $20 credit. And their monthly cost is three dollars cheaper than Everand! The deal is only good until October 19th, so if you’re looking for an affordable audiobook deal, then check it out. As with any promotional deal, make sure to put the end date on your calendar so you can decide if you want to continue or not before you’re charged the regular monthly price.
Savings: $12/monthÂ
Amazon Prime– $139
For two decades I had Amazon Prime shipping through my parents. It was called the Prime Invitee program. My dad was able to put me and my siblings through his Amazon account, and each of us got to use Prime on our own personal accounts. We didn’t see anyone else’s purchases or account details, but it covered Prime shipping (not the other Prime features). That ended last year. After that Amazon offered us our own Prime account for $14.99 for the whole year. That was an easy yes. The Amazon Prime renewal cost is $139. Do we love speedy 2-day shipping with Amazon Prime? Of course! But we can also be content with slower shipping that is free with a $35 order. We didn’t really use Prime Video or Prime Music. Is Amazon Prime worth it to you? They do have a 30-day free trial. Just make sure to make a note of the end date on your calendar if you plan to cancel before the regular charges hit.
Savings: $139/year
Car Insurance
On our car insurance, Mike and I have ourselves and our two teen drivers. In August we drove our oldest out to Utah for college where she doesn’t have a car and won’t be driving. She will be back at the end of the semester and be home for several months before leaving to serve a mission in Portugal for our church. I wasn’t sure if it would be worth it to take her off of the insurance for three months or if it would just be a hassle. I asked Mike to call the insurance and he found that they have a special option to pause coverage for a child who is away at school. Perfect! I guess we’re not alone in this situation! Pausing her coverage saves $244 off of the six month premium, or just over $40 per month. It was an easy process (if you can even call it a process) and it will be easy to put her back on when she returns.
Savings: $40/monthÂ
Internet– $124 $85
Mike got started on this one a month before our budget audit. I’m not sure how he remembered after three years, but we had to increase our internet package when the Ukrainian refugee family moved in with us in 2023. With all sorts of Airbnb guests and renters over the years, we had never gone over the maximum amount of data until they lived with us. Now that they have found their own apartment, we can go back to our normal internet. The change should have kicked in last month but hasn’t yet, so our next bill will be prorated and then going forward the bill will be $85.
Savings: $39/month
Escrow
When we bought our house, we let the mortgage company take care of the escrow account. That was fine at first, but in the past few years, as our mortgage has been passed around to various servicers, they have done a terrible job at estimating our escrow costs. It’s really disorganized and annoying. They will send us a $9,000 check because our escrow account has “too much” money in it, then they’ll freak out and raise our mortgage payment another $1,000 per month because they don’t have enough in the escrow to pay the homeowners insurance! Then whenever the insurance changes we have to pay out of pocket for the new policy anyway, so six months later they send us another check.
It will be easier for us to keep track of things ourselves. We are very good at using and keeping track of sinking funds, so this won’t be a problem. Another benefit is that we aren’t forced to pay $1,707 into escrow each month. Of course we will have to have the funds for insurance and taxes by their due date, but with side income that fluctuates greatly, it’s nice to be able to save at our own pace without penalties of a late mortgage payment. What’s even better is that our escrow money will be in our own high yield savings account earning interest.
Less headache and more money is an easy yes! Why didn’t we do this years ago?
This one is a little tricky to quantify as far as savings go, but holding an average of 6 months of our current escrow payments in a high yield savings account will earn us roughly $34 per month. Of course the balance will fluctuate, so we can’t say for sure what it will net us in total, but this is a good estimate. Maybe I’ll keep track for a year and let you know!
Earning: $34/month
Total savings from my budget audit
All in all, our budget audit saved/earned us $323 for the month of October and $184 for subsequent months.
In the next twelve months that adds up to $2,367! Definitely worth a bit of my time.
In both our family budget and my business budget, the common sentiment was “I wish I had done this sooner.”
When you have monthly expenses that don’t match up with your current priorities, every month you pay for them is money that could be in your pocket. The longer you wait, the more money is wasted.
Don’t delay! Audit your budget today! (That sounds like a corny commercial jingle! 😂)
How about you?
Have you audited your budget and spending?
What did you find?
How much did you save?
I did a financial audit last month & will continue to analyze monthly. Just cancelled Amazon Prime after learning I was paying $189/yr. I am working on other subscriptions to value their worth. This is a good method for working toward wealth building & debt cancellation. Being a ‘Good Steward’ is my goal always.
I just did this also and found several subscriptions to cancel, also I called my cell phone service and they also canceled some extra things we didn’t need. Sigh we have a 3,500 /mortgage so anything helps.