My very first post about Financial Freedom talked about spending habits and the importance of creating a budget. Having a budget is really essential to managing your money. Budgeting can seem like it comes with restrictions but it actually helps save money because it identifies areas of overspending. Budgeting creates cash flow visibility and ensures that you have enough funds available to cover your most important bills and help you reach your goals by spending on the things that are most important to you. Creating and sticking to a budget eliminates worry and creates more control over knowing where your dollars are being spent. Ultimately, a budget puts you in control of your money and is the biggest tool to changing your financial future.

Automating payments without having done an actual budget follows the "Set it and Forget it" method.....setting bills on auto-pay and/or paying monthly bills like clockwork. Most people who live without a budget follow the "Set it and Forget it" method and more than likely overpay on expenses where they actually could be saving. When Mr. Mindful Dollar and I created a budget a couple years ago, we soon realized that we spent far too long overpaying on certain bills. There's something to be said about plugging numbers on an excel sheet or writing it on paper. Numbers don't lie and we quickly realized we needed to control our expenses. Below are the areas we successfully reduced our monthly expenses:

Heating Bill -  For the first few years of home ownership DH had a regular thermostat that had to be programmed manually. The claims on programmable thermostats is that they help save money and energy through set programming. But what if you set your thermostat to come on at 4pm but for whatever reason you get home at 9pm? You just wasted 4 hours of heating (considering it may take an hour to heat the space) for which couldn't be changed while you weren't in the house. To remedy this, DH being a tech savvy guy discovered the power of Nest about 3 years ago. Nest Labs is the producer of programmable, self-learning, Wi-Fi enabled thermostats and security systems. We paid roughly $300 for the system and installation and we have the power to control our heat from our iPhones via the app. The Nest Thermostat  gets to know the temperatures you like and when you like them and creates a schedule and automatically creates a schedule for you. Since using Nest, we've realized a savings of at least $20 a month on our heating bill just by making the switch.

Car Insurance - When Geico sent a letter 3 months ago and threatened to increase  DH's rate by 55%, he immediately shopped around and secured a rate from Allstate that was $70 cheaper per month. Never assume that your current rate is the best in the market. Always try to test the market to see what competitors are offering. You can do a quick comparison on Ever Quote which scans databases of several insurance companies and provides suggested quotes. 

Cable Bill - state that the average price of your cable bill will increase this year by 3-4% in addition to add-on fees. Our bill in 2014 was roughly $189 for TV an Internet alone. When our contract was up for renewal we reduced our bill to $140. Within the personal finance space, there are a lot of people who make the bold move to cut off their cable bill and only use Netflix or Hulu. While this may feel like a sacrifice, if you're in the midst of aggressively paying off debt, it's an expenditure worth ratcheting back until you  hit some financial goals. If cutting off cable seems too drastic, consider calling your cable carrier once a year to inquire about better priced packages and express your disdain with the current rates you're paying. Competition among cable companies are pretty stiff and they want your business.

Medical Expenses - My health insurance has been relatively good but I realized that in the last 2 years my employer made changes to my benefits plan. After a recent annual checkup, I received bills for laboratory and radiology services. Turns out there's a deductible I have to meet before the insurance company covers any expenses for laboratory and radiology imaging services. The hospital in the area billed me for the lab work and I called and explained that the bill was unexpected and not in my budget and inquired about a discount. They immediately offered me a 25% discount which saved me $37. Never be afraid to call and inquire about paying a lower rate. Your attempt may not always be successful but not trying guarantees no discount. If you're facing financial hardship, they provide assistance to help meet your situation as well.

House Phone - DH had an international phone plan that cost $45 a month. Why did we need to spend $540 a year on a house phone? DH did some research and found a phone company called Ooma that cost $100 a year and that rate includes free calls to Canada and some European countries. DH calls Paris often to chat with his friends and cousin which works out nicely. That's $8.33 a month for home phone service and we have the option of adding additional funds to enable calls to other countries. The company even has an app that enables phone calls from anywhere. If I'm at work and I want to call my uncle in Canada, I simply make the call from my iPhone through the app and I won't incur charges from my cell phone carrier since the call was made through Ooma.

Water Bill - DH and I are landlords with a multi-family house with 2 rental units. Water rates in NYC tend to be a bit higher compared to the suburbs. DH has become a fanatic of logging into the city's website to check the daily water usage to ensure it's within a reasonable range. Average daily water usage costs about $2.95-$4. A couple weeks ago he realized the usage spiked to an average daily rate of $11 and even spiked to $23. This prompted us to contact the tenants to see if they were experiencing a running toilet, since past issues have taught us that this can almost double our quarterly bill if it goes unchecked. We discovered that there was in fact a runny toilet and we quickly scheduled a plumber.

Home insurance for appliances - In addition to regular home insurance, DH secured additional insurance for all appliances when he completed the home purchase which covers both boilers, microwaves, refrigerators and toilets for the entire house. The service is a MUST for all homeowners because you grossly reduce your costs for repairs over time. The company charges a monthly premium and if a repair is needed a deductible is charged once service is rendered.  Our home comes equipped with Over-The-Range Microwaves. I  recall shortly after Mr. Mindful Dollar bought the house, the tenant's microwave unit blew a fuse and when GE sent their repair guy, he paid $300 out of pocket for the service. A couple months later, the fuse blew again and that was another $300 out of pocket expense. It was these 2 incidences that lead him to search for home appliance insurance. Our initial company charged $55 for monthly premiums and charged a $75 deductible each time we had an incident. About 7 months ago, DH decided to shop around and we switched to a company called Home Choice Warranty. They charge $45 for monthly premiums and deductible. When we had the runny toilet issue 2 weeks ago, we called the company and they sent out a plumber last week and our out of pocket expense was only $45. Had we called a regular plumbing service, that one time service could've easily been $150-$200.

If you haven't already done a budget, do one TODAY. Looking at your monthly expenses will provide an opportunity to comb through your actual payments and prompt you to shop around to ensure you've secured the most competitive rates in the market.