The $1,000 Challenge: How I Painlessly Cut My Family’s Monthly Budget

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Shortly after Brian J. O’Connor moved from Florida to Michigan eight years ago to work as a personal finance columnist at a newspaper, the recession hit.

At the time, his wife was busy caring for her aging father in Florida, so she was unable to return to work. As a result, their home equity line was frozen—along with raises at the newspaper. Then O’Connor’s insurance company informed him that his son’s speech therapy would not be covered.

After taking a serious look at their situation, O’Connor challenged himself to slash his family’s budget, so he could afford his son’s treatment on top of their day-to-day living—and, like any good columnist, wrote all about it.

In “The $1,000 Challenge: How One Family Slashed Its Budget Without Moving Under a Bridge or Living on Government Cheese,” he explains how he trimmed $100 a week from his spending for ten straight weeks to the tune of $1,000.

From finding services on his cell phone bill that he’d forgotten to cancel to discovering an unused email account that he’d been paying to keep, his honest-to-a-fault storytelling proves that a little work goes a long way when it comes to saving. And as you’ll see from this interview, everyone can follow O’Connor’s example.

LearnVest: Can you explain how the challenge started?

Brian J. O’Connor: Living in Detroit, we were at ground zero for everything happening in the country during the recession. As a journalist, I looked at the cumulative effects of changes to the auto industry: lost jobs, economic downturn … and it occurred to me that people didn’t need to read about which credit card would give them the most frequent-flyer mile points.

So I decided to take the top 10 spending categories in my family’s budget and cut each one by $100 for a total of $1,000. I covered one spending category each week in my column, which I renamed the “Grand Experiment.” When I started, I didn’t know if we’d accomplish our goal, but I knew it would be a good story either way. If we could slash $1,000 from our budget, that would be great. If we couldn’t, it would show how bad things really were during the recession.

RELATED: The Unemployment Diet: How We Started Saving $1,000 a Month

  • Jill

    I can’t believe people think cable is more important than financial freedom. That should be the first thing to go!

    • Brent Moody

      We had two incomes for a few years and have always made decent incomes. We never had cable until we had been married for 7 years. We have had it the past 3 years. Its really nice sometimes, but not worth what we pay. I think we will drop it as well. The mentality of many people is really messed up. Having cable has ultimately made us realize we don’t really use it anyway.

  • Larisa

    We dropped cable, and kept the Internet. Between Netflix, a $40 antenna, and trips to the sports bar down the street (for those out of market football games we just can’t miss) we’ve saved loads of cash monthly. I don’t even miss the cable company!

  • Kristin

    I’ve lived without cable for a while. I spent on average about $50-60/mon for high speed internet and HuluPlus and Netflix. I never felt like I was missing anything and was introduced into new shows and documentaries.

  • sally sue

    Over the past three years I’ve done several things to decrease my expenses: canceled cable, went on a family plan for my cell phone, starting doing yoga online instead of face to face classes and starting getting my hair cut every 3 months instead of every 2 months. Even with all that my budget is still tight mainly because I haven’t had a raise or COL increase in over four and a half years and counting.

  • sara

    I cut cable, made myself delay all non essential purchases by one month to determine if I really need them. I try and make gifts for people, it allows me to feel generous with my time rather than my budget.

    • sam_the_cat

      Delaying purchases for a month is a good idea! I tried that tactic with my clothing purchases and realized that at the end of the month, I’d forgotten about half the items that I’d previously thought I absolutely had to have!

  • Sara N

    Hi! One way I successfully cut costs was by biking to work – I only lived three miles from the office and there was a bike path (free versus paying for gas). It had other benefits, too! Instead of grabbing lunch out somewhere, I had to plan ahead and pack a lunch (there were no restaurants within walking distance) so I saved money doing this and I improved my health as well!

  • Eiko

    We are living without the cable for almost three years. Our kids only want to watch their favorite shows anyway, we just decided to pay for Netflix that’s like $8 versus $90. If we really want to watch a movie, go to Redbox with a coupon. I was so used to just had TV on and doing something else. But I adapted to “not having TV on at all” easily. No withdrawal symptom or anything. That lowered the electricity bill quite a bit, too.

  • Tara Jacek

    We cut out our landline because we both have cell phones. I use coupons and discounts on things we need if possible. If I splurge I only buy if there’s a sale or discount. We don’t leave lights on when we aren’t in the room and unplug electronics at night. We also don’t mess with the ac or heat. A sweater can do the trick when it’s cold! These two things have helped lower our electric bill.
    I also try to make my money work for me by using an online program that pays down my student loans as I buy online. Even if I get $1 back it’s a $1 I didn’t have before! Of course, I still only shop online if we need it and there’s discount. This is great during christmas for gifts.

    • Cecily

      What program do you use?

      • Tara J.

        Upromise.com. They have most big online retailers and some you can pick up in store. If the store isn’t on upromise I look for them on ebates.com. It’s a longer process for ebates but at least I get something

  • Lena

    We used to treat our family of 5 to dinner once or twice on the weekend, spending about $60-$150. As a busy mom I looked forward to not making a meal. We stopped the habit by meal planning and making the meals we crave for at home. A lot of money spend mindlessly (ghost money) is spent on coffee or quick bites to eat. We now think in advance and pack snacks and make coffee at home.

  • Sienna Smith

    I took the plunge and downsized from a 1-bedroom apartment in a fancy high rise apartment building to a basement studio apartment in the same neighborhood. It’s a big adjustment but I’ll be saving $750 a month and won’t have to leave the neighborhood I love to get that savings. Now it’s aggressive debt paydown time.

  • Cathy

    My husband and I live with my father, who’s a single parent. We save on housing, & my dad has the peace of mind that someone is always there for my brother. We cook big family meals so we can buy in bulk, and we share expenses. We share a gas efficient car for trips to the city (we live in a rural town,) and carpool every chance. We signed up for the grocery store’s online coupon service & plan meals a week in advance. It was a bit of an adjustment, but it’s not too difficult.

  • KG

    I pay out of pocket for my health insurance and switched to a new plan by increasing the deductible and taking on supplemental insurance. This saves me $100/month. I never make insurance claims. And, I negotiated my banking fees by threatening to leave my current bank. I brought another bank’s paperwork to show the fee comparison. They waived the $25/month fee. I plan to empty my storage unit. My parents have offered to store my stuff (after I pare it down more) in their basement. This will save me $80/month. I’m still looking for more ways to save. I’ve cut out sweets at the grocery so, not only is my diet better, I’m not spending $5-10/month on cookies or the like. i signed up for the Peak Rewards program through BGE and they offer discounts for being able to control my thermostat during extremely hot or cold days during the year. I’ve noticed a saving of about $20-25/month since I started with this program. so far these efforts are/will save me around $230+/month. It’s allowed me to begin building my emergency fund. There are plenty more things that I can look into for saving. This is just the beginning!

  • Lisa H

    We cut our cable (~$150/mo) and now pay for internet, HuluPlus and Netflix (~$50/mo)…we don’t miss cable at all!

  • Catherine

    The cable was an easy expense to eliminate. We also joined a CSA this year, saved money, and got the freshest veggies around! It worked out to about $15/week and sometimes we struggled to eat everything! I do know I need to work on my coffee drinking habit, so I’m thinking of getting a bottom-less mug membership for 2014. It’s a lot to spend on coffee at one time, but it will save a ton by the end of the year. I figure that saving some money is better than none :)

  • L.L.

    We sold our car on craigslist, paid off the car loan with the money and bought a car outright from craigslist with what we had leftover from the sale. Without a car payment, we instantly saved over $400 a month, and the car is just as reliable as the one we sold.

  • Jane

    One of my biggest bills is cable, but I have to have it for work.

    So I called and complained about the price (it had nearly doubled in 18 months from $110/month to $180/month) and I had shoddy service (internet outages, on demand problems, etc). I explained that I needed the coverage but I wasn’t going to pay for bad service. I threatened to leave, too, though I had no serious intention of doing that.

    I was paying $180/month for shoddy internet, cable, and phone and now pay $161/month for consistent internet, cable, phone, and a free, massive DVR. I was given a full month discount. Saved me $330 dollars for one year, probably still ~200 next year!

  • Cady

    We are paying our house of quickly (on track to be paid off in under 5 years; about 2 to go!) which is saving THOUSANDS in interest. We bought a home well within our means and pay an extra $2,400+ on top of our mortgage payment monthly. We do this by taking 600$ out of our bank account every sunday. We got used to it quickly and because we are budgeters, we don’t miss the $$$. I bike to work, daycare, grocery store, gym etc, and my husband drives only to work. We also have no cable and use Republic Wireless for our cell phones which gives unlimited talk/text/web for only $20/month.

  • Tina Veselka

    Our biggest cut was eating out each week. We are a family of 6 and eating out was easily $50-100!! i also reduced our sattelite service from $108 to $60.

  • JennyJenJen

    Kept the cable! It was one of the cheapest forms of entertainment out there. Plus, my internet costs more than cable. I chose to call up and lower the rates on the debt I am working on paying off, and really focus on food – since it seems that’s the place we always go astray. It’s easy to eat out with co-workers, or grab dinner with friends, so to have to plan those things out is what has made the biggest change to our budget – and sadly, probably closest to lower our expenses every month!

  • tyler

    I foumd I was paying double for internet ber ween my internet and my data plan on my cell phone. I xut the data and saved $30 a month! My wife and I try to do homecooked meals to keep from eating out, plus leftovers for lumch. Double savings

  • Ellen

    We switched cell phone carriers and cut our monthly costs while still getting a couple of desperately needed new phones. I have also cut our grocery bill significantly by focusing on couponing (thank you iheartpublix.com !!)and by planning menus around sales (rather than just deciding what to cook and buying the ingredients regardless of price!)

  • Alexandra Russo Townsend

    I canceled some phone and cable services, using only my cell phone and I have started walking a lot of places. Helps me lose some weight and keeps my son happy since he loves being outside!

  • Stephanie

    I said GOODBYE to cable and HELLO to Netflix! There are so many options on Netflix, from every season of my old favorite TV shows to new(ish) released movies. Plus if I really really need to watch the latest episode of New Girl, its always online!

  • SandyLI

    I too lowered my cable bill (by $85 a month) and also my cell pohone bill by cancelling off the data plan and texting (iphone) and relying on my wifi- and using a free text app. That alone saved me $50 a month. And hte best aprt is I find neither has felt like any sort of hardship.

  • KateSF

    Right after college, I struggled with budgeting. I had a job, but a measly salary (I was earning about $32k and living in the SF Bay Area), and I wasn’t used to cooking meals at home. A $10 meal from a fast food/to-go restaurant seemed so cheap compared to grocery shopping so I often ate out. When I didn’t, I “saved” money by just eating cereal for dinner. I had no idea just how much money I was spending, especially when it came to the weekend and going out for drinks with friends. After dipping into my savings/credit cards one too many times, I realized I had wasted away my safety net and had nothing to show for it. I thought I was being frugal because I never spent a ton of money on clothes/shoes and vacations. When I finally sat down to look at my previous months of spending, I realized I was spending $800-$900 a month on “eating/going out” – I was floored! No wonder I was broke. It was the shock to the system I needed. I started to make more meals at home and when going out with friends, I would eat at home first and then go out and I kept myself to a budget. I still set my self an “allowance” so I could have some fun, but it was a big change that lead to additional financial growth. Today, 8 years later, I’m making more money but I still follow a budget and I make sure to have some allocated for “fun” so that I don’t fall back into old bad habits. I now take pride in saving money and contributing to a 401k and a Roth IRA.

  • Tammara Payne Tiffany

    We saved for several years in order to purchase a property for our business, which could house the business and us, but have separate spaces (required for our business-no home office). We needed to cut out the 35 minute commute and paying rent to someone else! We found a foreclosure after a long search and a lot of budget cutting. We were able to get an acre of land, a house, and an office building for the price of the land. Now our payment is what our office rent use to be, and we have no gas expense, because we walk to the office. We have some remodeling to do, but since we refuse to borrow any more money, it will be a work in progress (office looks great).

  • sam_the_cat

    I love to watch TV, so I thought I could never cancel my cable, but I made a list of all my favorite shows and realized I could get them all online. Now I’m saving $125 a month and still watching all the shows I want to watch. (Having my parents’ HBO Go password has been very helpful, I have to say.)

    Another easy way I saved money was switching from Verizon to Page Plus, a prepaid phone service that uses Verizon’s network. So for the same smartphone service, I’m now paying $30 a month instead of $100!

  • Curtis Long

    We cut the cable and never looked back…saved us $75 a month for life! Now we’re looking to cut back on our transportation: buying a bike and trying to ride at least once a week to work.

  • Abby

    I feel I’m a pretty savvy saver…I’ve never had cable or internet at home. I don’t own a computer. Some people think I live in the dark ages, but I sit at a computer ALL day at work…when I leave work, I’d like to read a book or interact with PEOPLE rather than another screen! There’s very little I ‘miss’ in the evenings or weekends without having the constant news feed…in many ways I think I gain more by disconnecting on weekends. (Full disclosure, I do have an iphone, so if I need to, I really can look something up or check email…but it’s not a compulsion the way it is with so many of my friends.)
    I also make certain I max out my 403b and my Roth IRA each year.
    I pay down my mortgage a _bit_ extra every month – but not too much as my investments actually earn more than my low interest rate, so I’m better off keeping the mortgage and investing extra money. That one took me a while to really understand, because I thought any debt was bad debt, but once I got out the calculator and ran the numbers, it makes sense!

  • Heather Karellas

    I’ve saved money by taking advantage of free weekly yoga classes at stores like Lululemon and Athleta. That combined with running outside on nice days and biking to work (about 4 miles each way) means no costly gym membership and less money spent on gas!

  • Allison

    I started couponing and using “nicer” meats instead of going out to eat.

  • Kristen Nolan

    Just starting to get my finances back in order, but here’s where I have started: shop only with coupons and stack those with sale prices and other apps that give you money back (e.g., Ibotta); eat out sparingly and smartly; cook larger dishes so plenty of leftovers.

  • April

    I have cut my cost by not reducing the amount I spend in groceries and shopping. I obsess over my spending habits and check my accounts daily to see what I’m doing right and what I’m doing wrong.

  • Diane

    First, I had to get into the mind set that saving money is not depriving myself of money. This Christmas season I shopped online using points from the credit card to buy gift cards for our far away, hard to buy for relatives. You can send them for the cost of a letter. Also, finding super online discounts at my favorite store that includes free shipping. I have some of the gifts mailed directly to those that don’t live close by as well.

  • RWright

    I cut my cell phone cost by threatening to go to another provider. With so many options out there, ANY cell provider will probably give you discounts to get or keep you as a customer. I have free texting and a discounted monthly rate for the next year. :-) not to mention refunds for prior months, when some interesting fees magically appeared on my bill…

  • ash

    I have cut my phone bill permenantly and my cable bill/wifi/home phone bundle for a year with one phone call and got more channels. I would consider using the internet to save money

  • Kat

    We changed our cell phone plan to a non-contract month to month plan and saved close to $50 a month. We are also always looking for ways to cut costs using coupons and store loyalty programs, including online going through ebates or mypoints for holiday purchases.

  • Brent Moody

    Cable is nice; however, we have never had financial struggles. I’m still probably going to cancel it once we end the two year agreement with Direct TV, we rarely watch TV. I think Id rather save the $60/mo or whatever it is we pay now.