The Psychology of Budgeting, Part 2: There are no sacred cows.

When my husband and I decided to get out of debt in January of 2008 (yes, it’s an anniversary for me!), we knew we were going to need to make some drastic changes in our spending habits.

While we hadn’t been doing anything “extravagant”, we had been living beyond our means. So not only did we need to curb our spending so we wouldn’t be over-spending, we needed to cut it even further to start paying back our debt.

We had a big mountain ahead of us.

And our ability to actually stick to a budget had proven to be rather… weak. (I’m being generous with ourselves.)

So, rather than challenge ourselves to live up to a complex series of budgeting formulas, we took the easy way out: Cut absolutely everything that we deemed non-essential. And then cut some more.

In our get-out-of-debt (GOOD) budget, there were NO sacred cows. All those middle class “luxuries” we had come to think were “necessities”? Gone.

Turns out this easy-way-out approach has actually become the foundation for our budgeting today. Our budget is far more simple then ever before. We keep it easy by having very few categories – and very few expenses. Most are fixed (mortgage, utilities on level pay, etc.) and for the ones that aren’t, we use the (virtual) envelope system.

I will admit that have added in a few heifers since clearing our debt and building our emergency fund, but a lot of the items we cut three years ago are still gone today.

So, what were those former sacred cows that we cut out? I don’t even remember all of them (which goes to show you how un-important they really were in the grand-scheme of things), but here are the ones that stick out for me:

1. Cable (and the DVR) – Gosh, I thought my husband would never agree to live without cable. Turns out, we’ve done just fine. Once we cut it, we realized how little there was to watch anyway – and how much time we had wasted watching that nothing.

At this point, I feel like if I had an extra $70 in my budget, there are 70 things I’d rather spend it on than cable. I’m hard-pressed to believe we’ll ever go back.

2. Water delivery service – Even though I lived in Israel for more than 12 years, there was something about the tap water that never agreed with me. For the longest time, we had used a Brita, but that wasn’t really cutting it. So I switched to buying bottled water at the grocery store, which wasn’t too expensive with a sale. But for some reason, I convinced myself that it was better for the environment to get the delivery service, so we switched.

Well, not only did the delivery cost MORE than buying individual bottles, the water was stored in #4 plastic bottles – which is known to contain BPA. Worse for us and worse for our budget. Buh-bye water service. Fortunately in Kansas, I’m perfectly content to drink the water from the tap – for a big savings every month!

3. Eating Out – Getting rid of this was hard. Very hard. But drastic times call for drastic measures. The one “treat” we left in our budget was our Thursday gelato tradition. And even there, I stopped getting a cone and limited the boys to the “kiddie” sizes.

Fortunately, by starting to meal plan and shopping based on that plan, I found that we had a lot more accessible food in our house – and far fewer last minute “Oy, what am I going to make?! Forget it, I’ll just order pizza or get Burger’s Bar” temptations.

4. Cell Phone Service – We restructured our plan, since we couldn’t cancel them all together (I hear Israel has since changed that rule, but if you were in a three-year contract, you were in a contract. Period.) Had we been able to, I would have gotten rid of at least one of our two phones.

Today, we continue to keep our phones very simple. No text, no data, nothing “smart” about our plan. Other than the fact that we pay less than $50/month for both phones (thanks to a friends-and-family deal with my parents).

5. Long Distance (International) Phone Calls – In the era of Google phone and cheap VOIP, I’m not sure if this is so relevant anymore. But at the time, we were paying a fair amount of money every month to call our parents in the U.S. (fair = at least $25/month). So we stopped doing it. We talked for free over Skype, even though the connection was iffy at times. Or we emailed.

This is one of those examples where the little things really add up. We could have told ourselves “It’s our parents” or “It’s only $25.” But you know what? $25 x 10 is $250. So we bit the bullet, slashed the expense and put the $25 toward debt reduction!

6. Drive Time

Filling up your tank is INSANELY expensive in Israel. In 2008, I was paying about $135 to fill up my Kia minivan’s diesel engine. And it wasn’t a large tank by any means. Even just driving around Modi’in, we were using a tank of gas every 7-8 days. To stretch that tank – and our shekels – just a little bit further, we decided to start carpooling for gan (preschool). I also made a conscientious effort to combine errands. For example, the grocery store was on the way home from my older son’s gan, so I shopped after drop-off.

We’re not as good today as we were during the G.O.O.D. period, but we still are mindful about keeping our transportation costs as low as possible. And yes, little things like CVS’ gas card deal do help, too!

7. New Clothing

My husband and I had a 100% moratorium on buying new clothing for ourselves during the G.O.O.D. period. I might not have liked everything I had in my wardrobe, but I certainly didn’t have a dearth of choices. For the boys, we stretched and scrimped as much as possible. New shoes when the old ones were 2 sizes too small? Yes. New Shabbat clothes when we just liked a new top at Fox? No.

Today, we continue to have a fairly frugal clothing budget – about $25 a month. Many months, we don’t need to buy any clothing, so that just gets added to the clothing fund for bigger purchases. Buying on clearance or at garage sales, saying “Yes, Please!” to hand-me-downs, and making do with what we already have are all ways that I keep us to that $25.

Are there sacred cows in your life that are holding you back from a budget that truly works for your income level (or debt elimination plan)? Can you simplify your budget process by simply reducing your expenses?


  1. well there is one sacred cow i wanted to cancel, the cable. But my husband wouldn’t have it. So i reduced our package.

    We have also been holding off on buying clothing. I tried to hold off for as long as possible. Since I am pregnant, i have needed a few things, but i have kept shopping for new things to a minimum, i bought used clothing and borrowed the rest. So far so good!

    • Isn’t it funny how it’s usually the husbands that are most resistant to let it go. It took some pushing, but once DH agreed to cut the cable, I think it became a point of debt-reducing pride for him!

  2. Yes you can now get out of a cell phone plan here in Israel but if you purchased the phone itself via the cellphone company you still have to continue paying for the phone because they only let you buy a phone from them in about 36 payments.
    Re: cable I wanted to get out of my cable plan but right now the fee to get out of the cable plan is more expensive than keeping it but I know our Minster of Communications, who changed the cell phone contract rules, is working on the issue and a law is in the works to change the cable bill problem. As soon as it passes I will get rid of the cable because as it is most of what I want to see I watch on-line and not on TV.

    • Yes – the two big telecom nightmares. When we left Israel, we still had 18 months on our cell phone contract. We tried to buy it out by paying off the balance on the phone and the amount they quoted us was INSANE. My husband lost about 20 hours going back and forth with this people – and of course, every person he talked to said something different. It was soooo maddening. That 150NIS/month x 18 months killed me psychologically, but I refused to give them over 12K to buy out our contracts. (Darn that Orange. Grrrr.)

  3. Sacred cow-day school tuition.

    We have no cable. Our water comes from the tap. The cell phone costs us very little each month. We have unlimited calling to the US and Canada for $24 a month. We carpool to school and work. My kids clothes come from freecycle; the only new clothes we get are underwear, socks, and leggings from Target. Our dishes are hand-me-downs. But we send our kids to a ridiculously expensive school that spends money like it is going out of style. And for now, I cannot imagine giving up that luxury.

    • You are very right about day school tuition. And yes, at the time, that wasn’t an issue (although we were paying for “gan” so I guess if things had gotten really bad, we could’ve kept my then 5 year old home. Oy!)

  4. I agree with Julie. The biggest sacred cow that you don’t discuss — perhaps because you were in Israel at the time, where it wouldn’t be relevant — is day school tuition. Yes, it is a question of values and spending priorities more than comforts and luxuries, but its scale is far more dramatic than cable or a latte habit!

    • Yes indeed, Rachel. Plus our oldest was only 4/5 during the GOOD phase.

      More and more, I am hearing about friends homeschooling, or sending their kids to public school and supplementing with after-school Judaics. I think the tuition crisis will only grow larger – I honestly don’t know how families do it with 3 or 4 (or more kids). As you know, our tuition in KC is far lower, and we’ve only had one child in school until now.

  5. I am not sending our two boys (ages 6 and 4) to day camp this summer. It would have cost us about $4000. Instead I am going to take the children on cool day trips. I have come up with a $2ooo budget to spend over the summer to go on these trips plus I am looking for low cost ideas to do. If anyone has any other good ideas to do with the kids please feel free to share them with
    me. Thanks.

  6. My cow is also tuition. What i pay for out of state Yeshiva and Cheder tuition pushes over our limit every month. We have junk cars from Craigslist, no cable, tap water, no long distance and cheap cell phone plans. I buy clothes on big time sales for the next year. We are barley making it financially but i know this is part of the life so i thank Hashem i can send my kids at all.

  7. Cable! For almost 2 years I have been trying to convinnce my husband to cancel cable, every single show and movie can be found online! Every few months we reduce our cable package and finally we are down to the basic channels. This week he tell me he wants to cancel cable. WHAT! We agreed to cancel cable and keep netflix for $8 a month. BTW the cable company upped our internet bill (we get internet and cable together) because we canceled. We used to pay $30 a month for internet now its $45. But we are not paying for DVR or ‘renting’ the box and remote. So we’re saving something, not much though.

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