Worked Examples
Seeing how these strategies play out with real numbers can make them much clearer. Here are a few examples of how the advice in this guide can translate into tangible savings and better budget management.
Example A: A $40 Monthly Electric Bill Reduction
Let’s revisit John and Sarah. Their average electric bill was about $110 per month. They decided to make three changes. First, they spent $30 to replace the five most-used incandescent bulbs in their home with energy-efficient LEDs. This simple swap saved them about $5 per month. Second, they bought two smart power strips for their entertainment center and home office, costing $40 total. By turning these off at night, they eliminated the standby power drain from their TV, cable box, and computer, saving another $8 per month. Finally, they started washing all their laundry in cold water and lowered their thermostat by two degrees in the winter. This combination reduced their bill by an additional $27 per month.
Total Monthly Savings: $5 + $8 + $27 = $40.
Payback on Investment: Their initial cost for bulbs and power strips was $70. With $40 in monthly savings, their investment paid for itself in less than two months.
Example B: Revising a Budget After a Rent Increase
Suppose John and Sarah receive a notice that their rent is increasing by $75 per month, from $1,200 to $1,275. Their fixed income of $2,500 hasn’t changed, so they need to adjust their budget to absorb this new cost. They sit down and review their variable spending. They decide they can save $30 a month by planning their meals more carefully and reducing food waste. They also call their cable and internet provider and switch to a smaller package, saving $25 a month. Finally, they decide to cancel one streaming service they rarely use, which saves another $15.
Total Cuts: $30 (groceries) + $25 (cable) + $15 (streaming) = $70.
This almost completely covers the rent increase. They decide to pull the remaining $5 from their small discretionary fund. By making small, targeted cuts, they managed a significant new expense without major lifestyle changes.
Example C: Water Savings from a Low-Flow Showerhead
A standard showerhead can use 2.5 gallons of water per minute (GPM). John and Sarah bought an EPA WaterSense-labeled showerhead for $25 that uses only 1.8 GPM. They each take an 8-minute shower every day.
Old Usage: 2.5 GPM * 8 minutes * 2 people * 30 days = 1,200 gallons per month.
New Usage: 1.8 GPM * 8 minutes * 2 people * 30 days = 864 gallons per month.
Monthly Water Savings: 336 gallons.
They also save on the energy used to heat that water. Combined, their water and energy savings come out to about $6 per month.
Payback on Investment: The showerhead cost $25. With $6 in monthly savings, the new fixture paid for itself in just over four months. After that, it’s pure savings.
