Well Clever Dude talks about cutting expenses if necessary in a 3 part series. He asks what could you cut?
Well there is a lot of fat in my budget sadly. I could easily cut our cable down to basic internet, no home phone and no cable. So from $130/month to probably $40. Savings $90/month = $1080/year. Yowsa. Maybe we should consider it anyway.
Second up eating out. Tracking our spending we spend about $200-250/month. However this would be completely eliminated. If we didn't have a job, then eating would be necessary but not eating out. Also our food budget of $300-400/month would be decreased $200-300/month. That would mean eating less meat and buying more processed/canned goods. We would no longer be picky but eating more from coupons. This would be the first thing back in our budget however. Savings would be $300-400/month, wow $3600-4800/year! That's an insane amount of money.
While it is feasible to stop the eating out or lower it, I will definitely not jeopardize my family's health for a couple of bucks savings on groceries. I think cooking from scratch and not eating processed foods important to us. It invests in our cholesterol, blood pressure, weight, etc. This has long term affects like being healthy as we age. Lowering our future medical bills. So groceries I definitely look at as an investment more than just costs. So I would try to eat healthy just for less.
Third, would probably be our dogs. If we couldn't care for them we'd have to find new homes. I think they reasonably cost us $200/month for food, medicine, vet bills, boarding, grooming, etc. If I couldn't provide adequate medical care and time, I would be obligated to find them a better life. Now this is a very last resort for cutting expenses because we do have a responsibility and obligation to having adopted our dogs.
What else? I'm not sure what other luxuries we have. We aren't huge spenders and we'd go into lockdown mode, meaning we buy nothing other than groceries. We've lived like that before and I hated it. And we can do it again.
A final step in cutting expenses I think would be selling one of our cars and $4k from the sale. We would also save $75/month in car insurance. But the major depreciation hits have already occurred and both cars are paid for. And looking at lost opportunity cost it would be @ 10% = $400/year since our cars aren't worth much. But that's another sacrifice we might investigate if we were really broke without jobs.
Also we'd never vacation or visit home if we didn't have jobs. That would save us $3-5k/year. Right now our luxuries in our budget that seem disposable are eating out and cable. The savings on those two items are pretty large we'd save about $3-4k/year. Add in vacations and we'd be looking at $9k/year. However the other costs of a second car, better quality food, and pets I'm not sure would be worth the replacement factor.
As I write this, I've decided to downgrade our cable and lose all movie packages. This will save us about $30/month. What are luxuries in your budget?