Tips for trimming expenses
One of the reasons we don’t like to put a budget on paper is because we’re afraid to learn the truth about our spending habits. In theory, a budget is extremely simple: less should be going out than is coming in. In many situations, the more controllable part of the equation is the amount that we are spending. So that’s the place to sharpen our pencil. It often comes down to sorting through what we really need versus those things that we don’t.
If the idea of putting together an entire budget is daunting for you but you know in your heart (and your wallet) that you are spending more than you are earning, then take the first step of trying to identify a few ways to trim your expenses. It’s like taking that first step to cut sweets from your diet in order to start losing a few pounds!
- Take a to-go cup of coffee from home instead of dropping by your favorite coffee shop on the way to work.
- Pack your lunch instead of eating out.
- Don’t allow yourself to withdraw more cash from an ATM than you need for a specific purchase (and be sure the purchase is really necessary!) That leftover cash just seems to disappear too easily from our wallets.
- Carpool to work – or, if available, use public transportation.
- Walk, hike, or ride your bike – instead of having an expensive gym membership.
- Wait until the end of the season for clothes shopping to take advantage of deep discounts – and consider outlet stores.
- Use coupons – but don’t be tempted to buy things you don’t need or to buy name brands instead of store brands just because you have a coupon. Buying the store brand may still be less expensive than the name brand item with the coupon.
- Put off replacing your car and/or buy a good used car when you need to replace your vehicle. And buy one that gets great gas mileage.
- Consider higher deductible insurance on your home and autos. It should lower your monthly premiums. If you have an older vehicle that you no longer have a car payment on, you might even consider removing collision. Be sure that you understand the downside of either of these cuts before you consider them: if something did happen, would you be able to come up with the higher deductible? (Think about putting the money you save by lowering your premiums into a savings account – at least until you have saved enough to pay the higher deductible should you ever need it.)
- Look at ways to reduce your “telecommunications” expenses. If your household has multiple cell or smart phones, cable television, wireless Internet, a land line, etc., there are likely numerous ways to reduce your overall costs. Compare and/or downsize plans.