Sunday, May 9, 2010

Reducing Your Expenses When You Think You Can't Cut Anymore

I have found that many people think their hands are tied when it comes to reducing their expenses. They assume they can't go any lower on their budget. I am here to tell you that you are probably wrong. I have yet to meet someone who couldn't trim their budget in some way. Even the most frugal of people have a backup plan in case of a job layoff or something. If you are serious about reducing your expenses - either because you have to or because you want to in order to meet a financial goal.

First of all, take a hard look at your expenses. A really hard look. Do you know where your money is going each month? Did you have to grab that magazine when you were waiting in the checkout line? There is $5 you could have in your pocket. Do you really watch all of those movie channels you pay for each month? Drop whatever you can. And if you are in a serious financial crunch then regardless of whether you watch cable or not, drop it anyway. Even if you have teenagers, they will get used to it. We get the very basic of cable to the tune of $13 a month. We can watch plenty of stuff online for free and don't miss the real cable at all.

Let's take a look at all your bills though, not just cable. Some bills are essential, but there are ways to reduce them. For phone and internet talk to your current carrier and see if they can offer you a lower rate. Even if you get it lowered just temporarily it will help you out. For more set bills, shop around. I have several options for where my gas supply comes from and the rates vary tremendously. I also have several options for trash pickup as well.

Some bills are set in stone, such as our water/sewer bill and our electric bill. The only way we can reduce these bills is to use less. It isn't that hard to do really. I can always find ways to reduce my electric bill when I think about it a lot. Pay attention to lights left on, water left running, etc and you will find ways to cut I am sure.

There are many areas of our budgets that are flexible. In drastic situations you can put a moratorium on all spending. Yep even for food. See how long you can go eating just the food you have in your house. We could last a month or so. If you really need to cut your spending, then all clothes shopping needs to cease. No haircuts, unless done at home, no manicures, no eating out, etc. Whether you have to reduce your spending of you want to, these areas should be the first to be cut because they are typically where people overspend the most.

Take a hard look at each and every thing you spend money on. Do you have a newspaper subscription? You can cut that easily. We have reduced ours to Sundays only and we pay less than a third what we paid before. What about magazine subscriptions? These types of things that get paid yearly tend to sneak up on us. The more subscriptions you have the more money you pay. Have you ever totaled it up? While it might be just $15 here or $10 there, over the course of the year you could be spending hundreds of dollars on random subscriptions. See if you can drop any of these. Some you may want to keep, others you may not renew, and others you can cancel mid-subscription and get a refund for your unused amount.

Use what you have before buying anything new. Just because you ran out of ranch dressing doesn't mean you have to run out and buy more. Use the other kinds of salad dressing you already have or make your own with balsamic vinegar and oil. Did you run out of your favorite toothpaste, but you have other kinds in the cabinet. Use those for awhile. Don't buy anything unless you absolutely have to. For me this usually means reducing my grocery and toiletry budget to $25 a week for our family of six for awhile and mostly using what I already have. If I can do that then you can do it too.

When you live on a tight budget it can be frustrating and hard, but it can be done. There is almost always an area you can tighten up. Weekly and monthly expenses can creep up quickly and before you know it you are overspending. Take a hard look at your spending and your budget and figure out where you can reduce. It will help you meet your goals faster and that is always worth it.

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