As we go through life, sometimes we slowly accumulate expenses without even realizing it. Before long we are spending more each month than we can afford, and achieving our financial goals is harder than we would like. If this sounds like you, and you want to have a little more money in your pockets at the end of the month, you’re likely going to need to cut some expenses. There are a few key areas of your life in which this is fairly easy to do, without having to sacrifice too much.
Area 1: Food
Food is one of the largest expenses for most people. Whether it’s the amount you’re spending on groceries, or on meals at work, food costs have a way of quickly adding up. You can’t go without food entirely though, so the key is finding a balance between spending enough to feed yourself, and not going overboard. To start, make a habit of searching for coupons whenever you do grocery shopping. It might not seem like a lot at the time, but saving a dollar here and there adds up over time.
After that, look at what you spend on food at work. If you’re buying your lunch every day, you might want to consider bringing lunch. Dinner leftovers from the night before are a great option, as you don’t have to spend money on more food. Even if you just bring lunch once or twice a week, it will help you to save money in the long run.
Area 2: Your Car
The next big area for a lot of people is their car expenses. It would be nice if the expenses stopped after you left the dealership, but this is far from the case. Each month you need to pay for gas, insurance, and maybe even payments on your loan or lease. Add on top of that maintenance and repair costs, and your car quickly becomes a big chunk of your budget.
A great way to reduce costs is by shopping for new insurance. Many times we find an insurance agency, and stick with them for years, never considering that there might be a cheaper option out there. Compare rates for other insurance agencies in your area, and then look up customer reviews. For example, if Mercury Insurance offered you a good rate, you could then look at Mercury insurance reviews to ensure they are a decent company to work with. Getting a lower rate isn’t helpful if the company is terrible to work with, so be sure to do your research.
Besides that, be sure you are performing regular maintenance on your car to prevent larger problems down the road. Also look for ways to cut on gas costs, such as setting up a car pool, or even taking public transit on some days.
Area 3: Rent and Mortgage
Just like you need to eat, you need a place to live. This means either paying rent, or paying for a mortgage on a home. There isn’t much you can do to scale back here, but if you’re really desperate, consider moving to a cheaper location. You’ll have to pay some upfront costs – such as the cost for movers – but it might make more sense in the long run. Also look into refinancing your mortgage in order to lower your monthly payments.
Area 4: Entertainment and Shopping
Finally, we have the money we spend on entertainment and other miscellaneous items. Maybe you like to go to the movies on the weekend, or enjoy the occasional shopping spree. It’s important that you track how much you’re spending on miscellaneous items, and look for ways to scale back. Maybe you don’t really need that Netflix subscription, or you could only buy clothes when you really need them. Don’t go overboard – you need to have some fun in your life – but think about your priorities and where you really want your money to go.
Sticking to Your Budget
The only way you can really scale back is if you know what you’re spending each month. To that end, it’s important that you are tracking all of your expenses, and seeing where your money goes. Then you can get your priorities in order, and decide the best ways to scale back. Once you’ve done this, you’ll have a monthly budget in place, and all you need to do is stick with it. This is of course easier said than done, but with some dedication, you’ll find that scaling back isn’t that difficult, and that your money situation becomes a little easier to work with.
Comment on the topic Scale Back These Four Areas of Your Life to Cut Expenses?
Tracking your expenses for a month or two is a great way to get a handle on where your money is going. It will give you a clear picture of what areas you need to cut back in. Often we fall into daily, weekly habits that we don’t even realize we are doing.
I agree with those 4 areas. What do you use to track your expenses? I've been asking a lot of people and am curious about the different methods people are using. Currently, I use google sheets to track.