By Lake
BillSavings.com Brief: If you are serious about improving your financial picture, no tactic may be more important than trimming the excess from your spending. Though on the surface it may seem difficult to identify what excess needs trimming, it might be easier than you imagine. Learn how to identify what the fat is, and how to cut it from your monthly expenses.
If you are serious about improving your financial picture, no tactic may be more important than trimming the excess from your spending. Though on the surface it may seem difficult to identify what excess needs trimming, it might be easier than you imagine. Here are some tips to help you identify what the fat is, and how to cut it:
Where is the fat?
Some people, it is a good idea to look at reducing spending across the board. For others, it might be better to cut some categories significantly and others not at all.
For example, you might choose to cut the amount of money you spend on everything by 10% - gas, entertainment, food, etc. Perhaps, you might choose to cut your entertainment by 50%, while leaving everything else alone. You have to sit down and make an honest assessment of where you can and/or should reduce your spending.
Change your spending habits
Many people spend more money out of habit than they need to. For example, you may have started shopping at a store near you out of convenience. However, a little shopping around and some quality calculator time might prove that you can save a bundle by shopping at a store that is just a little out of your way.
Additionally, you might have stopped at a local coffee shop a few times on the way to work, and now it is a habit. That is not to say that you should deny yourself simple pleasures in life, but it is well worth it to ask yourself if you really need it this morning, rather than spending that money out of habit.
Another habit many people have that is easy to change is shopping without a list. Make sure you sit down and find out what you really need before you go to the store. Many people go to the store because of a couple things they need, then end up buying several more items they did not need. Making a list and sticking to it can really save you a lot of money.
Make your existing expenses more cost effective
You can keep buying the things you buy in a much more cost effective manner. Here are a few tips to help you accomplish this goal:
- Buy food in bulk – Many stores have bulk bins that are much more cost effective way to buy everyday consumables such as flour, grains, even cereals and snacks. Buying these items in this way is much cheaper than buying the same quantity in a pre-packaged manner.
- Buying larger quantities – There are “warehouse retail” or “wholesale clubs” type stores that make purchasing everyday items much more cost effective by selling them in larger quantities. Granted, it might take a single person a lot longer than a family of four to use a gallon of mayonnaise, but the cost savings makes the larger quantities well worth the purchase.
- Take advantage of opportunities – Keep your eye out for unique opportunities. A store going out of business or one that bought too much of one item might be offering an unheard of price for an item that you use. Even if you do not need that particular item at the time, if it is something you use regularly, saving 50 to 75 percent makes it worth it to stock up.
- Use the buddy system – Whether you are single or are good friends with another family, find someone you are comfortable with that can split the cost of large quantity purchases. This is particularly useful for situations when space is limited. Using this tactic can give you the large quantity prices while still being able to close the cabinet doors.
Eliminate unnecessary expensesWork to stop spending money on things you do not need. This is a source of high spending fat for many people. You will have to be honest and ask yourself if you really need what you are about to buy. It will not take much to identify what those things are if you really think about it.
Inventory your shopping cart before you go to check out. Are there some items that you really do not need? Edit your selections until you feel good about everything you have selected, and you can check out with a clean conscience.
Other spending fat sourcesMost people have several things they do not use as much as they think. Ask yourself if you could stand to reduce or eliminate any of the things you do not need or use enough to make the expense worth it. Some examples might be magazines and club memberships (health, country, book, etc.).
The lean truthWhen you take an honest look at everything you spend your money on, it will be easy to recognize where you can stand to trim some fat. If you do that, it will not be too long before you find yourself in a better financial state than you were before you went on a “spending diet.”
1/1/2008
