Anyone that knows me has heard me say time and time again, “It is not what you earn that matters, it’s what you spend that makes the difference.” I believe too many people focus on making more money; instead they should reduce spending to expand the money they already earn. Last week we reviewed how to tweak and make a budget that fits your lifestyle. If you missed that post, you can read it HERE. Today, I want to focus on the expenditures. I want you to take a moment and really look at how much money you are spending in each category. Does this spending represent the lifestyle you wish to live? Most individuals have some type of financial goal. Whether it be to stop living paycheck to paycheck, get out of debt, or just get to a place where they have an emergency savings so they are not worried about the “what if” that could happen.
Financial freedom, to me, means being able to sleep well at night, knowing you have a plan for your money, and understanding where your money is going. Increasing your income is always one way to help your overall budget, but some individuals are already working two or three jobs and are struggling to make ends meet. They do not physically have the time or energy to add another job to their day. This post is to try and help those of you in that situation. I remember a time when I would eat dinner only three nights a week because I had to choose between gas money to get to work or groceries. Below are some tips I used to cut expenses and reduce spending.
1-Get away from the large rent or mortgage payment. There are several ways to handle this. If you have an apartment with an extra bedroom, check into getting a roommate to share the monthly rental fee. If you have a large house, you can either downsize, or again, think about renting out a room to cut costs.
2-Cut all unnecessary monthly bills. I canceled the TV cable and home phone. I did not have gym memberships or anything like that to cut, but if you do, nature provides an amazing gym for FREE! I read books for free from the local library instead of watching TV, and chalked it up to another time I was able to reduce spending.
a. Heat / Air: It is nice when the heat is set at 70 degrees, but I promise, you won’t notice if you set it at 65 and throw on a sweater and socks. If you are lucky enough to have central air conditioning, you can set it at 75 and still won’t be uncomfortable. All while saving money!
b. Electricity: Be sure to turn off the lights for as long as possible and always when you are not in a room. Do you have any natural light that you can use instead of turning on the house lights? Are you unplugging things when they are not being used? Even if they are off, they are using electricity if still plugged in.
c. Water: This may not be popular, but try to shower every other day instead of every day. Of course, if you have body odor issues, adjust as necessary, but if possible, try it and see if it works. When you are in the shower, time yourself to 4 minutes. Focus on getting in, getting clean, and getting out, and cut down how long you are in the shower. Same with brushing your teeth (do not skip a day!) but you can turn the water off while you are brushing and only turn it on while rinsing. Are you making sure the washer is full when you run a load of clothes? If you have a dishwasher, are you making sure it is full before running a cycle? Is there a way to capture rain water to use for watering plants?
4-Car pull or walk / ride a bike when you can. Do you have two vehicles? If so, do you need two vehicles or is it more convenient? Are you making payments on both vehicles? Is your vehicle more than your needs? Just like your home, downsize if your car is more than your actual need. You don’t have to have a vehicle that seats 7 if there are 4 in your family. Gas for your vehicle is an expense most people chalk up to being necessary. You can ask around at work to see if there is someone willing to pick you up and drop you off, or if you are within 10 miles, you can ride a bike for free. Remember, anytime you don’t drive the car is another time you can reduce spending!
5-Use coupons and grocery bonus cards. I never really got the hang of coupons until my 30s when I had to feed a family of 4. It was different when I was alone and could skip meals. The first real success story was at a local CVS store. They have deals each week and offer bucks back on certain items. I would pair those deals with the weekly coupons and get almost all our hygiene items for free. Talk about a great way to reduce spending! I treated it like a game, and I loved the feeling of walking out with free stuff. One trick I learned – you don’t have to wait until your next trip to use your bucks back. I would checkout all the items that get bucks first, then have a second order and use the bucks to pay for that order. For me, it was easier because I wasn’t losing the bucks or forgetting to use them the next week.
These are just some ideas to think about if you need to reduce spending. Feel free to share what has worked for you in the comments below.