How do you actually lower your expenses? Big cuts in your budget aren’t the easiest thing to handle, especially when you’ve already been living on beans and rice. So how do you lower and keep your expenses down without losing your mind in the process? Here are some things to keep in mind when lowering expenses. How NOT to Lower Expenses You might be tempted to do across the board cuts. “Cut it all,” you might say to yourself! After all, it’s easy math and you don’t have to think about what you’re cutting. This isn’t a good solution to a spending problem. By cutting all your categories by a certain percentage, you’re risking becoming under budget on a few key categories. For example, across the board cuts might mean you can’t go see the doctor because your “Medical” fund is empty. Or you might not be able to afford your car insurance because you recklessly cut everything. Three Better Ways to Cut Expenses There’s a better way. Here are three ways you can cut your expenses without going crazy! 1. Cut a percentage off of discretionary spending categories. Identify spending categories that you consider discretionary. For example, these might include: Entertainment Eating out Fun money Date money Try cutting these categories by 10 or 15% . You probably won’t notice much of a difference throughout the month! But here’s the real challenge: if you survive these cuts, try lowering your discretionary expenses again the next month by the same 10 or 15%! Keep doing this until it becomes unreasonable and you find the right amount of spending money to keep you sane. 2. Search for one category you can heavily cut. Remember that across the board cuts don’t work. But if you try and reduce one category heavily, you can save a lot of money without dramatically reducing your lifestyle. Here are some ideas: Shop around for lower car insurance premiums (or take higher deductibles to lower your premium). Refinance your house to a lower fixed rate. Get rid of your cable television and get in the habit of reading books instead! The possibilities here are seemingly endless. Look over your own personal budget and find that key area where you are overspending and can reduce. 3. Don’t be a victim of advertising and bring a shopping list. Have you ever been shopping and something sparkly and wonderful caught your eye? It was that “must have” item that you never intended to buy, but threw into your shopping cart anyway. Watch out for advertising that is designed to get you to spend more than you really should. You can do this by making a shopping list before you step foot into any store! Even if your list is only three items long, make sure to write down the items you’re intending to buy on a sticky note or in your smartphone. Side Note: While you’re shopping, you might want to bring along a cash back debit card to save an extra bit of money. We’ve saved over $500 per year doing this. Shopping lists are visual reminders of a time when we weren’t in awe of some new product that promises us the world (a time 10 minutes prior to us entering the store). Keep your shopping list close by your side and only get what you intended to buy. “But John, what if I see something that I forgot about and have to purchase later anyway? Shouldn’t I save time and get it while I’m at the store?” Yes, but only if it falls into a category that is not considered discretionary. Things like toothpaste and toilet paper are fine. But don’t go for the extra box of cookies or a “must have” sweater that is oh so cute . You get the idea! I consider your budget the second line of defense (against overspending) and shopping with frugal intent the first line of defense. Cutting your budget isn’t enough. You have to follow your plan! Now go cut your expenses and save some money! What are some ways that you save money at your household? Meet us in the comments and let us know what you plan on doing to lower your expenses! Image by Melinda Fawver / Shutterstock Related Articles: Setting A Monthly Budget: What’s The Most Efficient Method? Envelope Budgeting: A Closer Look Practical Budgeting Tips to Manage Your Money Better Developing A Strong Monthly Household Budget How To Save Money On Groceries – 13 Tips A few great ways to save money Cash Envelope Budgeting: A Modified Approach to Control Spending John Frainee is a personal ﬁnance writer at TheChristianDollar.com . His goal is to provide biblical ﬁnancial principles that encourage people to live healthier lives. Beyond personal ﬁnance, John enjoys spending time with his wife and two crazy cats, playing a competitive game of Monopoly, and reading just about anything he can get his hands on. You can also ﬁnd him on Twitter and Facebook . The articles on this site are for entertainment purposes and should not be taken as financial advice. Please contact a financial professional for specific advice regarding your situation. Also, many of the CPF articles help us pay the bills by using affiliate relationships with Amazon, Google, eBay and others. Find out more here .
How to Lower Your Expenses Without Losing Your Mind!