How to cut back on the smaller expenses

dollar_signOne way of increasing your income coming in every month, is to cut back on needless, smaller expenses.  Do you have a phone with every feature and on top of that the unlimited blackberry, ringtone, data e.t.c subscription services?  Do you have a Cable or Satellite subscription with every available channel?  How about premium coffee everyday bought in the mornings?

Simple things like these really add up and it’s up to marketing professionals to make you believe that you need every little luxury under the sun.  That’s why our income falters month after month. As someone on the path to Financial Freedom, your job is to increase your income, not decrease it.  Now is the time to get out your little expense journal and go over every little expense with a magnifying glass.  Ask yourself, can I cut this expense completely or downgrade it and enjoy the benefits associated with increasing my income by doing this.  If you can get your expenses down, your savings will go up.  It’s just that simple.

A good personal example is when I downgraded my premium channels on my satellite and got a better cell phone plan matched to how I used my minutes.  These two little changes have saved me at least 50.00 per month.  However, that 50.00 can go towards my investment or clearing off debt in order to increase income in the future.  To build wealth, you must become your own financial advisor and money manager.  No one else will do it for you without a fee.  When we become good with our money, good things start to happen in our finances. We start seeing abundance because we are taking action instead of inaction with our financial well being.

First thing you want to do to cut expenses is set a short term goal.  Ask yourself, can I find a way to cut maybe 100.00 worth of expenses this month?  If this goal may be too big or unrealistic, start smaller – like 20.00.  Once you are able to cut expenses, especially fixed expenses, you start gathering momentum and able to reap the benefits of more money in your pocket, month after month.  Is there something that you could totally live without?  Let’s say something like a music service for 10.00 / month.   If you instead listen to the radio, cd’s and so forth; you just saved yourself another 10.00.  It may be small but it all adds up to real money.

 

Now that you are finding all this extra money, what do you do next?  Well, you definitely don’t want to spend your new found money frivolously.  Take that money and store in the highest interest bearing account you can find.  When it grows large enough, move it to a CD that matures constantly to get the benefits of the law of compounding interest on your side.  You want this money safe and also growing by adding to it.  So, get a good grip on your finances, and get started taking a hard look at all of your personal expenses today.

 

Here are a couple quick tips that you could get started with and of course you could add to this list.  If you are a smoker, quit smoking.  You will become a lot healthier (and maybe live longer) plus you could save an average of about $1,400 year and more if you smoked a pack every day!  Have daycare for your kids?  Check out another daycare in the area with similar care quality and costs a little less.  Get a StarBucks Coffee every morning?  Tackle this miscellaneous spending and make your own roast at home to carry in to work and you could save yourself 1.50 per cup and up and higher!.  That’s around 20.00 or so for an average work week.  Tackle those luxuries like Satellite and Cable.  They are savings there as well.  Go after the cell phone guys next.  You don’t need to be that connected!  The list goes on.  Get creative and get a friend or spouse on board for even more ideas.  To your Success!

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Category: Financially Elite Blog