Tips for cutting your monthly expenses in half


Now this is a tough one. How do you cut your monthly expenses in half? There will be some significant thinking outside of the box if you’ve never experienced this. Here’s why. Most people tend to accumulate fixed expenses even more than variable expenses in a given month. Your fixed expenses are the ones that you really need to hammer on if you will realize massive savings while controlling your variable expenses. To cut your expenses in half, you need a two-fold approach. First, you cut expenses one by one and study each one carefully. Do you really need that lawn service or do your kids need to go to the most expensive school in the district? It takes a very disciplined approach to cut your expenses but you will reap the rewards sooner than later. Two, you need to find a way of increasing income. If you are going to work, you might as well gain leverage in maximizing what you are paid for the hours you put in.

The first phase of the approach of cutting your fixed expenses is fairly straightforward. You cut anything that is totally unnecessary to your daily living in a given month. Increasing your income, however, is not so simple. If you are an employee you must show that you are the most valuable person at your workplace to your decision maker (manager). You should be the first one in and maybe the last to leave. All this work you don’t want to do in vain though. You are shooting for a promotion. If you are in sales, you shoot for sales manager. If you are in product development you go for a project manager role. How do you get there? By any means necessary. You may have to read books on the subject or even take night class training in that discipline.

You want to take massive action as most employees around you are more interested in a paycheck. You are interested in taking your career to the next level. The quicker you get there and the bigger the salary increase, the faster you can cut your expenses in half because of an influx of income coming in. You may even get there by taking on a second job at nights in a field you might like. Worse case, you could interview for a better paying position (don’t quit your day without a job offer though). You do what is necessary to get you closer to your goal of financial freedom.

If you are a business owner, it’s even easier. You are making most of the pie as opposed to getting a piece of the pie. YOU make the rules. A good increase of revenues for you may be as simple as picking up another big client or a few smaller clients. It may be increasing your product sales by a certain percentage. At the same time for you, it’s even more paramount to keep your expenses as low as possible. You have leverage on your side from the get go. Basically, you want to increase your revenues by any means within the law. The key to your success will be to keep larger expense items like payroll in check.

If you can do these two basic fundamentals of reducing your expenses further and in turn increase your income (revenues), it is very possible to cut your current expenses in half mostly by earning more. Do these two things and you will be on your path towards Financial Freedom.

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Category: Financially Elite Blog