With the new year in full swing, people are doing their best to stick to the freshly made New Year’s Resolution’s they mapped out for themselves. The most common resolution always seems to be losing weight. Instead of going with the status quo resolution this year, why not try to trim something else? Your budget perhaps?
How to cut my expenses? Is a question often asked by many in order to free up funds in their daily lives? Maybe they are living paycheck to paycheck, maybe they are trying to save up money for a special purchase, either way trimming your budget is the best way to go about doing this.
For starters, you need to have a budget. You can download a free budget template and simply put in your income and expenses. The best part about budgeting is you get to see where your hard-earned money is going every month. Perhaps you are spending a large portion on eating out, can you bring your lunch instead of going out to eat? If so, you might be able to not only cut some expenses but trim your waistline also.
The free downloadable budget allows you to choose the expense categories you have for a given month. Say for example you spend $100 a month on your cellphone bill, can you change service providers and possibly get the monthly expense down to $80 per month? If so, you have freed up $20 per month or $240 for the entire year. Can you trim $10 a month off your grocery bill by purchasing generic products versus name brand? This can be an additional $120 in savings for the year. Attempting to save as little as $10 to $20 per category for a few of your monthly expenses can add up to some awesome end of the year savings.
Below is a quick easy way to trim your budget:
- Create a budget: If you don’t already have one, now is the best time to start budgeting. This will determine where you are spending your money every month.
- Track all of your expenses: See just how much you are spending in the various categories every month. Some may surprise you.
- Pick 2-4 categories: By selecting a few categories where you think you can cut some expenses you will maximize your yearly savings.
- See how much you can cut: It can be $5, $10, $20 or maybe even more per category per month. Living on a little less each month won’t change your quality of life for the worse. Instead, you can use the money saved to enhance it by saving up for a vacation or a future purchase.
- Don’t incur new expenses: While trimming your budget to save up money is the ultimate goal, don’t incur new expenses during the process. A car payment or a gym membership will quickly eat away at the money you are trying to save.
Stick to it: Trimming your budget will only be beneficial to your wallet if you stick to it. Developing discipline for sticking to a budget can be tough but also very rewarding.