How To Build A Budget Series Step 4: Reducing Spending


Last week Clever Dude featured a series of posts all about building a plan for your money. I can’t promise that it will be THE solution for someone struggling to find a way to manage their finances, but it’s at least a guideline that can be used as an initial blueprint.

The final post in our series examines the scenario in which a person simply doesn’t have enough money. Someone could follow the exercises and find that they are accumulating debt because more is being spent than earned. Or, someone might just want to introduce a new level of frugality and value into their spending. In any of these cases, there are several actions that can be taken to help you get the very most for your hard earned money.

How much action is needed may depend just how big of a change is needed or wanted. Whether you can’t meet your monthly financial commitments or if you want additional discretionary funds, more can likely be squeezed from your monthly budget.

Reduce Essential Spending

Take a look at how much you spend on your life essentials. Some suggestions are:

  • Examine reducing gasoline costs by using public transportation, biking, or car pooling
  • Reduce grocery and household goods spending by using generic products
  • Reduce grocery and household goods spending by finding less expensive meal options

Comparative Shopping

Analyze all your monthly expenses and do comparative shopping for those that you could potentially get the same service for cheaper with a different provider. Examples of such monthly expenses are:

  • Car Insurance
  • Mobile Phone Service
  • Garbage Collection Service

Reducing or Cutting Services

Take a hard look at your monthly expenses and find expenses that you can reduce or even cut completely. Such examples are:

  • Mobile Phone Service
  • Home Phone Service
  • Cable or Satellite Television

Increase income

If your financial situation is extremely negative, or you’re just not willing to cut/reduce expenses you may consider increasing your income. By getting a part-time job and even working one or two shifts a week can add a significant amount of income to your budget. Consider if you got a part-time job that paid $10 an hour. If you would work just 10 hours a week, you could add $100 a week, or $400 a month (before taxes) to your income.

Taking any of these actions is hard. It’s hard making permanent behavioral changes. But sometimes it’s necessary to make some tough choices and change how you spend your money, temporarily or permanently, to reach your financial goals.

How about you Clever Friends, how often to you analyze how you spend your money? Have you ever had to make some tough choices and make some significant changes to your spending habits?

Brought to you courtesy of Brock

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Brock Kernin

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