Reducing Your Expense.
Take out your cashflow statement. Then prioritize your expenses. After that, you are ready to figure out how to reduce expense. It is best to do this exercise with your family or spouse. What is trivial to you may well be important to them and vice versa. Everyone should understand the significance of the budget and come to a compromise.
When reducing your expense, always start with the lowest priority expense. This way, reducing the spending will have less impact on your lifestyle. For example, if talking on the phone is more important to you than dining out then you'll feel less impact when you reduce spending on dining out by $50. You will feel more pain if you reduce your talking time on the phone by $50.
Less Is More
Instead of dining out in fancy restaurants every weekend, you can reduce your dining out to one or two times in a month. If you drink coffee everyday, then reduce the number of cups of coffee.
Get A New Job
This is a valid choice if you spend a hefty amount of money on traveling to your office and “out of your own pocket expenses” related to your job.
If your office dress code is corporate you may have to spend some money to keep a decent wardrobe. Switching job to a company with casual dress code could save you a lot in the long run.
Having your workplace near your home means less traveling. It is possible for you to sell your car and rely on public transport or have your spouse drive you to work. If you have to keep your car, at least with the shorter distance you will save on petrol, gas and car maintenance.
Also consider the employment benefits that come with the job. If the employer provides child care facilities, then you can save on hiring a nanny or baby-sitter.
Move To A Smaller House
The benefits of living in a smaller house include lower mortgage or cheaper rent, lower utility bills, less furniture and belonging, less repairs and maintenance. It is therefore common for families facing financial difficulties to move from a larger house to a smaller house.
Moving to a smaller house is not easy and will impact your whole family. Everyone has to play a role and adjust to their new lifestyles. Also, the savings has to be large enough to justify the moving costs involved.
If you move to a smaller house, choose a location closer to your workplace, school and public transport so you can save on traveling as well. This is killing two birds with one stone.
Borrow If You Can
If you can borrow, then borrow. There is no reason to buy if someone is willing to lend them to you. This applies to items you rarely use or items you use only for one time. Examples are magazines, books, DVDs, barbecue set, camping tents and luggage bags.
Take good care of the items you borrow. If you break or spoil them, then you will have to spend money to replace or repair them.
Buy Quality Items
Spending a bit more on quality items will save you money in the long run. Low quality items that need frequent repairs and replacement will burn a hole in your pocket. Read consumer reviews and compare products to find the best bargains.
Use The Discount Coupons
Scan through the flyers in your mail box, magazines, newspapers and on wrappers of the products you buy. When you see discount coupons for products you buy, cut out the coupons and keep it in a box.
When you go out for your shopping flip through the coupons in the box first before you leave the house and bring along the coupons for products you plan to buy.
Price Matching
There are many retailers out there providing lowest price guarantee or price matching.
When you go shopping, always bring along flyers from a few different retailers. When you are shopping at Retailer A, compare the pricing with Retailer B. If Retailer B is cheaper then when you checkout at Retailer A, tell the cashier to match the price of your item to the cheaper price of Retailer B. This way is more convenient and cost savings for you because you don't need to buy some items at Retailer A and then travel to Retailer B to buy the other items.
Next: Increasing Your Income.
Previous: Prioritizing Your Expenses.