6 Simple Steps to Reduce Monthly Expenses

Studying your spending habits on a monthly basis is the best way to determine where exactly you are going wrong financially and reduce your monthly expenses. If you are not in the habit of evaluating your spending, it is quite possible that there is exactly where you are going wrong.

As I mentioned in my previous post, Top 5 Best Ways to Save Money, if you wish to see your money accumulate, you need to be intentional about it. You need to actually do something so that you can see positive results. Most of our spending habits are subconscious and until we become fully aware of what we spend our money on, we can never truly know where we go wrong.

6 Steps to Reduce Monthly Expenses.

Step 1: Take account of all spending.

The first thing you need to do is to identify all expenses. For one month, you will need to record all of your expenses, preferably in a notebook. If you buy a cup of coffee on your way to work, note it down. If you were running late and used a taxi, note it down.

At the end of your study month, sit down, go through all your expenses and categorize them into two columns, ESSENTIAL and NON-ESSENTIAL.

Next, tally up the total amount of money spent on each column, if the non-essentials way out the essentials- there is your answer!

Often, I find that people are usually shocked when confronted by the reality of their spending habits. It can be quite the surprise realizing that you eat $200 worth of fast food per month however, don’t worry you can only get better from there.

Step 2: Control your utilities.

Growing up, my father always insisted on us never leaving an empty room with the lights still on.  Although I did not see the significance of this small action, I still followed his advice albeit reluctantly. Fast forward, years have passed and I understand what he was trying to teach us.

When it comes to cutting down on monthly expenses, every coin counts. Save up on electricity by switching off the lights. Save up on your water bill by having quick showers.

These small actions contribute to the larger whole. You will be pleasantly surprised at the end of the month to find your bills lowered even if it is by a few bucks.

Step 3: Pay off your debt.

When it comes to debt, it is ALWAYS easier to get ahead of it- when you can. In my previous post, Top 5 Best Ways to Save Money, I advise on the importance of including your debt in your monthly budget.

If you intend to get rid of it, you need to have a plan on how exactly you plan to go about doing so- which I know is easier said than done. When it comes to paying off debt, I like to think of it as an investment in your freedom. Being in debt is stressful and tiresome, for that reason it is not very wise to prolong such torment. Sooner or later you will have to pay back money owed. If that’s the case, always opt for sooner, never later.

If you think you might need professional help tackling your debt or any financial hiccups, Financial Help for Families is a reliable finance company that specializes in providing financial advice.

Step 4: Reduce money on transportation.

According to a recent statistical survey, the average cost of maintaining a car is $8300! It therefore goes without saying that the average person, working an average job earning an average wage simply cannot afford this.

On the other hand, a whopping 95% of American households own cars…absurd.

One sure way to reduce on your expenses is by cutting your transportation costs. When you can, use public transport or carpool. Save money you would have spent on fuel. If you truly wish to go green, sell your car.

Step 5: Reduce money on entertainment.

Entertainment, every so often, is good. However, it is even better within controlled financial boundaries. Instead of going out, I always recommend entertaining from the comfort of your home instead. Instead of splurging on expensive store-bought goods, how about a meaningful handmade gift instead? Instead of going on an expensive date at an expensive dinner how about an intimate homemade dinner instead?

When it comes to reducing your monthly expenses, you just need to go about it cleverly. You don’t need to be frugal, you just need to be nifty.

Step 6: Save money on food.

One of my favorite ways of saving money is by creating a meal plan. A meal plan is a simple plan that outlines meals on a weekly basis. 

With the help of this plan, you will be able to resist the urge to order take-out or eat out unnecessarily.

You can also save money on food by buying non-perishable foods in bulk. Use coupons and offers where you can.

So there you have it- 6 simple steps to reducing your monthly expenses. Feel free to share with me the steps you use to reduce your monthly expenses, have I included any in the post above? You can also check out Financial Help for Families, if you feel you need professional help to nudge you in the right direction.

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