It is an undeniable fact that saving money is a very tough task. All the exciting events, continuous sales, and outings can burn a hole in your pocket. So, how to drastically cut expenses?
Between all the fun but expensive elements of life, you can still use some easy tactics to save up some money for future use as well as have enough money to experience and try out new things. That sounds like a good deal, doesn’t it?
Read on to know more about how to drastically cut expenses and eventually save up a lot of money!
This post is all about how to drastically cut expenses.
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How to Drastically Cut Expenses
What Does It Mean To Cut Expenses?
I am sure you have heard the proverb, “A penny saved, is a penny earned” and that is exactly what we are trying to do.
Cutting down on expenses means cutting down a small amount of expense in each area rather than completely avoiding one big expense.
Sounds quite easy, right?
All you have to do is change your spending habits, little by little each day. Once you do this, you will be surprised to see how those small efforts can actually lessen your financial issues!
Reasons You Should Start Reducing Bills and Living Expenses
It is always a good thing to reduce your daily expenses as it ultimately leads to a good amount of savings generally.
However, if you are still unaware of the reasons why you need to save up, here’s a list of all the benefits that you will be getting if you start saving up immediately!
Saving For Education
I am sure that each one of you wants to go into a good college for further studies. However, the debts that we have to incur to get into these prestigious universities are enormous.
So, instead of taking up the entire financial burden altogether, why don’t you try to save up early? By doing so, you already have a good amount of savings before you start going to your college.
Vacation
Instead of wasting money on not-so-important things, you can try saving up a good amount of money so that you can go on a vacation!
Going to a new country, traveling with your friends, or even solo traveling and making new memories definitely sounds so much fun.
After all, traveling is a whole different kind of experience which I am sure you wouldn’t want to miss!
Paying off debts
As much as you try to avoid it, you cannot avoid taking a loan. Most of the time you will have a loan on your head and there is nothing that you can do about it. But what you can do is, you can pay off your debts early from your savings and reduce your load for some time.
After all, you deserve a break from all the payments at least for a while.
Develop The Habit To Save At An Early Age
We often tend to believe that we don’t have to save up in our teens or early twenties.
Saving is something that we associate with older age. However, developing a habit of saving up isn’t as easy as it sounds. You need to inculcate this habit at an early age, to prepare yourself for the future.
Sounds a little scary, but I guess we have no other choice!
Acts As A Safety Net
There are always going to be some other problems that will require immediate cash. It can be anything, for instance, an accident, health insurance, or even a sudden layoff.
If you have some savings, you can go through it.
Makes You Independent
If you have a certain sum for yourself, you don’t have to depend on anyone for your needs. Being independent makes you more confident, plus you are no longer accountable to anybody for your finances.
When you save money, you get to live a life on your terms. It sure is liberating!
Keeping Options Open
If you have some extra cash, you can always go for a better or a luxurious product or even have some money to pay for your installments. Maybe, right now you don’t know what options you might have in the future.
But it is always a better thing to keep your options open, even if you are unaware of them right now!
I am sure by now, you must be convinced of how important it is for you to save money. So now, let’s move on to the next part where I can share with you some tips for the same. I bet you will be able to do it easily!
How To Create a Household Budget
To get a hold of your finances, you need to make a budget to streamline everything. By making a budget, you will know how much money you have, how much you need to save, and how much you can spend. This will help you in staying out from creating any debts or credit card dues.
Let’s see how you can make a budget that is simple yet very effective, provided you follow it religiously. For your ease, I have broken the budgeting process into three simple parts.
Step 1: Identify Your Total Monthly Income
Start by figuring out how much you are going to get each month. Try to keep this figure as realistic as possible. You can depend on the monthly wages that you get or the monthly allowance that your parents provide you with.
Step 2: Figure Out Your Expenses
This might be a little time-consuming but trace down all the amount that you tend to spend in a month. Some of your monthly expenses are fixed. For instance, the rent that you have to pay, your transport expense, and groceries.
There might be some other expenses that you cannot figure out exactly. Try to make a rough estimate for those expenses.
Step 3: Trace Your Expenses
After you have made your budget, see whether your actual expenses are in line with your expected expenses.
If they differ drastically, you need to cut down your expenses a little, so that by the end of the month, you still have a certain sum saved.
What Is a Bare Bone or Bare Necessities Budget?
A barebone budget is a budget that covers only your basic necessities. You might want to stick to this budget if you have a big expense to be covered in the future or a debt to pay off.
You can follow it for a short span but it might not be viable in the long run. Now, if you want to make a barebone budget, all you have to do is list out all the necessary expenses.
From them, try to figure out which expenses are avoidable and try to cut them down as much as possible.
Still, there are certain expenses that are completely unavoidable. So, you should make sure that you don’t put pressure on yourself to cut them out as it might affect your daily lifestyle!
Tips For Cutting Your Budget & Reducing Bills Fast
I am sure by now, you must have got an idea about how you can make a budget for yourself. So let me share with you some ways by which you can cut down on your expenses and even reduce your bills.
Tip #1: Review your Monthly Bills
Before you even start planning, always check out the amount that you tend to spend every month. For instance your monthly Netflix subscriptions, your spontaneous outings, cafeteria expenses, and so on.
There must be some amount that you won’t be able to recollect but try making a rough estimate for those expenses. Another easy way to keep track of your bills is to use a diary to write them out or there are hundreds of apps available online that can help you in keeping a track of your expenses.
These apps are really fast, easy-to-use as well as economical.
Tip #2: Do You Really Need Cable or Netflix?
Many times you tend to do such expenses, which are of no use to you, or rarely do you use them, I am sure each one of you is guilty of this crime.
If you aren’t using Netflix, then it is better to discontinue its membership rather than paying for it. Or, if you want it, you can ask any of your friends to share an account with you as it can cut the costs.
Tip #3: Avoid Going On Window Shopping
If you are getting bored at home, go for a walk or to a friend’s place rather than going to a mall. Even if you are going window shopping, you might end up buying something you aren’t really in need of.
Tip #4: Try To Sell Before You Buy
If you want to buy a new couch or a new phone, try selling the old one first. By doing this you will get extra cash and this won’t disrupt your budget a lot.
Tip #4: Take Up A Hobby
This might sound like an abrupt thing to do, but if you get involved in something you might have less amount of time in your hand and this might eventually help in avoiding unnecessary expenses.
Ways To Drastically Cut Unnecessary Expenses To The Bone
I am sure that some of the expenses might seem completely unavoidable to you, but still, you can find alternatives, that may help you in getting the same thing at a cheaper price. Here are a few tips that I follow which even you might find useful.
Use Cash Instead of a Credit Card
Say goodbye to your credit card and take some cash with you whenever you are going out.
Even if you are tempted to buy something, you will have no extra cash in hand. Ultimately you just have to walk away from the store. This is literally a game-changer move!
Shop at Thrift Stores
There are so many reasons to shop at a thrift store. You don’t have to waste a lot of money to wear stylish clothes. All you have to do is look around and get yourself a good deal!
Try Online Grocery Shopping
If you have a list with you, you might want to consider buying groceries online as you can keep a check on your expense plus you won’t get tempted by things that come into your way.
So, these are some of the ways that can help you out. If you want some motivation, you can also try listening or reading some of the budget-related books and podcasts out there!
How To Cut Expenses On Food?
Food expenses are something that even if we try our hardest we cannot stop ourselves from doing it. For a foodie, it might be the toughest thing to do! Don’t worry, I have few tips which might be really useful for you.
Stop Eating Out
Pack your meal whenever you are going out. Not only will be a healthier option but it always saves you some bucks, which to tend to spend on those frequent outings to restaurants.
Coupons
Most of the restaurants have coupons available on their sites. You can save a good sum if you use them. Therefore always follow the mantra, “Never Leave without coupons!”.
Birthday Discounts
A lot of restaurants provide you with discount coupons on your birthday. Always sign up with them for that extra discount. After all, it’s your birthday, you deserve a treat!
Happy Hours
A lot of restaurants have a specific hour of the day as a happy hour, where you get a certain amount of discount on your food.
Keep a track of restaurants that provide you with happy hours and make your taste buds happy at a low cost
Skip on Desserts and Drinks
Desserts and drinks actually contribute a lot to your bill. It is better than you skipping on them or even if you want to have it, have it once in a while.
Also, you don’t have to intake so many calories every time you eat outside. In the end, you still want to eat and remain healthy!
Final Thoughts
As you can see there are many easy ways to drastically cut expenses and save yourself some money. I hope the given tips and tricks work for you because they definitely did work for me.
All you gotta do is become a little thoughtful while spending your money and budget out your expenses and in no time you will start seeing those saved bucks in your wallet!
So, this is how to drastically cut expenses and live a stress-free life!
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