It’s the biggest challenge for our personal finances to figure out how to reduce our regular expenses that gallops up our monthly budget. The continuous expenses left us penniless. If you don’t do few sacrifices, you’ll always be left penniless. So, we gathered for you the following approaches for cost-cutting that you may use for your decisions in personal finances.
- Debt reduction
While many of us do not have cash available to completely eliminate debt, the method of debt reduction will help you decrease your monthly expenses. For students, instead of hoping for better rates of consolidating student loans, spend time to find a better option for consolidating student loans which can be paid off every month. You may contact your local credit union or some lending institutions. Less interest rate reduces monthly payments without drastically increasing the overall cost. An example for a local credit union in the Philippines is Co-op (cooperative). A cooperative has less interest rate compared to banks and other financial institution because it has been always a tax-free. Normally cooperative has a maximum of 3% interest rate. All you have to do is to become a member and you can enjoy the benefits of being a member, where you can apply for different loans (salary loan, pension loan, student loan, home loan, car loan, etc.).
If you’ve got an increasing amount on your credit card, you can request for a rate reduction. You may request a zero percent balance transfer to other cards until you get a healthy situation on your personal finances. The purpose is to “stop buying on credit” until you completely paid your total credit.
If you have a lot of valuable things on your closets where you can simply live without them, you may sell your unused items and pay off your debts especially if your debt load becomes unmanageable.
- Energy bills
The onslaught energy costs make us crazy when thinking where to get money to pay the entire bill. When you realize that your bill is 30% higher than your salary, of course you will not be free from debts. And it will always be your fault because there are many ways to decrease energy bills yet you do nothing.
There are few things you can do at home. Installing CFL or compact fluorescent light bulb is more economical than the regular fluorescent lights. CFL has a longer lifespan for up to 3 years (if you choose the best brand) with less electric usage. A regular 75 watts fluorescent has a 4-times rate compared to a CFL 20 watt where you’ll save up to $1 each CFL bulb. Count how many regular lights you have at home then switch them to CFL bulbs. Imagine how much you can save if you have switched 5 regular fluorescent lights to 5 CFL bulbs. You’ll save more or less $10 a month. It will make it lesser if you change your habits at home like turning the lights when not in use.
Your habits at home can make a difference to your energy bills. When you get home from work, instead of turning on your TV and watching TV shows, you can just simply go to bed, relax yourself, and have an early sleep so you’ll get a wonderful morning when you wake up. Or have a little chitchat with your family while eating dinner and watching TV news then go to bed after.
Unplugging unused electrical devices can help you lesser your energy bills. Most of the electrical devices when plugged and unused for a long time (especially night time when everyone is sleeping) have a ghost charge. And through unplugging them can eliminate the usage.
Installing a programmable home and kitchen ware can help a lot too. When you’re asleep or perhaps not at home, a programmable thermostat automatically alters the heat and cool temperature of your home. Make use of timers when to turn off your electrical devices and use power strip when to turn on so it will automatically turn off the ghost charge especially at night.
Make your home air sealed so it prevents loss of cool air and warm air when using a cooling machine and heating machine.
- Automobile expenses
Automobile is a headache when it decreases the value then consumes more fuel and often requires monthly repairs and maintenance. How can you save from your automobile?
Keeping tires inflated improves gas mileage in every 2-PSI of air you added to your tires. Just have your car tires check its air pressure in a local gas station at least once a month. If you’re automobile is sitting in your garage all day, better sell it so it could remove your insurance expense and you can use the money from selling off.
You may hitch a ride from someone else sometimes so it can reduce the wear and tear of your car and its gas expenses. But the best way you can save money from your automobile is to use public transportation. From going to work to stopping by at a store or shopping center after work, you can save money on gas and car maintenance. You can sometimes leave your car at home or park on a station, this definitely can save you from automobile expenses monthly.
- Bills on meals
Many of us are convenient to eat outside because we thought that it’s a time saver when there’s no need to shop, cook, prepare food and wash the dishes after. We do not consider how much we can save from cooking our own meals seeing that we have a bigger family. If you’re solely living at home and when there’s no need to budget, yes, you can eat out everyday. But for those who seek for ways to lower monthly bills on food, the best way you can save is to cook your own meal. This way you can control what to buy and what to eat. You can shop raw food for a week and have it budgeted. When you cook and make plenty of them, you can simply put the leftover in the fridge for future meals or better take some at work. If you are a type that you don’t want to take too much time to cook, you can just simply prepare easy recipes and choose the one that is freshly utilized in your area.
If you are fond of vegetables and when you can see that your lawn or backyard is too spacious, you can start gardening with your favorite vegetables. Furthermore, you can make it a daily habit to visit your garden, take time to feel the fresh air while looking forward for its fruit; as the saying goes “its two birds on one stone” - when you eat less in a healthy way making you fit effortlessly.
- Entertainment expenses
Too much entertainment expenses might end you up penniless. The same way when you’re too much happy, you will never realize what you lost. If you think that your club memberships eat too much money monthly then, you can cancel the membership. Let’s say you are a member of a gym club and that throws too much money, you still have other ways of doing similar things in a gym without paying. By taking some time to do some general cleaning at your house, lifting and rearranging things, not just you’re doing natural to sweat yourself but as well as pays you off from making your home tidy. The same way as getting subscribed on newspaper and magazine when you’re always updated yourself on the internet, that’s useless.
You can entertain yourself without paying more by reducing your entertainment options. Instead of going to night clubs every night just to socialize people, there are many out there who need our help and attention that we may be happier inside after we reach our hand to them. Visit the nursing homes, orphanage and other foundation homes. Instead of seeking entertainment outside, by giving your time to others, that will definitely give you entertainment that nothing can pay off.
- Cellphone bills
Take time to assess yourself in using your cellphone: how much do you use it? How often are you on your cellphone? Are you the same as others who always glued oneself at cellphones? If your answer is yes, then better start thinking of ways on reducing cellphone bills. Getting a regular prepaid airtime is costly. You can save more on monthly promo at unlimited call and text with a limit of browsing rather than using a regular airtime. If you think you need more for business use, you can always save from getting monthly plans or subscription.
On the other hand, if you are using your cellphone for emergency use and without taking much time at it, you can always have a regular prepaid airtime to budget only for necessary things.
- Eliminate redundant services
Household services? Why hire where you can do it on your own? Learn to be meticulous at your own things. If only you could give yourself a chance to do those things, you would definitely learn that the right thing on doing it right is not by getting others do it for you. Not only you can save money but you give time your entire family to be part in your household activities.
- Reduce clothes shopping, expensive appearances
For some who wants to always look good with new accessories, there are actually many ways to make your own fashion that is only fathomable by you, instead of buying clothes and accessories every month. You just only need to be creative. If you have immeasurable number of garments, better stop buying for new. Dig up your hidden treasures at your closets and start matching your old clothes to make them new. If there are more which you could no longer wear then, better sell them at an auction. If you can’t help not to buy one, a bargain or on sale clothes can save you a lot. The same thing in grooming, it doesn’t have to be expensive to keep up appearances. By having your hair styled or cut daily or weekly, you can have it monthly. Getting your nails done by a manicurist everyday is too costly. You can simply have a manicure party and invite some friends to do it at home instead. It doesn’t need to be an expensive shampoo to look your hair great. Even doing facial at a beauty center can be done at home by picking the best product for you and do it at home after working hours.
- Get an inexpensive location
If you are renting a home, you can take time to choose a good environment at a less costly area. It doesn’t have to be complete in things nor be a luxurious. As long as you get enough sleep, you can take time to hang out inside, then it’s a better option than always chasing your dreams. The tendency of getting an expensive area is that, your most need maybe sacrificed. You can’t have all expensive things at a time for you will lose everything: time, money, dreams and ambitions. Above all, you’ll lose yourself if you can’t manage your responsibility.
- Eliminating habits
Many are getting more debts because of keeping the habits. May it be smoking, drinking, excessive travelling, a drug addict, a philanderer and others- all of those can drain the budget. If we are going to calculate, keeping things without any real benefit makes one person a loser. Aside from being broke and irresponsible, it’s the selfishness that dominates for making others worry. Imagine if your habits cost over hundred bucks a month, how much you could gain should you save your money from the useless habits.