Maintain Fabulous Financials: #2 Reduce Expenses
The second step to maintain Fabulous Financials is to reduce expenses.
If you focus on the heavy hitters, reducing expenses can provide the same results as increasing income. Think about it. With one less bill to pay, you will immediately increase your disposable income by the monthly payment of the eliminated bill. Doesn’t that make you want to focus on eliminating (and avoiding) consumer debt? Truth be told, aunt Visa and uncle Mastercard would prefer that you didn’t. They’d rather you carry the debt so they can earn money on interest and fees. But why go to work 40+ hours/week just to turn over half of your paycheck to them? That is…unless you don’t mind working twice as hard for half the pay. Otherwise, try these:
Get the Monkey Off Your Back
When you incur consumer debt to buy ’stuff’, think of it as putting a monkey on your back. When you first brought it home, it was probably a cute little thing. You showed it off to your friends and admired it everyday. But after a while, you realized that little mofo was getting heavy. Shortly thereafter, it aint as cute as it used to be, aint as shiny as it used to be, aint as new as it used to be, or even worse - someone else has one that’s even better than yours. Dang! The only way to get rid of this monkey is by paying it to go away. Now you’re stuck with something that’s weighing you down, taking your hard earned money, and stealing your joy. You must admit, the simple thought of going to work to pay for things you no longer value is depressing. Get the monkey off your back.
Get Rid of Non-Necessities
Another way to reduce expenses is to get rid of things you consider non-necessities or you can stand to live without - even if it’s only temporary. As for me? I don’t have cable or a landline. I don’t have text message and other data features on my cell phone. I don’t TiVo or own an iPhone. I don’t pay for magazine subscriptions or club memberships. Yet, I live a full life, stay connected with my friends, and remain up to date on current events and news. Go figure. If it isn’t a necessity to YOU, get rid of it.
Are debt and non-necessities preventing you from having fabulous financials?
Please share tips on how YOU reduce expenses?
~*~*~*~*~*~Work to achieve, not to acquire.
And always, BE FABULOUS!
This blog is the story of my financial life as a single mom. Subscribe via (feed reader) or (email) to follow the rest of my fabulous journey.
11 comments:
Write a comment:
Want an image next to your comment? Get your Gravatar here!
Have you read the Fabulous Financials comment policy lately?
I was inspired to my favorite new game by some of the independent style blogs that are out there. The game is, “shop in my closet,” where I challenge myself to use clothing, shoes & accessories I already own but in new and different combination to create new outfits. I still get the same fun as shopping and getting a new look but I’m not paying for the look. It’s even a little more fun than shopping because I have to meet the challenge of the constraints of my closet, so I feel more clever when I create a great outfit.
Good thing I’m playing this game ’cause I’ve given myself a clothes shopping moratorium through at least the end of January. Then I’ll challenge myself to go longer.
Last week I disconnected my cable and high speed internet access at home. This decreased my cable bill by about $80 per month.
I’ve increased my income in the past year, but that alone will not get me out of debt. Taking a knife and cutting away at non-essentials is a further step.
I’m a student trying to save, life life, and pay off health & credit debt. I’ve done the following to help cut my expenses: I’ve lived without cable for the past 3 years. I selectively choose to participate in events that cost $, If you would like to have a few luxuries,such as cable, internet, etc.. shop around or ask for a great deal. I recently added the interenet which will cost $9.99 for 6 mos. w/no contract! I’m single so for me eating out is waaay too easy. So, I’m currently working on curbing this expense as well. Hope these little tidbits help!
Yes, it does help. Thank you.
Do you mind sharing the name of your internet provider? Others might be interested in that deal. [-SM]
I think the thing that has helped me the most is to be vigilant and analytical about my spending. I regularly review my fixed expenses to see if there is a way to lower them. Sometimes there is and sometimes not, but the exercise keeps me sharp. I also try to think about my variable expenses in terms of what I am paying vs. the value that I am getting. If the value is at least equal to the price (if not more) than I will buy it. If not, no thank you.
How do you quantify the “value” of something to determine if it is equal to or less than the price? [-SM]
Hopefully the value examination gets you thinking about what you value, as opposed to your neighbor or your favorite blogger (love ya Ma, but cable ain’t goin’ off in my crib anytime soon.) LOL.
Thinking about what I value for my money is the surest way I know to reduce expenses.
I’m not sure if I understand your “value” term. I guess I prefer necessity vs. non-necessity because it is subjective and varies with the individual’s lifestyle. [-SM]
I keep a log of my expenses. Every cent I spent, I write it down in a little notebook. It helps me keep track of spending and shows me where I am going overboard. It seems that my husband and I spend a lot on food (eating out and ordering in)… so… the plan is to cut that expense by making delicious home-style meals and actually be excited about eating at home.
I have the same problem. I’ve tried your solution. Doesn’t work for me. I’ve decided to give in and just increase my “dining out” budget. It makes me happier. Good luck to you and hubby. [-SM]
No Tivo? What would I do? I did get rid of my high speed internet, no landline, downgraded the cable and told Nextel they could keep the simply everything plan; I’m fine with 300 minutes and fee incoming! Now totally getting rid of cable and my 7 year old would never talk to me again! lol I am still trying to come up with more ways to cut down on spending. I have no car note but have to pay rent and what I pay for my area is CHEAP! Come on single ma what else? lol
The things I listed were non-necessities to ME. You have to do what works for YOU. I’d rather watch paint dry than go without high speed internet. Dial up seems so archaic. And I’d die with no internet at all. As for cable and TiVo, my daughter and I lead very busy lives so we rarely watch TV. When we do, the shows we enjoy come on regular stations.
I can’t recommend other things you can cut unless I know what you pay. You’ve only mentioned internet, phone, cable, cell, car, and rent. If 300 cell min, basic cable, and rent is all you pay, then you’re doing great. Where’s your money going? The 1st half of this post is about getting rid of debt. Are you debt free? If not, there’s your answer. [-SM]
How do you quantify the “value” of something to determine if it is equal to or less than the price? [-SM]
Research and experience. A recent example: we recently bought a new couch for our living room. We ended up having the couch custom made because it was the virtually the same price as “off the shelf” but provided far more choice in terms of finishes, fabrics and construction of the item given out preferences. Deciding on that purchase took several weeks and visits to several stores. The value for the price (for us) was not there for the “off the shelf” furniture compared to the value for the price of the custom piece.
I’m not sure if I understand your “value” term. I guess I prefer necessity vs. non-necessity because it is subjective and varies with the individual’s lifestyle.
I think we are using the terms in the same way, just different words. The value of something to a particular person is subjective, at least to me. If someone values something enough, it becomes a necessity to them. If not, then it is a non-necessity. But value is relative and fluid, just like what is a necessity and a non-necessity. I value having cable, but not relative to other things I value, like having a funded emergency fund, for example. For now, having cable is a necessity, in the future, maybe not.
My internet provider is Cox Communications. Be sure to ask if the special is still going and if not haggle for a deal that’s better than the regular monthly rate. Times are hard for businesses right now and the pressure is on for sales reps to meet their daily, weekly, etc.. expectations so take advantage!!!!
1. Only pay for what I actually want. It’s sometimes hard to know which things you want and which things you SHOULD want. Turns out I don’t want a pretty car enough to pay as much extra as it costs to have one. I just want one that works and doesn’t pollute much. I don’t want a castle with pointy roofs and spiral staircases enough to pay as much extra compared to my little plain house. I don’t want to wear make-up. I don’t want a big screen TV in my little tiny living room, or any TV at all for that matter (though I do rent DVDs of TV shows sometimes).
2. For the stuff I want, figure out cheap ways I like to get it. Be on the lookout for out-of-the-box ideas. An obvious example is staying warm in winter. You can turn up the central heat, get room heaters, wear a hat and scarf and sweater and socks around the house, get an electric blanket, put throw rugs down, build a fire, build up your house’s insulation, feel for airflow through the windows and block that, drink hot tea, open the curtains during the day and shut them at night, choose decidious trees to plant near the house (the leaves fall off and let the sun in during winter), and/or who knows how many other things.
3. If I want two things equally, pick the one that costs less overall. Sometimes one is cheaper to buy; sometimes one has much lower maintenance costs. Spaghetti is cheaper to make than lasagna. A water-resistant watch lasts me longer than a regular watch and doesn’t have to cost much more.
4. Remember that my house is not a museum; I do not need to own everything cool I see. (Sometimes I can make do with showing it to someone, describing it to someone, taking a picture, or knowing that I can get access to it without owning it such as a book at the library. Sometimes sharing, trading, borrowing, or renting can work.)
5. Try things that I think I might not like, just in case I’m wrong. Like generic groceries. Like cutting my own hair. Like not eating sugar for a week. Like taking the bus or riding my bike to work. Pay attention to when other people are trying things that sound icky to you and see if you can figure out more the easy way! (Yes, other people’s blogs are my friends.)
6. Try to look past the wow factor when making a purchase. I’m pretty good at realizing that there are certain things I don’t want to have to clean or dust all the time before it’s too late. But I did accidentally buy a table recently that was too small to be able to push all four chairs in at the same time (only two across from each other). Doh!
7. Don’t forget how to have fun. I think a lot of grown-ups do forget how to have fun, or the only thing they think of is drinking or shopping or their one expensive hobby. Hanging around being silly with friends is my favorite and doesn’t have to be expensive. Carve pumpkins. Have a recital or “art” show (I like to define art as anything someone makes). Read aloud parts in a play. Make a movie with really cheap special effects (like all the “actors” are made of Barbie dolls or paper dolls).
@ dialup internet provides great dialup service for $9.95 per month if paid monthly, and $7.95 if you pay for a year all in one go. I have used them with no problems for 2 years now.
@SM: ” I’ve tried your solution [eating in instead of out]. Doesn’t work for me. I’ve decided to give in and just increase my “dining out” budget. It makes me happier. Good luck to you and hubby. [-SM]”
It sounds like you have the discretionary income to devote to eating out. If you had a financial need pressing enough, you *would* stop eating out, drop the high speed internet (unless it is a business need) etc. In other words, the solution would work for you except that you have determined that you don’t have a problem in the first place and can afford to eat out–therefore there’s no incentive for you to make eating in work. That’s what the upshot of what you’re saying seems to be.
@ “Now totally getting rid of cable and my 7 year old would never talk to me again! lol ”
She/He will forget you ever had it after about 8 days.