Reducing Expenses

Spring clean your finances

Now that Spring has arrived, most of us think spring cleaning. I am going to put a twist on that for this year that will save you money, too. I want you to spring clean your finances. This is not an all day project.

Take this month’s bills and go to your computer. You can do this in as little as an hour depending on how many bills you pay each month.

You are going to do some comparison research and try to lower your rates.

1. Start with your current company. Look to see if you can reduce your bill by changing the services you pay for – do you really use all of them?

2. Then, check out the competition and see what they are offering. Does it make sense to switch?

3. See if your current company will match the great deal you found at the other company. You have nothing to lose by asking. The worst they can say is “no”. Then you can make the choice.

Do this for each bill and see how much you can save. I’ve done it myself and it works.

I switched my power company and saved about 20% each month.
I switched to a cell phone plan with less minutes and saved $20 per month.
Several years ago we switched our insurance and were able to save several hundred dollars.

Trust me, when you see all the money that you can save, you will find that this is the best hour you’ve ever spent spring cleaning, and you didn’t have to break a sweat.

Budgeting for 2011

Have you made a resolution to stick to your budget in 2011? So far this year, I have overspent in my budget category of snow removal I am sure I am not alone What do you do when it’s only January 20 and you have overspent? You have some tough decisions to make.

You have several options If you decide that you want to continue having your snow removal done by someone else, you could find another way to pay for this expense You would have to give up something else that would free up the money for more snow removal You could do it yourself, if you are physically able You can access your emergency savings account Remember that savings account that I have been asking you to build up so you have one year’s worth of expenses to spend on life’s “what if’s” now could be one of those times.

Budgeting is only as good as your projections and sometimes we project too little That is why you need to be flexible with your budget, so that when you have unexpected expenses or more costs than you have planned, you can deal with it Overages in one category mean shortages in another Determine what you can lessen to have the extra money for the overages Build that emergency savings for those overages so you have a cushion to fall back on Because you never know how much snow we are going to get in a season.

Increase Savings and Reduce Expenses in 2011

What are your New Year’s financial resolutions? Is it to save more? Reduce your expenses? We all have good intentions in January, but what happens to them in the coming months?

If your resolution is to save more, start by saving a small amount each week The amount should be something you think you can easily do without a problem If you are thinking that there is no money left over after you pay your bills to do this, you are thinking about this backwards Savings needs to be your first priority and not your last Take the amount you can afford to save weekly and take it off the top, before you pay your bills This way, you will ensure that this will happen Lots of people don’t keep their resolutions because they goals are too much for them.

If you have never succeeded in making this resolution in the past, start small By small I mean start with $5 per week If you can do this easily, then increase the amount for next month Then increase again and again until you get to an amount that you were originally thinking you wanted to save in the past This is much easier for you to accomplish with baby steps than if you said I want to save $100 a week and then fail to do so You are building your success with small steps and sticking with your resolution.

To reduce your expenses, think baby steps again Look at one category of spending and figure out a way to reduce that category by 10% Once that is done, go on to the next.

Resolutions / goals are something that you can do any day of the year There is no need to only do them in January of each year Remember, anything that you want to accomplish will take effort on your part.

Is convenience hurting your wallet?

Yes, we all want convenience We all work, have families, a household , and we all want to do it all, but there is never enough time Convenience saves time and that’s of huge importance to us all But look at it from the wallet side convenience can cost more money.

Can you have convenience cheaply? If you’re willing to plan, yes! Here are a few examples:

Pizza night: Who doesn’t like to have pizza delivered to the house But, how about a store-bought cheese pizza at $5.00 that you bake at home versus a delivery pizza at $10 (plus the cost of delivery and a tip).

Fruit and Vegetables: Pre cut fruits and vegetables are more costly than the actual item If you don’t like to cut them up yourself, choose fruits and vegetables that are easy to eat without cutting.

ATM machines: I know many people who take out $20 today to buy lunch and then another $20 tomorrow when they are at the store again If you are using an ATM that isn’t free this all adds up How about planning for the week and making one withdrawal at your bank’s machine That way there are no ATM charges.

Books, music and DVD’s: Convenient to buy, rent and/or download for a small fee But, did you know that you can borrow these from your local library at no cost?

All these little amounts add up This could be the difference between having a savings account versus living paycheck to paycheck.

Trust me – you need to see where all the little money is going and start to make conscious choices about whether to spend your money or not Convenience saves you time but it might be costing you more in the long run.

You CAN Lower Your Out-of-Control Expenses: Part 2

Using instructions from last week’s column, you figured out your average monthly expenses. Now, you need to ask yourself two questions:

1.) Are you spending too much on some items?

2.) Can you lower the amount you spend on some items?

Some fixed expenses can’t be lowered. Your loans and mortgage/rent are legal agreements, and full coverage insurance is mandatory with some loans. But, you do have some control over your utilities. You can choose a different phone company. You can also control how much water, gas, and electricity you use by making small changes. Try line-drying your clothes, using a fan instead of air conditioning, or running the dishwasher only when it’s completely full.

Look to your variable expenses to save money.

Do keep up your auto and home maintenance, but try to cut back on groceries, entertainment, gifts and clothing.
Try using the library, buying cheaper food brands, and buying seasonal clothes at the end of the season.
Instead of buying expensive gifts, give “service coupons.”
If you’re spending more than you earn, some of these changes will be mandatory.

With some creativity, it’s possible to reduce expenses without feeling deprived.

You CAN Lower Your Out-of-Control Expenses: Part 1

Not sure where your money is going? Let’s find out.

First, make a list of your fixed monthly expenses. (“Fixed” means the dollar amount is the same every month.) These include items like:

mortgage/rent
loans
and insurance.

Utilities go under fixed expenses because they only vary by season. If you’re on a utility budget plan then you already know the amount. If your utility bills vary month to month, then add up the last 12 months and divide by 12 to get your average for each utility company.

Now, make a list of your variable expenses. (“Variable” means the dollar amount changes every month.) These include items like:

your groceries
entertainment
auto/home maintenance
gifts
clothing
and more.

The amount will vary each month, so get the average monthly expense for each item by adding up the last 12 months and dividing by 12.

Were you shocked by how much you spend and how you spend it? Most people are. We’re busy people and we like convenience, which means we tend to spend more than we should. Check back next week for Part 2 to find out what to do with this information.