cutting expenses

When You Spend More Than You Make


By: K.H. Smith

One good thing about making a budget is that it shows you where your money is going.  (How to Make a Budget) However, if you  spend more than you make, then you know you have to cut somewhere.  Your budget can show you some places you can trim your spending.  Depending on how much spending needs to be cut, you may need to make small or large changes in your habits.

 

Chances are if you are reading this post, you are spending more money per month than you should.  So the question of what to cut or trim out of your budget comes down to what are my needs? Obviously, food, shelter, and bills are essential, but that doesn’t mean you shouldn’t take a closer look at those expenses.  Look at every part of your budget and consider what can be changed, reduced or dropped all together.

Do you go out to eat?  If so, how often?  Eating at home or packing your lunch are quick ways to save money.  If going out with friends is costing you too much, then maybe plan some activities at home, or when you do go out drink water, or alternate water with your alcoholic drinks and/or split a meal with someone.  Choose less expensive restaurants or bars.  Have a snack at home before you go, so you can order less food and not be starving.

 

Most people can cut their grocery bill significantly by meal planning and only buying what they need for the week.  Take inventory of what you have in the house and plan meals that don’t require many more items. You can save hundreds in a month if you plan ahead!  If you don’t like to cook, plan for simple meals, or prep meals ahead of time, so you just have to heat them up.  Make enough for leftovers so you get two meals for the work of one!  Some of my favorite simple meals are soups, frozen burger patties (just heat up and add cheese!), crockpot meals, and chicken/fish tenders (heat up and add veggies).

 

If you tend to shop frequently, or impulse buy, then cutting that out can lead to big savings.  I found that not going to the mall or to Target AT ALL was a huge help.  If I really needed something, just quickly get in and out.  No browsing.  I was a sucker for sales.  Just because it’s a good deal, doesn’t mean I need it.  That has been a hard lesson for me!

 

Some ways to cut bills would be to drop your cable bill and use streaming services such as Netfix, Hulu, or YouTube.  You don’t need a landline either, if you still have one. You may still need internet at home, or if you are really strapped, you could cut internet temporarily and use Starbucks or the library.

 

For your electric, gas, and water bills, look at ways to cut back on usage. (How to Cut Your Electric Bill) Sometimes you can call and negotiate rates with them as well.  It doesn’t hurt to ask!  If you kept your cable bill, this definitely works with them.

 

Don’t forget to look at any subscription services you use, including magazines, gym memberships, clothing services (like fabletics or stitch fix), etc. If you are not using them or you can live without them, it’s time to cut them.  Once you are making more money or have more room in your budget you can always add them back.

 

Now, if you are really behind on your bills, or you want to be more aggressive in getting out of debt, there are some bigger actions you can take to reduce your spending.  Take a look at your housing situation, can you move somewhere that costs less?  That may mean finding a smaller place, maybe take on a roommate or two, or even live with family. If you own your place, could you rent it for the cost of your mortgage and live somewhere else for a year or two?  None of those options probably sounds appealing at first, but they could save you hundreds, if not thousands per month.  That should sound good if you are serious about getting a handle on your finances.  This is a huge decision, so think about your options. Discuss them with your partner, a trusted friend, and/or family member.  These should hopefully be temporary changes until you get your debts paid off and/or your income increases.

 

Another aggressive option is to consider your car situation.  Do you have a car payment?  If so, could you sell the car and buy something for less?  Maybe a smaller payment, or better yet, buy a car outright?  Or do you live in an urban area and could manage with no car at all?

 

These are suggestions for how to make changes in your spending, especially if you are spending more than you make.  You have to decide how serious your situation is and how serious you are about getting a handle on your finances.  Think of these suggestions as short term sacrifices for the greater good!  It is worth it to be debt free and feel secure with your financial picture.

 

Leave me a comment on what you have cut to help with your monthly expenses!


 

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