Living More Frugally By Cutting Out Non-Essential Expenses
You may be familiar with the old phrase that states, “It isn’t what you make, it’s what you keep.” This can ring true no matter how much money you earn. For example, an individual who earns low wages and also keeps expenses in check will typically be in much better financial shape overall than someone who may earn millions, but is also millions more in debt.
Cutting Costs without Drastically Changing Your Lifestyle
While many may feel that cutting costs equals “pinching pennies,” the truth is that expenses can be reduced – or even eliminated altogether – without the need to dramatically change your lifestyle. In fact, in many instances, the changes will hardly be noticeable. In addition, many of these items may only need to be reduced temporarily and can be added back into your budget at a later time.
Some easy ways to keep your funds from flowing out needlessly could include:
- Cutting the premium cable television channels from your subscription
- Using a list – and sticking to it – when shopping for groceries and other household items
- Seeking out sales and other price reductions on items that you regularly use
- Cancelling your newspaper subscription and instead obtaining this information online
- Turning off lights, television sets, and/or other items that run on electricity when leaving a room
- Renting movies rather than going to the theatre (this will not only save on the cost of entertainment, but will also likely save a great deal on snack food items that may be purchased at the theatre)
- Not buying items using high interest credit cards or other forms of debt
- Eating at home more versus having meals out (this can also include taking lunch to work rather than eating in the company cafeteria or at nearby dining establishments)
While all of these suggestions individually may not save substantial sums in and of themselves, over time – and when used in conjunction with other strategies – the savings can really begin to add up. For example, take a look at how taking lunch to work versus going out every day can build up over time.
Going Out to Eat versus Taking Your Lunch to Work
Going Out = $10 / day (approx.) x 20 days per month = $200
Taking Your Lunch = $5 / day (approx.) x 20 days per month = $100
Savings = $100 / month (or $1,200 per year)
Other Hidden Money Grabbers
When trying to live more frugally, there are aspects to be aware of in addition to just cutting out non-essential costs. Two of these criteria include inflation and debt. Inflation can literally “rob” you of funds – especially if the cost of goods and services are rising, while your income amount stays the same. Therefore, it is important to factor in inflation when considering your long-term budget.
Likewise, debt can also be a thief of your income. Over the years, many have become mindful of the “buy now, pay later” strategy that is used by numerous retailers. Yet, what most people may not realize is that the borrowing of funds in this manner could potentially cost a great deal down the road.
Even though using credit to purchase goods and services may at first seem convenient, it is imperative to be mindful of the pitfalls of this buying strategy. And, if items are purchased on credit, it is essential to pay them off immediately. Otherwise, the interest charges of 18 to 20 percent – or more- could be devastating.
What about Paying Uncle Sam?
Another area where people may not be aware of living more frugally is when it comes to taxes. Here, many individuals could be losing money needlessly, when they are in fact eligible for tax deductions, reductions, and / or credits.
Working with a professional tax advisor can help you to determine the areas – and the amount of tax relief – that you may be able to claim. Taking advantage of various tax strategies can actually play a large part in money that you save overall.
Taking the Next Step Towards a More Frugal Lifestyle
By taking the steps that are necessary for tracking expenses, it will be easy to soon see the positive changes in both spending habits, as well as with your financial situation as a whole. And, by taking the money that you save and putting it into a savings or investment account, you will also be moving forward with setting up a bright picture for your financial future.