How to Reduce Expenses

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Here are 5 advices to help you to reduce your expenses:

1.- Know where you are

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Some people suggest to keep a detailed daily list of all your incomes and expenses in order for you to know exactly how much money you have in your bank account and your wallet at every single moment in your life, the objective here is for you to become more conscious when is shopping time. Although, theoretically this makes some sense, if you try it, there’s a big chance of ending up feeling like a miserable and cheap bastard in less than two weeks and go back to your normal habits.

No extreme is usually healthy, but, you do have to get a general idea of your incomes and expenses, for most people is something like this:

Income: salary

Expenses: credit card balance + cash I retired from the bank account.

2.- Set a goal

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Why do you want to spend less? If you don’t have a clear answer to this question, eventually you won’t see the point in making an effort. Take your time before answering it, think about it for a while, a clear reason will be your goal to remember when the time to control yourself comes, once you have it, write it down and look for a way to be reminded about it constantly, maybe set an alarm in your phone, or perhaps a post-it next to your bed for you to read it every morning, the thing is that if you know your goal by heart, it will help you to get your mind in the right track.

Every situation is different and it can change, when I started a relatively well paid job some years ago, my goal was to reduce my expenses in order to save money for buying everything I wanted; I don’t like luxury so it wasn’t that hard, I bought some nice clothes, the latest smartphone, two smart TVs, traveled to another country, etc. Problem is, I hated my job, so about a year ago, I started to save money in order to hold on a year with no job until I figure out what will I do with my life, I did it and quit, however, I wasn’t expecting that the company I worked for, would retain what they owe me since last year (third world problems), therefore, right now, I’m in survival mode and my goal is to reduce my expenses just so I can eat and have the basic services (the good thing is that I’m highly motivated).

3.- Figure out what really matters and what doesn’t

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We all have our priorities, to be clear about them will help us to make the right choices. There are some things that we just can’t cut out, at the very basic we all need a place to live and food, and if you want to have a happy life, you probably want to pay for a place (rented or not) where you can feel save and for food that won’t make you sick, after that, priorities may vary from person to person,  make a deep search within yourself and see what really matters and those thing that doesn’t, maybe cut them out completely or look for a cheaper option to replace them.

Some people think I’m crazy for leaving a well-paid job without securing a better income before, but for me, stuff and money aren’t as important as I thought, I found out that my top priority is to be happy, and in my life that means having time for my family, working out and making posts like this, and if that means I’ll have to eat canned tuna for the rest of the month, I’m ready for it.

4.- Connect with other goals

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Is hard to change our bad habits, we’ve all been there, but have you ever stopped a moment to think how much money you spend in those habits that really aren’t any good? There are probably some things in your life that are consuming your hard-earned cash and you know they are affecting your life in a negative way.

In my case, I liked to smoke daily three or four cigarettes, junk food was a necessity every three or four days and having a glass of some good old whiskey was part of my end of the work week routine. I still enjoy all of those things (yes, I know smoking is bad, let’s move on) but now I consider them a luxury, as a result I have just a cigarette a day, junk food isn’t on the menu unless somebody invites me, and the good old whiskey is now a small beer.

5.- Look for a cheaper alternative not a bad one

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Unless you’re some kind of monk living in some sort of spiritual retreat for the last few years, chances are, you’ve been brainwashed by advertising to some degree, perhaps when you’re hungry some fast-food brand immediately comes to your brain, when you’re shopping at the supermarket you are probably looking for a name and not a product, the price didn’t even occur to you, and deep down inside you too want the latest iPhone (even if you’re an Android kind of person like me). The thing is, if you want to decrease your expenses, you’ll have to be smarter than that and allow yourself to explore other options, cheaper options. However, don’t put yourself through misery with bad quality, in the end that will certainly be frustrating.

Some other adjustments I made in my life include: buying cheaper brands and cooking healthy food, fruits and vegetables aren’t that expensive around here; I cancelled my gym subscription, now I run and exercise at home; and, I spend less money on gasoline, now I usually bike, walk or use public transportation (when desperate, public transportation in a third world country isn’t that nice).

 

Bonus.- Just a thought:

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The less you need to be happy the easier it will be for you to feel free.

 

 

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