No matter how much money we earn, the general impression is that: we are never satisfied with our finances. I am not saying that this is wrong, nor saying it is the right concept to live by. According to consumer psychology, needs are always unsatisfied. That happens when we exhaust our utilities while we quench our daily desires.
However, if you fall in the category of ordinary, middle class or lower level income earners, there are so many precautionary measures that we need to be aware of. We should never put ourselves in deficit as a result of unnecessary expenses. Here are some quick views on some expenses that we could do without. Let's first start by 'ringing up' the most widely talk about expense, the cell phone.
HIGH CELL PHONE BILLS
Communication is vital but there are ready inexpensive options to significantly lower your phone bill.The lowest package that I have researched, averages about $105 per month on a basic voice, internet and data plan and others cost as much as $400 per month!
If there is a code red on your month budget, don't be too ashamed to consider a prepaid package instead.
EXTRA RENT
If you have a family, stop right now and count the number of persons living in your household. This might be a silly advise but some householders are paying an arm and leg for an additional storeroom just to keep junk. Why would you pay rent for 3 bedrooms when there are 3 person in the house: you, your spouse and a child. Even if there are 2 children, depending on their ages, you could let them sleep in the same room and save yourself an additional $100 to $300 dollars.
Depending on where you live, rent could range between $400-$4000 per month. if you qualify for a mortgage, my advice would be to speak with an adviser to weigh your options of paying mortgage instead of rent. It is better to pay for your house than to be paying someone else. If you are in a temporary situation, it is OK to rent as that might be a start but try to live within your means while you save towards your down payment for your future mortgage.
EATING OUT
Do you know why fast-food is the number one business Worldwide? That happens because 90% of our householders seldom prepare meals at home. If you stop outside to have:
Breakfast in the mornings
Lunch by mid-day
Dinner in the afternoon
You could be spending as much as $50 per day on food!
GROOMING
When grooming is not monitored carefully, it takes up as much or over 20% of our earnings on a weekly basis. If we should reduce this figure, you would be surprised to see the savings in our pockets at the end of the month. We all know that it is very important to maintain a good appearance but others tend to master this skill without burdening their pockets.
Let's first start with the male as an example: Most men visit the barber twice per week and spend as much as $20-$25 on shave and cut. Now, there are two options to consider:
Cut your hair monthly rather than bi-weekly
Purchase a grooming kit and let your spouse be your personal groomer
For females: manicure, pedicure and hairstyle expense, could run in excess of $300- $500 per month. Again, I reiterate, spend some time and invest in home grooming. Where it becomes necessary to seek outside assistance, I would support that option. In addition, you may want to support your friend who has a small business. Here is why:
They don't pay high overhead expenses as the regular boutique
Most times your 'personal stylist' is cheaper and more flexible than the regular boutique
EXCESSIVE ENTERTAINMENT
All work and no play make Jack a dull boy. However, Jack will be bright but BROKE at the end of the month if he doesn't curtail his partying and drinking habits. Try to reduce your frequent drinking and partying as it would show significant reduction in your expenses and a huge increase in your savings which we will look at now.
BRINGING IN THE SHEAVES
Let's bring out the calculators now, as we attempt to 'bring in the sheaves' and celebrate our saving at the end of the month. We could now pay more than the minimum on our financial obligations.
Let's start with our rankings:
High Cell Phone: $200
Extra Rent: $200
Eating Out: $500
Grooming: $100
Weekly Entertainment: $100
The above total shows savings of $1100 but we could give or take $100 from that figure. One wise accounting principle states that it is better to overstate expenses and understate revenues, just to be on the safe side. Once you apply the above practice, you could see a huge significance in your savings at the end of the year.
We can now pay more than the minimum on our credit card and possibly pay off the outstanding balances by the end of the year. That would be good news to hear after we look at the Top 5 Expenses That We Could Do Without.
The above examples are hypothetical scenarios that could be applied to average income earners who have average families with average or basic monthly expenses. All currencies are quoted in USD
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