Do you always feel like you are tight on cash? Do you breathe a sigh of relief when the month comes to a close and all the bills are actually paid? What if you never had to feel this way ever again? What if you were able to get through each month with hundreds of extra dollars in the bank and you were not worried about what unexpected expenses the next month might bring? Believe it or not, this is possible, and for many, it is actually quite simple. Let me dig into the three best ways to cut your expenses.
1) Downsize Your House
Have you ever talked to your grandparents about their living conditions when they were kids? If your grandparents are anything like mine, they probably had 9 or 10 brothers and sisters and lived in a three bedroom house. Their parents had a room, the girls all shared a room, and then the boys all shared a room. Most of the time they all got along and all was well within the household.
With just two generations passed, how in the world do we all of the sudden get the notion that our children should each have their own bedroom and bathroom? This is honestly quite absurd and it is because of this thinking that many of us have houses that are far larger than we actually need. I am actually guilty of this as well. I am a single man, and I have a three bedroom, two bath house. At any given time, I am using only one room out of eleven.
If you are currently tight on money and live in a 2,000+ square foot house, it is time to downsize. Even if you have two or three kids, you can easily survive in a 1,200 square foot house and save hundreds of dollars each month on your mortgage. It is no small change, but it can make a huge difference on your bank account each month, and that is what we're going for isn't it?
2) “Downsize” Your Car
Obviously, I'm not telling everyone to sell their conversion vans and buy Mini Coopers. What I mean here is to downsize the dollar value of your car. For whatever reason, it is a popular belief that in order to have a safe reliable car we must pay at least $20,000 for it. I don't know who thought this up, but it is an absolute lie! I have been driving my $2,500 car for two years and it has only cost me $300 in repairs. Now THAT is a solid car.
By selling your expensive car that has payments and buying a used car that you can pay cash for (or that you can pay off extremely quickly), you could save yourself over $400 a month in payments! And, as an added bonus, since your vehicle isn't worth as much, it will cost much less to insure. This will save you another $50 a month.
3) Say Goodbye to Restaurants
Restaurants are downright pricey. A trip to Carrabba's can easily cost a couple $60 per meal. By shopping at a discount grocery store, that amount could feed the two of you for an entire week!
Maybe you don't throw your money away at fine Italian restaurants like I used to, but perhaps you like to buy Subway or McDonald's once in a while. Sure, it's cheaper, but it is still expensive when you compare the cost of what it would take to make these same meals yourself. You can prepare yourself a sandwich, a banana, yogurt, granola, and an apple for about $1.00. If you head to McDonald's the cheapest meal you can find is likely $3.00. And, a Subway meal is more like $6 or $7. By dining out at these “cheap” restaurants, you are still overspending by 3 to 7 times the amount of making a great meal at home! Prepare you own food and save yourself hundreds of dollars a month.
Are you ready to make some changes to cut your expenses for good?
2 thoughts on “The Three Best Ways to Cut Your Expenses”
How sad would it be if you looked back and determined you couldn’t retire or have enough money because you choose to go out to eat too much. Same with cable and phone bills. Lots of very successful retired people in my neighborhood that could own mansions but just want a small modest home. Too much to clean and they want to be financially free. They turn down cabins and 2nd homes because they want to make sure they don’t run out of money. Financial freedom and security is more valuable than “stuff.”
I absolutely love your response Lance. Many people just don’t stop to think about the trade-offs they are making when they buy a huge house. By making that purchase, many of them are prolonging their retirements by 10 or 20 years (or maybe they can now never retire)! It’s absolutely crazy. For me, I’d rather live in my perfectly fine 3 bedroom, 2 bath home that cost me only $75,000 and be financially free in just a couple of years.
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