Simple Ways to Reduce Your Expenses

To defeat an enemy, the first thing you need to do is to know him better. That is why you need to have a complete picture of your expenses. It is very important that documentation for every expense you make is as detailed as it gets, so that you could know: on what exactly did you spend the money and how you did this. Did your expense involve another fee that you could avoid or a payment that wasn’t necessary?

Financially speaking, the easiest scenario to cut your expenses is when they are high. Unfortunately, reducing your expenses when you live like a king can be thought of as a decrease in your living. That is why people with problems paying their loans are not willing to cut their expenses. They will simply go on with their life style. If the income will not increase, they will have to face the harsh reality of going to personal bankrupt and, eventually, they will have to quit their luxurious living.

That is why you need to know what you’re spending money on and more importantly, whether those things are really important to you. Don’t play around with these things, as you will get burnt. The majority of people is located between abundance and total lack of money. It’s easier to go bankrupt than to earn loads of money, that’s why you need to be careful with your expenses. Spend more as you earn more and maintain this ratio.

Ways to Reduces the Expenses

You have below a list that can help you reduce your expenses, even if you already know how to manage your funds. What you need to do is to :

Reduce acquisition cost
Make the product/service that you need (DIY)

Knowing these two basic principles, you will be able to try and apply new techniques, more diversified:

Reducing the price

eliminate the intermediaries
buy in bulk
use discounts (savings, seasonal campaigns, last minute…)
make a thorough selection of your products
whenever you can, negotiate

Make the product/service that you need

product making (in-house manufacturing, from canned food to dog house)
making the service that you need (from car washing in the backyard to cloth weaving )

There are people who were able to start a small business after they were imposed by life conditions to cut expenses. There are people who are selling hand made products; technique they learned when they had to quit the previous life style because it was too expensive. You don’t have to be ashamed by the choices you will have to make. It is better to prevent the problems than to face them.