Spending less than you earn is the ultimate goal of most budgeting plans.
By making sure that you’re spending less than you bring into your household, you can ensure that you’re less likely to get into debt, and more likely to achieve your savings goals. However, while the concept of spending less than you earn seems simple enough, it can be more of a challenge than it appears.
If you’re the kind of person who seems to be constantly living from one payday to the next, you’re not alone, but it’s important to start putting a budgeting strategy in place. Here are just some of the things you can do to ensure you spend less than you earn.
1. Get Rid of High-Interest Loans
If you took your loan out a couple of years ago, then you might not have had much choice of your interest rate. However, that doesn’t mean that you can’t do something about it now. Re-financing a high-interest loan can be a great way to bring down your monthly expenses. However, it’s important to make sure that you look at the options available to you before you simply agree to switching to a different loan.
Look at everything from the costs of switching your loan, to the APR you can expect to pay on the new loan. Even if you can save a little each month on your interest, you might be surprised how much better off you are.
2. Use a Shopping List
Supermarkets are deliberately designed to get you to spend more than you originally planned. That means that it’s all-too-easy to convince yourself that you should buy something because it’s cheaper than usual, or because you deserve a treat.
A good way to make sure that you don’t overspend, is to always go shopping with a list. You can even make sure that you bring just enough money for the items on your list, so you have no choice but to stick to your guns. Remember, just because you have a list of items you need doesn’t mean you can’t compare brands for better prices.
3. Switch Providers
A lot of people regularly over-spend on their monthly bills because they assume that they’re paying the best price for everything from broadband, to electric. However, the truth is that switching providers can save you a serious amount of cash each month. All you need to do to find out whether you can get a better deal is go online and start using a comparison website.
If you do find a better deal and you don’t want to switch, you can consider calling the customer service team for the company you’re already with. Telling a brand that you’re thinking of moving can convince them to offer better deals.
4. Examine Your Subscriptions
Another way that we spend more than we mean to each month, is by signing up for subscriptions. You might have a subscription that delivers razors to your door each month, or a you may have something simple like a gym membership that you never use. If you’re getting great value out of a subscription that you use all the time, then there’s nothing wrong with keeping that in your budget. However, it’s worth looking through your subscriptions once every few months and double-checking that you’re not paying for something you no longer want and need.
It’s easy to get caught up paying for a subscription that you no longer want, simply because you forget that you’re paying for a monthly service.
5. Buy a Less Expensive Vehicle
Many of us need a car to ensure that we can get to work each day and earn a living. However, it’s important to think carefully about how much your vehicle costs you in terms of insurance, tax, and maintenance. If you’re constantly paying for extras for your existing car, then you might want to think about switching to a car that’s less expensive to run.
Another option is to cut down on the number of cars you’re looking after. If you’re a two-person household both working in-town, then you might be able to get by on just one car, instead of two.
6. Cut down on the Luxuries
Finally, while you shouldn’t cut all of the fun stuff out of your budget when you’re managing your spending, it’s still worth compromising wherever you can. Try and give yourself a specific budget for how much you can afford to spend each month on luxuries like takeaways, trips to the cinema, and other things that you don’t necessarily need.
Start with cutting back slightly, then cut a little more each month until you’re in a situation where you can really make a dent in your saving goals.
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