Reducing Costs

So the economy is at its worst. Inflation is up, salaries are not going up and it’s difficult to meet expenses or is it that we have to reduce our costs till we get some stability.

Wasting money is not only detrimental to your overall financial well being, it's irresponsible. Your house and living expenses make up the major portion of your financial plan. Just like spending cash unnecessarily, paying for expenses that aren't necessary is just wasting money.

With so much of uncertainty, its best to try and reduce our expenses. This way would still be able to meet our financial plan. Here are a few tips to reduce costs.

Avoid impulse spending
The first thing we do while preparing a financial plan is preparing a budget. So why not stick to the budget and avoid impulsive spending. Yes, we must have kept some amount of money aside for contingencies, but this would be time to keep our contingencies to the minimum. This is the best time to check our actual expenses more regularly against the budget.

If you have a habit of paying by credit card, stop. Use cash instead, this helps in keeping a check on impulsive buying. Withdraw the exact amount for your weekly budgeted expenses. Make sure that your expenses are met from your income and not loans. Charging expenses on a credit card and then paying only the minimum amount is nothing short of taking a loan from the financial institution. The interest rate on credit card loans is the highest.

Have more home made food.
While preparing the financial budget we must have made created a head for eating outside. This was fine when the economy was good, but now is the time to have a re-look at the budget. If you have been eating outside for lunch, start carrying Tiffin. If you must eat out try eating going to a more mid sized restaurant, this will help reduce costs. Have a picnic dinner, pack food at home and go to a beach or park and have your dinner, this is much cheaper. Another option is have a movie dinner in the house, hire a DVD and have the family movie experience in the house. Make it special. Cook food from the scratch, instead of having ready to eat or half made food, its cheaper. Kids like Pizza’s and burger’s, why not make them at home?

Stop unwanted phone features
Features like call waiting, caller ID, return call service, long distance packages, etc, etc, etc. are extra expenses. Some we might require, but others are just expenses. If incoming calls are free, caller ID is just and additional expense. If your phone as an answering machine, then important persons or people you know would leave a message. If they did not, it was not important.

Minimize costs on essential household expenses.
Try using the air conditioner only when it is really essential, than just turning it on as a routine. This will help reduce the electricity bill.
Review, remove, and reduce expenses to stop wasting money and trim your household budget. Analyze each household expense for necessity and the costs associated with it. Make an effort to reduce each expense to the minimum amount possible, while still meeting your family's needs. Before you know it you'll be saving hundreds, if not thousands, on your household budget expenses each year.

Laundry Expenses
Yes, you do not send your clothes to the laundry unless you get the hard to remove stains. But before you do that why don’t you try some household tips viz. bicarbonate of soda, distilled vinegar and lemon juice solutions can pretty much clean anything for a fraction of the cost.

Holidays
We definitely need holidays, now we can’t say stay in the house all the time. We could get mad. It will cost us a small fortune. I'm talking about holidays of course. But there are ways to have a cheap break.

Many of us, surprisingly, haven't explored our local areas in great depth. Try going to these local areas, this would come cheaper. Make an itinerary of different activities to do each day, pack a picnic and go. As you don't have to pay for accommodation it can be surprisingly cheap, just make sure you don't ruin the fun by doing chores when you get home. Ensure that it is really a holiday