December 19, 2013 at 03:00PM from Lifehacker
Often, the first reaction when we think about changing our budgets is something similar to this: "I can’t possibly cut anymore! I’m already spending the absolute minimum!" I thought that, too, at one time. It wasn’t until I became brutally honest with myself and my spending that I realized how my spending habits were impacting my lifestyle and my long-term finances.
This post originally appeared on ReadyForZero.
I also realized that many of things I was spending money on weren’t as important to me as I assumed. They didn’t improve my quality of life or increase my enjoyment. Once I learned how to closely examine my spending, I discovered that I could cut the things I don’t enjoy from my life, and prioritize my spending so that I can do the things I want.
As you consider how you can reform your spending plan, here are four areas to focus on:
Examining Your Food Budget
One of the best places to start is with your food budget. Take a look at your shopping list, and find ways to save more at the grocery store. From clipping coupons to buying in bulk when the staples are on sale, there are numerous strategies you can employ to trim your grocery bill.
Also, re-evaluate the amount of time you eat out. You can save money by planning your meals ahead of time, and doing more cooking at home. I bought two cookbooks that are indispensable to me and save me money: A 30-minute meal cookbook and a slow cooker recipe book. Even when I’m busy, I have time to cook when I plan ahead with recipes from these books.
Of course, sometimes you want to eat out. Personally, it’s one of my true pleasures. As a result, my husband and I go to lunch once a week while my son is in school. Lunch costs less than dinner, and we don’t have to hire a babysitter.
Examining Your Entertainment Budget
Next, tackle your entertainment spending. I enjoy experiences, so this one is a tough one for me to cut. My first move was to decide which experiences I enjoyed the most. Rather than spending on a mediocre movie just for something to do, I prefer to spend on things I truly enjoy.
Look around town, and see if there are free events. Many cities offer free concerts in parks and other events. There might also be free admission days to museums and art galleries. Find out what activities for kids and families are free, and consider activities like bike rides, hikes, and trips to the park.
Another way to save at home is to look for an alternative to cable TV. Sites like Hulu, Amazon Prime, and Netflix offer you streaming for as little as $7.99 per month. Many networks offer free streaming of shows for a few days after they air. This can help you save money, since all you need is an internet connection. You have the at-home entertainment without the high cost of cable or satellite.
Examining Your Large Expenses
Take a look at the big things in your budget. Can you refinance your mortgage to a lower rate—and a lower payment? I am currently saving $300 a month due to a refinance. Also, shop around for cheaper insurance. Term life can be a cost-efficient way to get more coverage. If you think it’s appropriate, you could even increase your deductibles for home, auto, and health insurance policies. When you cut these bigger expenses, you can really whip your budget into shape.
Examining Your Other Habits
Finally, consider your smaller habits and costs. I still like my small and simple pleasures, like a new book or an occasional hot chocolate at the coffee shop. However, if you are frittering away money on small things that you don’t enjoy, identify them and stop. Get your gourmet coffee once a week instead of every day (brew it yourself otherwise). Don’t completely ignore the small pleasures, but spread them out a little bit. You’ll enjoy them more. Also, look at your transportation costs. Can you take public transportation or carpool? Consider all of these little habits, and save so that it will add up to big savings over time.
How to Closely Examine Your Budget | ReadyForZero
Miranda Marquit is a guest blogger for ReadyForZero. She is a professional freelance writer who specializes in personal finance topics. She also runs her own blog called Planting Money Seeds. She lives in Logan, Utah.
Photo by Timothy R. Nichols (Shutterstock)
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