Assess Recurring Monthly Expenses for Savings Opportunities

Spending falls into a wide range of categories for families and individuals, including food, shelter, clothing and a host of other items consumers need in order to survive.  Some expenses represent one-time purchases, like homes and cars, which have long useful lives.  Other buys are made over and over again, adding repeating monthly expenses to the total cost of living.  Within this discretionary pool of monthly costs are savings opportunities, which can help rebalance family budgets.

To save money on recurring expenses, start by looking closely at the things you spend money on each month.  Break your total household budget into easy to examine categories, making them easier to analyse.  Once you have a handle on the primary areas of spending – meals, entertainment, household goods, etc. – it becomes easier to isolate redundant and unnecessary expenses.  Using a disciplined and realistic approach, consider shaving those expenses that will not have a negative impact on your lifestyle, but will keep more money in your pocket, just the same.

Fixed Costs Represent Baseline Budgets

Certain expenses, like home mortgages, car payments, student loan obligations and other steady monthly demands are fixed in nature, so they aren’t always open to savings.  These fixed expenses represent your base budget, which must be met each month.  Beyond these obligations, consumers spend money on discretionary items that do furnish room for savings, when thorough analysis is applied.

If your budget issues relate to fixed costs, a drastic makeover may be required to bring personal finances in order.  Housing, for example, may be a consistent expense that busts your budget month after month.  If so, reducing expenses in this area may be the only reasonable way forward.  Multiple options exist for keeping the cost of shelter reasonable.  One alternative is to stay put at your location, and sign-on with a roommate to help share your living expenses.  If this option is not appealing, and you don’t anticipate an increase in the amount of money you earn, the only other way to reduce housing expenses id to move to a less expensive address.

Homeowners face a different set of responsibilities and options for reducing living costs.  In some cases, cash-strapped homeowners are able to restructure the terms of their home loans in order to save money, but even refinancing doesn’t always get the job done.  For some, the only way to reduce recurring expenses is to sell.

Lower Entertainment Spending Yields Budget Cuts

Beyond fixed obligations, consumers spend their surplus earnings on discretionary items.  Entertainment, for example, represents a robust spending category, accounting for movies, dining-out, concerts, and a host of other leisure activities.  And while good times are essential to keeping a positive attitude about life, overspending on entertainment can have the opposite effect, creating stress and anxiety instead.

To lower entertainment spending, take a look at subscriptions and memberships requiring monthly payments.  You may find that some of the things you pay for each month go unused, warranting a new approach to monthly bill management. Health club memberships, for example, are notorious for languishing unused, while the cost of maintaining them carries-on month after month.  Magazines too, represent incremental spending that often leads to unread publications landing in the recycling bin.  To save on monthly expenses, cut these items from your entertainment line-up.

Though discretionary spending is ripe for savings, some of the things you pay for bring real value to your household.  Don’t be too quick to cut expenses that aren’t superfluous – you may end up missing the goods or services and spending more to replace them.  The key to monthly savings is to remain aware and prioritize your personal spending.

Image by Gerd Altmann from Pixabay

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