By Ryan Velez
Getting your expenses down is a laborious and sometimes painful process that generally starts with putting your budget together. However, getting that budget is only the first step, as you then need to look to your biggest areas of spending in order to cut down, something that is best done area by area to keep you from getting overwhelmed. At the same time, it’s hard to start putting your analysis into action. A recent Black Enterprise article gives you some advice on how to cut down in these various areas.
For the vast majority of people, their largest expenses come from housing, whether it’s a mortgage or rent. Many experts recommend not spending more than 25% of your salary on your housing expenses. If you are above this line, there are a few things you can do. As a start, you can try negotiating your rent with your landlord. If you are a reliable tenant, it may be worth it to the landlord to try and make some changes to try and keep you around. Another option is bringing on a roommate. Again, you will need to discuss this with your landlord, but subletting is perfectly legal in many situations. If you own a home, all you will want is a good homeowner’s insurance policy to cover you in the event of accidents.
Another area where everyone has to pay is groceries, especially if you have a family that you need to prepare meals for. There are several things you can do to start cutting that grocery bill. For a start, understand that the coupon buzz isn’t all hype. Some consumers have actually managed to make a career out of using coupons and teaching others. By finding the best places to get coupons, you can regularly get huge savings on groceries as well as other items. The major tradeoff with this is the amount of time involved. Another thing to be mindful of is food waste. Americans throw away more than $165 billion of food every year. As a rule, try to buy only what you need, and when meat and other freezable items are on sale, stock up then hold on to them until you need them.
Entertainment/subscriptions are a bit different than the previous entries, in that they are technically unnecessary. However, the principles of sacrifice still apply. For example, if you have a cable bill costing more than $60 a month, consider using a streaming service with a cheaper cost, even if you have fewer options. This budget is the base of your financial improvement, including generating more income and investments.