It is common in times of recession for people to panic about money and security. Most people though can find ways to reduce monthly expenditures without sacrificing quality of life. It comes down to being savvy with how that money is spent every month.
Expense Log
For at least a couple of months it is wise to keep a log of where money is spent everyday. On this log, everything is recorded; nothing is too small. At the end of the month each category is totaled giving a picture of where the money actually goes.
Cheaper Phone Bill
Phones have become a major expense, so it would be wise to look at ways to reduce this outflow. Use cell phones only when needed instead of out of habit. Demand better rate packages from the cell phone companies to make them competitive. For long standing customers, there is usually a customer service section directly responsible for customer retention.
For the home phone, look at switching to a Voice Over Internet Protocol (VOIP) phone service instead of the standard carrier. This means that only a high speed internet service is needed instead of a residential phone line. Be aware that not all VOIP cover emergency services. If long distance bills are high, then consider using VOIP for these calls or buying a long distance phone card.
Cut the TV
TV services can be another source of monthly expense. Consider watching programming over the internet as many shows are offered for free. The same goes for the daily newspaper; most papers have their news stories online for free. Get in the habit of using the library for magazines and books.
Travel Off Season
For travel deals, watch the places that are either on their shoulder fringe season, or that no one is going to. Subscribe to last minute deal newsletters, and be willing to be flexible in travel destinations. Check out the article Travel for Free or Almost Free for more tips
Trimming the Grocery Budget
Food is a major expense for most families. Part of this has to do with the reliance on processed meals, and food that is grown out of season. Learn to cook simple yet nutritious meals that can be warmed up throughout the week. Learn to cook with basics such as lentils and chick peas, which are a good source of protein and nutrients. Instead of eating in restaurants, make the effort to cook at home. Use garden space to grow fruits and veggies. Even a planter on a window sill can grow food.
Watch for sales on food items, and have a freezer to take advantage of deals. Often grocery stores mark down beef, even though it actually improves as it ages. Fruits and vegetables are often discounted as they become ripe, and can be frozen for use in baking and smoothies.
Check Out the Used Markets
Second hand stores and online groups such as Freecycle are great places to get needed items for the home. Avoid the compulsion of always needing the latest and greatest toy. A year out of date can save money.
Watch those Insurance Policies
It is common for people to spend money on financial products they do not fully understand. Insurance companies count on this confusion to sell flawed products such as whole life and universal life insurance. The wise consumer is armed with knowledge from consumer advocates. A good source of information continues to be the Wealthy Barber for its simple and informative format.
Money in the House
A spare room can often be rented out to a lodger. Check with local bi-laws, and be selective in the renter screening process. Talk to an accountant to discuss what deductions are available to save on taxes
Talk to the bank to see if there are ways to reduce interest paid on the mortgage. Often a mortgage paid bi-weekly will dramatically cut the interest and length of the mortgage.
There are ways to tighten the belt without it causing pain. Just be aware of where the money goes each month, and make smarter financial choices.
References
The Wealthy Barber, David Chilton, Three Rivers Press, 1997
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