If you are like most of us you have areas in your budget that could be trimmed by at least 20%. What about your grocery bill? Unless you are using every cost-cutting method available, then you could even beat that 20% on your food bill.
Each area of your expenses has room to be trimmed. Let’s just briefly discuss a few:
Housing – This includes your housepayment, insurance and taxes. The best way to cut your housepayment is to refinance. This would only benefit you if you can refinance and cut at least 2% off your current interest rate. This could possibly cut your housing expenses a few hundred dollars a month. You can also check around for cheaper homeowners insurance. If you rent, about the only way to cut this expenses is to find a different place to live. There are a lot of other considerations in moving so you may want to try cutting expenses in other areas.
Other Bills – This is the area where you could possibly find the most cost cutting. This covers everything from your electric bill to your credit cards.
Household – When you are talking about saving money on your household expenses you have to be careful not to cut too much. This covers groceries, car gas, and everything else it takes to run a household. Very often when bills are made there is no money in other areas to make the payments so people tend to take the payment from their household expenses. In most cases this is what leads to serious financial problems very quickly. NEVER short change your household expenses. You can do what ever you can to save on things like groceries but make sure you have enough to live on, even at the expense of other bills.
Savings – Yes, savings should be considered an expense. You need to have a nestegg to ensure that your future needs are met. Try not to cut your savings below 10% of your total take-home pay. Believe me this could save you a lot of problems later.