Cutting back’ is something that everyone dreads to hear. The thought of having to adjust your spending and make savings isn’t exactly fun. With life being as unpredictable as it is, however, making savings from time to time is a necessity but in most cases doesn’t have to be permanent. If you’ve never been great at saving or haven’t got a clue where to start, you could get some good tips on learning to cut back below.
Why you might need to cut back
There are multiple reasons why you might have to cut back on your spending. You might have a large expense to save for such as a wedding or a vacation. You might have lost your job or moved to a job that pays less. Unexpected expenses such as car or home repairs are another reason that you might have to make some adjustments to your spending. You may also need to cut back when your credit is bad, and you’re trying to prepare to make a big purchase such as a new house. Even if there is nothing major happening in your life that you need to save for, everyone can benefit by cutting back to free up some additional savings.
It starts with working out your outgoings
To be able to cut back effectively, you’re going to need to know how much you spend each month on everything from bills and housing costs to entertainment and luxuries. Set up a spreadsheet and record the exact amounts (not estimates) that come out each month. Add your income and work out what’s left once you remove all of those expenses. If it’s not much, then you will need to make some changes to be able to factor in some savings or to pay something off.
Some outgoings can be written off straight away. If you’re paying for memberships that you’re not using, make sure that you cancel these to free up some money instantly. For other expenses such as your cell phone or credit card bill, see if you can switch providers to benefit from a reduced rate and help you make easy savings without having to cut back. Could you go to a cheaper gym or better yet, work out from home? When looking at ways to cut back, it’s important not to make rash decisions. Do not cancel your health and other types of insurance, as the cost of being without these can be far more than what you’d be saving each month.
Many costs can easily be reduced, including your energy bills. See what’s possible to adjust and then see what your shortfall is to see how much you need to cut back in other areas.
Being more frugal
To be able to really cut back, you’re going to need to adjust your shopping habits. You can benefit from the wisdom of many frugal shoppers to help you save money with tips you’ve never considered. Most of us shop in the way that’s most convenient for us. This means buying from the closest store or impulse buying when we see something that we like. However, by shopping around and thinking a bit more before making purchase decisions – you could save yourself a lot of money.
Grocery shopping is one of the ways you can cut back the most on your monthly expenses. Shopping for reduced items or those that are on sale will save you a lot, provided that you use the food that you buy. Buying frozen fruit and vegetables will cut out preparation time, and save food waste that is also damaging to the environment. Planning your meals for the week in advance and creating a grocery list based on that plan will mean that you only buy what you need and aren’t tempted by treats and foods that may not get eaten.
With clothes, you can cut back easily by changing where you shop. If you have expensive tastes, you might want to consider popular fashion brands instead. You can get some great clothes that are on-trend and affordable, and mix them in with your existing pieces. It’s also a good idea to take advantage of discount coupons when shopping online as these could save you a lot of money on necessary purchases.
Grooming is another area that you might want to cut back on. Switching your shampoo or facial cleanser could help you save a few dollars, especially if you buy these products regularly. You might want to stop buying new products that you don’t necessarily need and try different salons for haircuts, waxing, etc. There is more to feeling good about how you look than how much you spend on achieving it. Many beauty treatments such as manicures can be done at home, so if you’re trying to cut back, these are some of the first things that should go.
Making long term changes
After cutting back on many of your usual outgoings, you might find that what you were spending before was wasteful and unnecessary and form new habits for life. If your financial situation shows no signs of improving in the near future, you might want to consider making long term changes such as moving house or selling your car. These things might seem drastic, but if it helps you get out of debt and make it more affordable for you to live – they’ll be worth it.
Improving your financial situation takes patience, but that doesn’t mean you should deprive yourself. Allow some room in your budget to cover some luxuries and entertainment, but on an adjusted scale to before. If your focus is on saving all the time, life can seem very dull. Having things to look forward to will make it easier for you to stick to your savings plan and less likely to turn to avenues that could lead you into debt.
Learning to cut back is tough, but with a positive outlook and focus on why you’re doing it – you can be happy. Finding bargains and making savings can make you feel good and you might find that you have more money to spend on things that you love or vacations as a result. It will all be worth it when you succeed at making the savings you need.