One of the most common questions anyone having monetary difficulties asks is how they can lower their expenses. The most simple and straightforward answer is to write a budget. A budget incorporates all the other answers you may have heard. It incorporates taking a closer look at where your expenses are, it makes you reconsider how to make more money, it pushes you to recycle and reuse and it opens your mind to hundreds of possibilities that will lower your expenses. Too many people only focus on lowering the amount of one expense rather than multiple expenses. Which one do you think has lower expenses in the end, the person who doesn’t write a budget or the person who does?
The Benefits of a Budget in Its Entirety
Making a budget is like putting a GPS tracking device on every dollar you make so that you know where it’s going and you know when it’s safe in your savings account. On the other hand, what you most likely don’t want to see and the reason you need a budget is that the GPS tracked money also makes you aware of the places of misuse it is going. Instead of your bank account you will see that it is going to wasted electricity, junk food and uselessness. To see that the money you work hard for is going somewhere that does not benefit you can be painful. But before any progress or changes can be made, this realization must occur.
As a result of being aware of the direction all your money is coming and going from you can put a stop to the bad and enhance the good. Expenses are lowered and savings are raised. When time is taken to map out the flow of money you get a special insight that allows you to make corrections to the priorities you want and the priorities your money thinks you want. A budget not only aligns your priorities but your habits and your life as well. The simple process of writing a budget sets your money making experience on the right track and in this world where most divorces are brought on from arguments over money, and lifestyle is based on the amount of money you have and respect is based off of income, having control of your money allows you to take control of your life.
That is what a budget is, it’s taking control. By having control you can lower expenses. Like all activities that require effort, you get out of a budget what you put in. When you put in your energy, persistence and discipline, you get a similar degree of your expenses lowered.
How to Lower Expenses by Looking At the Budget Expenses Structure
Charity: After noting all sources and amounts of income, some say it’s counterintuitive to begin the budget making process by noting how much you are going to give, whether it is to a church, to a local food or clothes collection, to a well known organization or to a person you meet on the street, giving is the first priority to the budget lifestyle. By having charity expenses first, your mentality begins to shift and the little voice inside your head tells you that you have enough. If you constantly think that your expenses far exceed your ability to give to the less fortunate, you will be fighting a losing battle. Before you can lower expenses you need to be in the mindset that you have plenty of money. Not only does charity benefit your mental state but it teaches your children value and shows all others that you are a person to be respected. It’s not something that only impacts you, it creates a ripple effect to all those in your life and all the lives you have given to. This is the paradox of the budget, in order to lower expenses you start by creating or expanding the expense of charity.
Savings: The next section of the budget is savings (emergency, retirement, college, etc.), and other short term savings for goals you may have. This part of the budget sets you up with the accountability you need to save. It forces you to plan and figure out how you can save before you even know what you will spend. It allows you to reconsider the goals you have made for yourself and the future items you want to spend money on. After all, if you have money to give to charity than you also have money to save.
Expenses: Now that you have the two areas you want your money to go to, it’s finally time to take a look at your expenses. When starting this process, the budget has you focus on big expenses first, like housing. Then you look at things like utility bills, the cost of food, the car and other miscellaneous items. A budget organizes your expenses from largest to smallest so that it is easier to see where you can cut back. You obviously can’t cut back on rent unless you move but you can surely find a different means of transportation and cut back on junk food. The expenses section is the heart of the budget. It is where anyone can make the most improvements but it is also where the poorest of choices can be made. It can be difficult to face the fact of where your money is really going when you have a budget written out but one only needs to remember that the budget is about putting you in control. If you can choose to blow money on expensive new electronics and going out to eat every day then you can also choose the opposite. By writing a budget, you get to tell your money where to go. Soon you won’t even need to put a tracking device on it, it will be habit.
After knowing what your expenses are you can figure out how to lower them. By creating a drop list, a list of expenses you are going to stop making or lessen, you will be amazed at how far out of the negative you can go. Once consistent with updating the budget, you will find that you are not only leaving the negative but entering the positive and at an increasing speed.
Writing a budget can be a grueling process but it is at this point that you can get creative and make it fun. If you consider yourself an environmentalist, you can find ways to save money and energy to lower your expenses. If you have wanted to get more fit and improve your figure, you can rewrite your grocery list and exclude all the poor food choices, thus lowering the cost of groceries. You can make small cuts back like these or you can go after the big ones like moving to a cheaper place, cutting cable or even searching for better insurance plans. The possibilities are endless when you want to lower expenses but you will never know the endless possibilities until you write out a budget.
Closing the Budget Book
It isn’t the budget itself that lowers your expenses, it is writing the budget. It is the psychological affect that goes in to being serious about where your money is going to and how much of it is staying with you. Lowering your expenses can be entertaining if you take the time to sit down and search for creative ways to cut back and spend less. The last note to keep in mind is the less you spend, the more you have: more money, a better attitude, increased respect and an overall greater quality of life. Creating a budget is not only about lowering expenses but empowering your life through financial stability.