subject: How To Control Your Expenses??? [print this page] The best way to be financial independent is to keep your monthly expenses under check. But you would say that you don't spend that much. Well, if you keep a record of every penny spent, you make for one month; you would be surprised and you would discover that how much you are wasting each month. So, as difficult it might be, we advise you to keep track of every penny you spend for at least two months. At the end of each month, divide up your expenditures in two categories and find out how much of your spending was unnecessary.
There are two types of expenses you do each month: fixed and variable. Fixed expenses are those expenses that dont vary each month; like mortgage or housing payment, car loans, personal loans and anything that cannot easily be changed or eliminated each month. Any changes in a fixed expense would require refinancing your mortgage, car payment, selling off assets, etc. Variable expenses are those expenses that vary each month as per the situation comes across. This includes food, clothing, entertainment, vacations, utilities, etc. It is easy to reduce on variable expenses than fixed expenses; this is where we need to work on in order to reduce down on our spending.
Dipping variable expenses entail change in your habits or doing without. For example, you can prepare meals rather than using frozen foods which are relatively expensive. Terminate your cable and mobile phone services when your contract expires. Use e-mail instead of making long distance phone calls. You might have to give up your weekly manicures or adopt a low maintenance hairstyle so you require fewer trips to the hair salon.
Write it on a worksheet everyday and make a list of your variable expenses and compare by the end of the month. The expenses include: Cancel voice mail, Get free checking account, Bring lunch to work every day, No vending machine snacks, Transfer high credit card balance to low-rate card, Fewer long distance calls, Prepare meals from scratch, Dry cleans less often, Cancel cable television, Cut back on entertainment, Wash your car on your own, Buy clothes from the place where they are cheap and good quality.
Compare your expenses with the month you worked on these expenses with the previous month; you would surely end up saving money and reduced expenses. By working on these expenses will make you financially stronger and financially independent, less burden of debt on your head, more towards saving which could be utilized on any unforeseen occurrence or may be buying a property as an asset.
