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  • Trimming Your Expenses Part Two: Variable Expenses

    Figuring out a way to spend less money can be challenging for most people, especially when they’ve become accustomed to living a particular lifestyle. The journey to financial freedom requires a plan, patience, and discipline to achieve results. The first step to getting a handle on your finances is to create a budget. A budget allows you to control your money instead of it controlling you. Creating and maintaining a budget doesn’t have to be complicated, but knowing your fixed and variable expenses is essential to building a realistic budget that works for your household.

    Fixed expenses are those expenses that stay the same from month to month. For example, car payment, insurance, or rent/mortgage. They are easy to budget for because they remain the same. Unlike fixed expenses, variable expenses can change based on your circumstance, which can be more of a challenge to manage because they never stay the same. These expenses could be more or less than what you anticipated. Managing your fixed and variable expenses could set you up to do more with your hard-earned money.

    Here are a few ways to trim your variable expenses to help you save money and reach your financial goals.

    Utility Expenses.

    Utility expenses tend to vary from month to month. Having power for lights and other household appliances helps make your home livable and comfortable. However, there are ways to help reduce your expenses in this area.

    • Start by turning off the lights when you’re not using them or when you leave the room.
    • Unplug all unused electronics throughout the house. If left plugged in, they could use a lot of energy.
    • Replace the filters for your AC/heating units regularly. This will help your unit run more efficiently. 
    • Use energy-efficient lightbulbs.
    • Lower the temperature on the water heater by a few degrees.
    • Limit taking hot and long showers, and only run the dishwasher when it’s full.
    • Use a programmable thermostat to set your heating and cooling unit. It’s recommended to set your thermostat to 68 degrees in the winter and 78 degrees during the summer.
    • Seal and caulk all window leaks.


    Food Expenses.

    Food can be costly. On average, a household of four spends approximately $1,100 per month for food, according to a USDA report. That could be a significant amount of your monthly budget, but here are some tips to help you save on your food bill.

    • Plan your meals ahead of time. Before you go shopping, make a list of all the items you need. The more prepared you are with a list, the less likely you’ll be tempted to buy on impulse.
    • Buy in bulk on items such as paper towels, toilet paper, etc.
    • Buy generic brands instead of branded products.
    • Take your lunch to work.
    • Take advantage of online ordering and pick up if your grocery store offers it. Ordering online could help you stick to your food budget and grocery list.
    • Many grocery stores offer a rewards program or app that allows you to earn points towards cash rewards and special perks. Many offer digital coupons as well.
    • Use traditional or digital coupons to help save.

    Transportation Expenses.

    It could be challenging to keep your transportation expenses the same amount each month. For example, you may travel more than the month before or less or have other transportation expenses occur. Here’s how you can save on your transportation expense.

    • Drive the speed limit. Driving your vehicle at high speed burns gas more quickly.
    • Save on gas by comparing prices because not all prices are the same.
    • Use unleaded gasoline if your car allows it.
    • Schedule regular maintenance for your vehicle, such as oil changes, tire rotation, inspections, etc., to help prevent costly repairs.
    • Park your vehicle and carpool. Also, if you don’t live too far from work, you can take the bus (if available) or get your exercise in and walk.


    Pet Expenses.

    Pets quickly become part of the family, and it’s the responsibility of pet parents to make sure they are taken care of. Unfortunately, pet care can be pricy, and if unplanned, it could put a strain on the household budget.

    • Consider grooming your pet instead of taking them to the groomers. It may take some patience and time to trim and groom your pet yourself, but it will save you money.
    • When it’s time to go on vacation, ask a friend or family member to pet sit for you instead of boarding your pet. The average boarding cost is $35 per night.
    • Buy pet food and supplies on sale or online. If the store offers a rewards program, consider joining it to earn free products and special discounts.
    • Purchase your pet’s medication online for lower prices.


    Clothing Expenses.

    Cutting your clothing costs doesn’t mean you have to compromise your style or wear old worn-out clothes. You can still look great and dress very well without sacrificing quality or breaking the bank. You can save money with these tips.

    • Seasonal shopping is a great time to purchase new clothes. Retailers mark down their merchandise to make room for new inventory.
    • Read and follow the instructions on how to clean and take care of your clothes.
    • Shop on the sales or clearance rack only if you need it. Don’t be pressured to buy simply because it’s on sale.
    • Don’t rule out consignment shops or thrift stores to find bargains on clothing. Also, there are clothing apps where you can purchase or sell used clothes at great prices.
    • Shop in your closet before you go shopping. Take a quick look at what you have in your closet and get creative. You may even find new clothes in your closet that you have forgotten you purchased.


    Entertainment Expenses.

    Following a budget doesn’t mean you have to skip on entertainment. On the contrary, there are many things you can do to reduce your entertainment cost and still have a great time.

    • Cut the cable and use low-cost streaming services instead. 
    • Host a game or movie night with family and friends instead of going out.
    • If you prefer to go to the movies, go to a matinee. A matinee usually costs less than an evening movie.
    • Check out your local library in the Midlands area to access free books (digital and on tape), magazines, games, movies, newspapers, etc. They may also have information on free activities in the community, such as concerts and festivals.
    • If you love the outdoors, visit local parks. You can go hiking, camping, and ride bike trails. Most local and national parks are free.
    • Love art? Some museums host a “free” day during the month to visit their galleries at no charge to you.

    Cutting fixed and variable expenses may seem like a difficult thing to do because you’re used to spending money a certain way. However, by making a few changes in your spending, being consistent, and having a plan, you could transform your finances. It could lead to huge savings and bring you closer to reaching your financial goals.

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