Part 6:
Ways to Cut Expenses and
Save Money

If you're in a financial crisis, or even if money is just a little tight, there are a lot of things you can do to lessen the stress by cutting out some unnecessary expenses and putting that money to better use.

If you are facing foreclosure, then you especially need to get serious about counting every penny and make sure you're not wasting money anywhere.  But even if things are not that bad, you may benefit by taking a closer look at your spending.

Eliminate Unnecessary Expenses

The most obvious starting point is to get rid of any expenses that are not absolutely necessary.  For instance, how often do you eat out?

Eating at restaurants can be fun and seems easier than cooking something at home, but it's also a huge waste of money, especially if you do it on a regular basis.  Usually you'll end up spending many times more for a meal what it would have cost you to eat at home.

Many people don't realize how much they're spending on eating out.  If you eat out more than once a week, you're probably spending a lot more than you realize.  Start keeping a log of how much you spend on a weekly and monthly basis.  Chances are, it's more than you thought and you could have eaten at home for much less.  Or even better than keeping a log is to just quit eating out!

If money is tight, there is no reason to be eating out.  It may take looking at things from a different perspective, but there is almost no real reason to eat out most of the time.

You don't need a coffee from Starbucks every morning.  If you feel you really need some coffee, make it at home.  You don't need to eat out or buy food from vending machines at work.  Pack your lunch and snacks and take them with you.  You don't need to go out to eat after work or for dinner.  Get some groceries and eat at home, even if it's just a sandwich.

Besides the money you'll save, you'll probably be eating a little healthier at home too.  Most food that you get at restaurants is loaded with stuff your body doesn't need, which just adds to the stress by making you feel tired and may even contribute to getting sick.

Some people work two jobs and eat out every day because they feel like they don't have time to make something at home.  Often, if they did the math, what they're making from the second job is just paying for their eating out.  If they'd eat at home, they wouldn't need the second job.  Imagine how much less stress they'd have!

Even if you don't eat out, what kinds of food do you eat at home?  If your grocery list usually consists of frozen dinners, pizza, and other already-prepared foods, along with soda and alcohol, you could probably save quite a bit on your grocery bill too (and later on, doctor bills).

Foods that are already prepared are almost always more expensive.  You're paying for the convenience of just opening a box or can and putting the contents in the microwave.  It may take slightly more time to put something together yourself, but really, how long does it take to make a sandwich or a bowl of cereal?

Ok, enough about food.  You get the point.

What other expenses might you be able to cut back on?

Well, one of the first places to look is at your monthly expenses.  A lot of things we get used to are really just luxuries and not necessities.  For instance, TV.  TV is not a necessity.  In fact, you'd probably be better off without it.  It is probably the biggest reason most people don't get enough sleep and don't get the things done they need to do.

Besides robbing you of sleep and precious time, usually when you watch TV you're being bombarded with advertisements for other things you don't need, which are all presented as necessities.  Companies wouldn't spend millions of dollars on advertisements if they didn't work.  They clearly make people want things and spend their money, whether consumers realize the influence or not.  By reducing your exposure to advertisements, you also reduce the number of unnecessary things you want to buy, which helps you save even more.

If you think about it, there are probably only a couple shows that are really your favorites.  Most TV networks have their shows online on their websites now, so if you're paying for Internet already, you could just watch your shows online.  Or wait for the season to come out on DVD and buy or rent it.  You'll save a ton over paying for cable or satellite every month.

While we're on the subject of Internet access, sure it's great, but is it absolutely necessary?  If your job doesn't require it, then it's probably not necessary.  If you have a laptop, there are quite a few places that have free wireless Internet access.  Some do charge for it, but there are still places it's free.  Even if it's a coffee shop or restaurant and they expect you to buy something, if you're careful you could probably still spend significantly less than if you paid for Internet access at home.  For instance, let's say you get a cup of coffee for $1.50 and you come in once a week to get online, that's about $6.00/month, and what are paying for Internet access?

What about your telephone?  If it's necessary for you to have Internet at home, or you decided you just can't part with it, you might check into one of the VOIP (Voice Over Internet Protocol) services out there, such as Vonage.  These services allow you to use your Internet connection to make phone calls and it's often a lot cheaper than a telephone line.

Nowadays just about everyone has a cell phone.  If you have a cell phone, do you really need a home phone too?  Some people have gotten rid of their home phones and just use cell phones.

And what about your cell phone plan?  First of all, do you really need a cell phone?  I know, the thought of getting rid of your cell phone isn't appealing, but it's a pretty big expense and it is actually possible to live without one.  People did it before.  If you can't part with it, is there anything you're paying for that isn't necessary?  If you're paying for extras, or maybe more minutes than you ever use, see if you can trim back and save some money.

If you have a car payment, or maybe multiple car payments, is there some way you could get rid of a car?  If you absolutely need however many cars you have, could you perhaps downgrade one to a cheaper car?  It's nice to have one car that's really dependable for trips.  But not every car in the family has to be top notch.  If you can get something cheaper for a second car, you may either be able to eliminate a monthly bill or at least reduce it.

Do you have a gym membership?  If so, when was the last time you went?  If you go regularly, good for you.  But if you can't remember what month you went last, maybe you should think about cancelling it.  A lot of people keep paying for gym memberships because they know they should be going.  But look at the facts.  If you're not using it, stop paying for it.  Start doing push-ups and sit-ups at home and going for walks.  If you can do that consistently for a few months, then maybe you'll stick with going to the gym again.  Or maybe you'll decide to just keep working out at home and save the time driving to the gym, as well as the monthly expense.

Do you have any expensive toys you're paying on monthly like a motorcycle, boat, 4-wheeler, etc.?  Most people don't use these things as often as they thought they would and they just end up being expensive dust collectors.

Will it really make a difference?

You may be thinking, will it really make that big of a difference?  We're just talking about a couple bucks here and there.  I'm more than a couple bucks short, I need hundreds of dollars.

Well, ok, let's do some math and see.  And let's be very conservative with the numbers.

Let's say you're married and you and your spouse eat out three times a week, nothing fancy most times, maybe a combo meal at a fast food place most times and occasionally going to a slightly nicer place, but averaging about $8/meal per person.  And maybe twice a week you buy a coffee at Starbucks for $2.50.  Let's say you're a soda drinker too and buy one soda from the vending machine at work each day for $1.50.

Let's say you had a gym membership that you weren't using that was $30/month.  Maybe you have a car payment that's $275/month and you sell that car and get a cheaper car that has a payment of $200/month instead.

Since you and your spouse both have cell phones, you decide to get rid of the home phone, which was about $40/month.  Ok, now you decide to really get serious and you cancel your cable since you can watch your favorite shows online and there's never anything good on anyway.  You had just the basic package, which was $35/month.

Ok, that's all you feel like you can cut back on for now.  Let's do the math.

Ok, let's see what we'd save by not eating out.
2 people  x $8 x 3 times per week x 4 weeks = $192/month

Starbucks
$2.50 x 2 times per week x 4 weeks = $20/month

Soda
$1.50 x 5 days x 4 weeks = $30/month

Gym membership
$30/month

Car payment
$275 - $200 = $75/month

Home Phone
$40/month

Cable
$35/month

Add that all up and you'd be saving $422/month.  If you had an extra $422/month, wouldn't that help ease your financial burden and stress?  And in reality, your quality of life didn't go down in this example.  If anything, it went up.  And these numbers are very conservative.  The average household could save a lot more than that.

If you want to take it a step further, multiply that times 12 months and you see you'd be saving $5,064/year.

What are some other ways to get out of a financial bind?

As we just considered, one of the first steps should be to cut out any unnecessary expenses.  Many times that alone will free up more money for necessities.

But if that just isn't enough, you could get a second, part-time job.  Working two jobs can wear you out quickly, though, which can have a negative impact on other areas of your life.  It can cause you to want to splurge on little luxuries for yourself here and there because you're stressed out, which just adds to the problem, or the stress may make you want to eat out more.  It can also have a negative impact on your job performance at your main job, which could get you in trouble or even fired.

But sometimes it's necessary to work at a second job, at least for a while, to get caught up financially.

Another option is to sell some things around your house that you don't absolutely need.  For bigger things like a car, boat, or TV, maybe put an ad in the paper or have a yard sale.  For smaller items, like collectables, jewelry, ipods, DVD's, video games, etc., maybe put them on Ebay or sell them at a pawn shop.

Selling your stuff is sort of a short-term solution and can be tough to do, but it can give you a little extra money right now and ease some of the pressure.  If there were some things you really hate to part with but realize they're not absolutely necessary, like a large, high-definition flat-screen TV, once you get caught up financially, you can always save up and buy another one.

In Conclusion

If you're facing tough times financially, these are a few steps you may be able to take to ease the burden.  Some are short term, while others will save you money on an ongoing basis.  If you spend less, that means you have to make less, which can reduce your stress.

If you've gotten yourself into a bad situation by spending more than you had, it's important to realize the root of the problem and make sure you have a plan to prevent it from happening again.

If you've just been a victim of circumstances beyond your control, it's unfortunate, but sometimes things like this happen.  To be blunt, it won't do any good to sit and cry about what happened.  The only thing that will help you is to make the decision to do your best to improve your situation and take immediate action to do so.  You can't change the past, but you can change your future.

How things turn out for you largely depends on the actions you take today.  If you are in a bad situation financially and that is a factor in why you're selling your home, you've taken an important step by contacting us.  We'll do our best to help you in any way we can.

Sincerely,

John Smith

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