During the pandemic many of you will have reviewed your costs in detail as you may have had less income coming through the door. Nevertheless, even if you have already cut costs it’s a good exercise to revisit at any time, and especially as we move towards Christmas and all the costs that entails.
Can you make any changes to cut costs? I know it seems very early to be thinking about it, but it’s always good to have a plan! And why stop at planning for Christmas? Good spending habits on a day to day basis can make life so much easier. Think of all the things you could do if you were saving money each week. What would be on your bucket list once you have the money put aside?
Hi. I’m Anna Goodwin, your friendly finance mentor. With over 30 years of experience, I know how important it is to review your expenditure regularly.
1. Taking Control Of Spending
So, where do you start? You start to cut costs by knowing how much you are spending. In essence, there are four stages:
- Be aware of all of your costs – put everything down!
- Calculate your total income
- Prepare a budget
- Stick to the budget
Make a list of all your costs and then consider how you can bring these down. You are likely to have a mixture of long-term and short-term actions. Make sure that you choose some actions which come to fruition quickly to keep your motivation up as well as some that may be bigger savings but may take longer to implement.
To get you started, download my free Action Plan.
Here are some ideas on some quick wins which will motivate you to keep up the good work and cut costs.
2. Take Out A Set Amount Of Money Each Week
It’s particularly easy to overspend without thinking if you tend to pay for everything using debit or credit cards, especially if you’re using contactless payments, as is often the case at present. Being able to pay with things by using your phone has not helped.
As I have been using my card more recently, I tend to write down how much I have spent and where so that I am more aware. It can help to take a set amount of money out for the week, taking into account your travel expenses, food budget, bills and general spending money.
Also write down everything you spend money on each day – even small items like a chocolate bar can add up over the course of a week. Taking note of everything you’re buying can help you keep track of where your money is going, allowing you to know where you can easily cut costs.
You may not be able to note it down there and then, but say ‘yes’ to the receipt and keep them safe until you get home then keep a log of your spending. Maybe the thought of having to write it all down when you get home may be enough of an incentive not to buy in the first place!
3. Walk More to cut costs
Cut petrol costs by walking whenever you can. Not only will you cut costs but it will improve your health too!
You may already have realised savings from travelling less during the pandemic. And if you can’t avoid driving, there are ways to make your car more fuel efficient – which will save you money in the long-run. Keeping your tyres inflated, decluttering the car and keeping the air-con to a minimum can all help, as can accelerating more gradually and changing up a gear sooner.
4. Cut costs on Your Food Shopping
Having everything written down and sticking to a list can make a difference. Without one you are more likely to put things in the basket you don’t need. Many of you will have changed your habits during the pandemic and found that this has become second nature and resulted in savings.
And while online shopping may seem easier and may stop you from making impulse buys, this isn’t always the case. So, as more of us are using online shopping, make sure you really want that special offer before you confirm your shopping list!
5. Use a Budgeting App to cut costs
This will help you to keep track of your daily expenditure. Apps include Mint or Quicken but find one that suits you.
As you go about your daily tasks both at home and at work, think about any expenditure you can cut back on. Perhaps thinking about what you can be putting that money towards will help you look towards a brighter future. Good luck!
Next time will be about business finance mentoring and how it can help you.
Anna Goodwin @2021 All Rights Reserved.