|Top 5 Tips for Increasing Income|
Are you trying to work out of debt or save for the future? Then it's time to reduce your monthly outgoings. Most people are blissfully unaware of how much they're spending on little things (and big things) until the bills come in and they realize they have a negative cash flow. Fortunately, you don't have to live like that. Reduce outgoings monthly so you'll have more savings for your hard work.
Top 5 Tips for Increasing Income
Write Down All of Your Outgoings
You can't make changes until you know where your money is going. Start by writing down everything you spend on for three months. This includes money you spend on everything, even small purchases like coffee or magazines. Most people know how much they're putting on their credit card because they get a monthly statement, but they aren't always aware of how many small purchases they make using cash. Those little purchases add up.
Reducing Outgoings: Analyze
When you have three months of outgoings on paper, separate them into mortgage, food, transportation costs, entertainment, clothing expenses, utilities, etc. A spreadsheet makes this task easier. Add up the totals, and compare them to your monthly income. If your outgoings exceed your payment, you'll need to make changes to avoid falling deeper into debt. Look closely at your outgoings for nonessential categories, like entertainment and travel. Cutting back in these areas is usually the easiest. If you already have a closet full of clothing, clothing may be a nonessential item.
Adjust the Big Expenses
Outgoings are typically greatest for mortgages or rent payments. If you own a home, you may reduce your costs by remortgaging. Moving into a smaller unit can save significant money if you're renting. Energy bills are another big expense. If possible, reduce outgoings in this area by switching suppliers, insulating your home better, turning back the temperature, and cutting back on how much water you use. Turning your thermostat back by 1-degree centigrade can reduce your heating bill by as much as 10%. If you don't talk on your mobile phone often, switch to a pay-as-you-go service. Compare car insurance rates online, and find a better rate. Spending too much on fuel? Trade in your gas guzzler for a more fuel-efficient car or take public transportation. Even better? Walk.
Adjust Little Expenses
Little expenses add up. Here are ways to reduce outgoings in this area:
- Borrow books from the library rather than buying them.
- Brew coffee at home instead of going to a coffee shop.
- Pack a lunch, and cook at home in the evening rather than eating at a restaurant.
- Shop for clothing at thrift stores and online auction sites like eBay.
- Cut back on travel. Find creative ways to have fun without leaving home.
- Cancel your gym membership, and work out at home. You can find free exercise videos on U-Tube.
- Eliminate costly habits like smoking that are also bad for your health. You'll save on doctor bills too.
- Stop spending on expensive beauty products, and use household items like yogurt, olive oil, honey, lemon, and oatmeal to care for your skin and hair. Look for recipes online.
- Question each purchase before handing over the money. Can you live without it? Chances are you can.
Reduce Outgoings and Increase Savings with Better Planning
Plan your outgoings carefully and be thrifty in the future, and you'll have more to show for your hard-earned income – and less debt.