Yesterday I posted about how the price of so many things seems to be rising. To combat inflation we have to change the way we purchase everyday items. Now some of you are very frugal by nature and have practiced controlled purchasing for a long time. Others, like to purchase whenever it is convenient and do not want to bother with the “hassle” of controlling the spending. Then there is the third group that looks for a deal but also will purchase out of convenience. Each of us can do more to tighten the belt in some area of our spending.
The first step is to have a plan. If you do not have a budget then you do not have a plan for your money. This means your money ends up going to things that you did not expect at the beginning of the month. Most people have some sort of plan for their life and it helps them to do more than they thought possible. The same principle works with money. If you do not have a budget you can read a series of posts I did on budgeting here.
Once we know how much you are currently spending on everything you can determine what areas we are overspending. Maybe you are eating lunch out five times a week at $8 a meal. That is $200 a month. Instead you could get three items off the dollar menu and spend only $60. Or get really crazy and take your lunch and spend less than $40 on lunch food. This is just one example of a simple way to cut a bad spending choice out of your budget and make some room for the rising prices.
The other key step is to reduce the amount of debt you have, preferably to none. I know this is not something people can do overnight, but if you have a car payment that is $375 a month maybe you could sell the car and get a beater that will get you from point A to point B for only $1500. Will it be as fun to drive? Absolutely not! It will however add $375 back into your budget. I know cars are fun but so are vacations, home improvement, hobbies, and whatever else floats your boat. $375 dollars a month translates into $4500 a year. That is a pretty nice vacation. Or that amount of money could buy you a pretty nice used car.
I realize that both of these ideas are somewhat abstract. To have a more practical application, tomorrow I will show you how my wife and I are only using $340 per month for groceries and eating out. We have not changed this number in the last two years (since we moved and got settled) and are not going to change it because of the strategies I am using to keep our bills down.
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