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How to reduce your monthly expenditure


Date Posted: 2/5/2019 12:21:40 PM

Posted By: Faimus  Membership Level: Gold  Total Points: 1012

As we grow up we all want to study hard and get a good job that will enable us to lead a comfortable lifestyle. However when most people actually get those jobs, they find themselves living from pay check to pay check. Some even result in having talking up side jobs so as to meet their monthly expenditure needs. The big question to ask is why? There is a simple answer to this question and that is ‘spending habits’.

It is a fact that the more money an individual has at hand, the higher the tendency to spend it. Thus every month when people get or even before they get their pay checks, they already have ideas on how they are going to spend their month. However very few actually come up with a budget and thus most people end up overspending or spending their money on things that they don’t really need unconsciously and only realize this when they are running low on funds. This therefore creates a cycle where people end up living from one pay check to the other with hardly any savings.

This common problem has several solutions to it and includes the following.
• Coming up with a budget for every month.
Before spending your income, you should come up with a budget that outlines your expenditure. Your budget should be detailed showing all the items you require for the month, their prices and where to get the items. By having the prices of all the items, you have a good estimate of the total amount of money you are going to spend. These prices should relative prices and this may require you to visit different places where these items can be obtained and comparing prices so as to get the best value for your money. This may

seem strenuous but definitely proves worthwhile in the end. Coming up with a budget helps avoid overspending or purchasing things that are actually not planned for.

• Coming up with goals’ accounts
You may have noticed a new washing machine or a new car that you want to purchase but purchasing the car or washing machine at a go may strain you financially. You can either decide to take the risk and purchase the car or washing machine once you get your next pay check or may make the wise decision of coming up with a goal saving account. This is how it works; since you already have your goal in mind; that is either buying your dream car or washing machine, you then find out how much money you need to realize your goal and dedicate a certain portion of your monthly income to an account aimed at achieving that specific goal. With time you will have saved enough money to achieve your goal without straining yourself financially. The amount you sent apart for that goal, monthly, should be a flexible amount. You can also set a time limit within which you intend to achieve your goal. This may help you know how much your need to save monthly towards your goal. You should avoid having too many goal saving accounts at ago as this may strain you financially.

• Taking advantage of offers and discounts in shopping malls.
In order to push sales for their brands, manufacturing companies give discounts and certain offers for some of their commodities. As a wise shopper, you should take advantage of these opportunities. This helps you to cut down on the expenditure on these commodities or even get more for much less. However, you should not but more items than you need just so as to be given a discount. For example, you want to a pair of rain boots. The shoe store has an offer of a free pair of slippers for every two pairs of rain boots purchased. You should not buy an additional pair of rain boots that you had not initially budget for just to get a free pair of slippers.

• Invest in quality
Quality items are usually relatively more expensive compared to other items of less quality. You may therefore be attracted to a low quality item since it will cost less. This however proves to be costly in the end. For example, you may choose to a blender of a given brand costing 1500 shillings instead of purchasing another of a different brand that costs 1000 shillings more since it will cost you less although the blender costing more is of a high quality. In a few years time, the blender will break down and you will have to purchase another. In the long term, you end up spending more than you would have spent had you invested in the higher quality blender.

• Invest in your habits
Our habits are a big part of our expenditure. For example your habit may be taking coffee daily during your break at work. Let’s say that the coffee costs you one hundred shillings per day. In a year, you will spend approximately thirty six thousand and five hundred shillings on break time coffee. It is therefore cheaper to get a coffee machine and buy disposable cups so as to make your coffee at home and take it with you to work.

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