At a time when prices, in general, have soared, with a sharp rise in inflation, it is increasingly important to control spending to reduce your monthly budget.
Among these are those actions we can put into practice, translating into immediate and short-term financial relief, some of which can be applied in our daily lives.
9 Tips to Reduce Your Monthly Budget:
Reduction of water consumption
It is an “old” recommendation, and it is time we try to adopt it as a permanent habit, rather than considering it solely for the price increase.
Reduction in the consumption of water, other than the fact that it manages to uphold a duty to most economies by reducing the payment bill each month, displays an essential gesture so that the resources of our planet can be preserved. The start can always be made with the everyday actions of a person, like turning off the tap while brushing your teeth or washing dishes.
Other than just the afore-mentioned, we waste a lot of the water that comes from our showers waiting for it to heat up. Store this in bottles and use it to water plants or to flush the toilet.
Reduce electricity costs
One reduces one’s electricity bill by carrying out small gestures in one’s everyday life. The most obvious and simplest action to take would be to switch off all the lights in a room when not leaving it.
Another very effective tip is to replace incandescent bulbs at home with LED bulbs. The latter can save you about 80% brought in by your monthly budget. Therefore, while this replacement is going to require an upfront cost, you shall be able to offset this very fast.
What is more, why not use the “eco” mode on your washing machine and/or dishwasher? These are the programs set in for saving water and electricity with every single wash. This is a very good way to reduce your monthly expenditures.
Less eating out
It may be lunch or dinner at a restaurant or having breakfast at a local bakery—a nice break from an ordinary routine. However, when it becomes a regular habit, it can put a serious dent in your monthly budget.
To understand the impact of these costs, we just need to do some simple calculations: imagine that every day you have breakfast out, which consists of a coffee accompanied by a custard tart.
Going to the supermarket? Only with a list and without hunger
Many of us make this mistake quite often: we know we need to go to the supermarket because we are missing something at home, but we don’t really know what it is. The result: we end up bringing more than we need because we are unsure whether we are missing something or not.
In addition to the extra costs, depending on the type of food, this act can also lead to its deterioration due to tight expiration dates.
On the other hand, we have another very common mistake when shopping: not eating before leaving home. while you go grocery shopping while you’re hungry, you’ll naturally buy something to “snack” on and end up spending more money than you planned for the month.
At first glance it may seem harmless, but it is an unnecessary expense that can be easily avoided.
Set a monthly budget
This point is intrinsically linked to the previous one. Planning your monthly expenses and writing down all your spending is a great strategy to understand where you can save.
Making an Excel spreadsheet containing your “obligatory costs”—such as your mortgage, energy, water, and internet—is a good place to start. Once you’ve listed all of your additional costs—like eating out, shopping for new clothing, etc.—you should be able to estimate what your monthly spending will be.
Ultimately, examine your consumption with mindfulness and you’ll be astonished at the number of options available to you for putting some money away at the end of each month. It is important to adhere to the monthly budget that you set for yourself in order to benefit from your hard work.
Have you heard of the 50/30/20 rule?
A good way to help you figure out your family budget is to use the 50/30/20 rule. This formula suggests dividing your monthly expenses into three parts :
- 50% of the monthly budget should correspond to fixed expenses , as mentioned previously: rent, water and electricity bills, food and transport costs, etc.
- 30% can be used for superfluous expenses , such as travel, eating out and buying new clothes.
- 20% of the amount should be used to pay off existing debts or build up an emergency fund . This way, you are always prepared for possible setbacks in the future.
You may use this strategy to find out whether you are spending too much on non-essential items or if you usually spend more than thirty percent of your monthly budget on them.
In this manner, you can begin cutting as soon as it’s necessary to reach your projections.
Say no to food waste
Laziness or lack of knowledge can lead us to throw away leftovers from meals that could be perfectly used later.
Take some time to plan your meals for the week to avoid wasting food and use any leftovers to take for lunch the next day.
Do you only have pasta left over, but no side dish? No problem, just add tuna or sausages and you have another simple and quick meal with zero waste .
Consider investing your savings
In times when inflation is relentless, like now, money that is “idle” starts to lose value . This happens because there is a decrease in purchasing power, so the ideal solution is to start investing your savings .
Ask your bank or research the best alternatives for you and your family. You can start by investing part of your money in a Retirement Savings Plan (PPR) or Savings Certificates, for example.
In any case, the ideal is to start with small amounts of money invested in products that guarantee greater profitability and take more risks when you gain experience.
Renegotiating may be the key
We often look at contract renegotiation as a consequence, that is, we see it as the last alternative to avoid defaulting.
However, reviewing the terms and conditions of your contracts – whether for personal loans, home loans, insurance, or internet, among others – can actually help you save a few hundred euros.
The first step is to do some research to find out about the alternatives available on the market and then contact the supplier of the contract and ask for a reassessment of the contract.
This could involve cutting services that you do not use, matching the competition’s lower prices, reviewing policy deductibles or reducing the spread, in the case of a home loan.