Like countless methods to start a diet, there are also a wide variety of strategies to start cutting back on spending.
According to blogger Frugalwoods, who are interested in changing their consumption habits and improving their spending structure, they should start with a month of “mowing” down on their spending. The argument behind this method is that after a month of extreme reduction there will be no return to the previous level of expenditure and it will be possible to examine consumption habits more clearly and it will be easier to change them. In fact, through a month of “back to basics,” the cycle of wasteful lifestyle will be cut off and the way to a new and much more economical spending profile will be opened.
The purpose of the month of extreme savings is to push the limits, to overwhelm emotions. There is also a chance that the conduct during the month will cause great frustration. However, alongside these difficult feelings, the financial understanding will be expanded and the saver will pay more attention to his day-to-day conduct.
Successful frugality means giving up short-term spending in order to achieve long-term goals. A reduction in expenses is often interpreted as a shortage, as stinginess, as a decline and as a negative impact on the standard of living, but it is also possible to look at the issue in a different way. Saving is also liberation, liberation from the need for a lot of money, liberation from the endless pursuit of shopping and uncontrolled and aimless consumerism.
If the method of a month of extreme reduction speaks to you or if you want to learn where you can really cut back, then the following ten points may help you get the job done.
Goal setting
What is the purpose for which you want to cut expenses? How much money do you want to save this month?
Goal Setting Questions:
- Why do you want to start a month of extreme frugality?
- What do you hope to achieve after such a month?
- What in your current lifestyle prevents you from achieving these goals and what can you do about it?
Read more about: How to set an economic goal
Overview of past month’s expenses
We can’t move forward if we don’t know where we came from… It is not possible to build a plan to reduce expenses if their scope is not clear. Therefore, write down all your expenses in the last month and for each expense were categorized: fixed expenses which are mandatory; Expenses for which consideration can be exercised whether to spend. When conducting the review of past expenses, do not despair. Remember that the goal is to improve and not to agonize over wrong financial decisions taken.
Mandatory fixed expenses
Fixed mandatory expenses are expenses such as: rent or mortgage, municipal taxes, payments of fixed debts and insurance. That doesn’t mean you can’t change the amounts of these expenses in the future, but right now they’re stable expenses that can’t be easily changed in the savings month.
Expenses that can be considered if they are necessary
All other expenses fall into this category. That’s where our money goes. On expenses that fall into this category, we will focus on the month of savings.
What can be completely dispensed with?
Now that expenses are sorted between fixed and those that can be considered if they are necessary, we are challenged with another question: What expenses can be completely erased? Expenses that can be completely waived can include, for example: restaurant meals, pedicures, dog grooming, cables and anything else that does not involve survival. Remember that we are going to waive all these expenses in the next month alone, and this is actually the gateway to an economical lifestyle. On the giving up side, it’s important to go back and remember what goals you set for yourself for the month of savings.
This is a good and appropriate time to ask what can you stop doing and stop consuming? All of us in life have actions that we do that seem to us to be things we must do or things that improve our quality of life. Many times these habits are weights and millstones on our necks.
For example, in the month of savings, we might think about how we can watch our favorite cable TV show without paying for cable (spending on cables is an expense that we stop at during the month of frugality). One option is to think about where we can watch the show, but another option is to give up watching the shows altogether. What do you foresee causing such a concession? What can you do with time instead of watching TV?
The Art of Finding the Cheapest Replacement
It hurts to give up things we love to do altogether, so for the things we have defined that we don’t want to give up completely, we need to find how we can continue to consume them at a lower cost.
An example of such an expense is spending for a sports class. Of course, sports should not be given up, but you can find ways to do sports free of charge: cycling to the workplace, online yoga course and self-practice, organizing a running group in the community, etc.
Read more about: How to exercise cheaply
Another expense that many of us spend regularly is buying coffee at a coffee shop. A more economical alternative is to prepare the coffee at home in a home machine, which can sometimes even be obtained free of charge when purchasing capsules.
Reduce expenses where discretion can be exercised
There are expenses that we need to spend regularly, but the amount of expenditure can be reduced. For example, buying groceries is essential for our livelihood, but buying expensive foodstuffs is not necessary.
Another significant expense is the expenditure on clothing. Quite a few clothing items and fashion accessories are not a need for us but a source of pleasure and renewal. It is possible to space the “replenishment” times of the clothing stock and not change every season. You can buy clothes that can be used for several seasons and for several years – the choices may be less fashionable, but the savings will be significant.
Do it yourself
Another good place to save money is to give up various services that we buy. Many of the actions can be done independently, for example: gardening, cleaning the house, performing repairs and maintenance at home.
Checking habits
Spending money is a habit and as such can be changed. A month of saving is a great opportunity to look at daily habits and how they affect spending structure, and then thinking about changing habits will help permanently reduce spending.
Examples: For those who are used to buying coffee on the way to work, make coffee at home this month and take it to work. Do you think your fuel costs are high? See which rides can be consolidated into a single ride and what collaborative solutions can be implemented instead. Does the water bill seem excessive to you? Check and shorten your shower time and be sure to operate full washing machines.
Long-term planning
Many expenses can be reduced with precise long-term planning. You know your own and your family’s needs very well. Plan ahead for commitments and schedules and save.
For example, you plan to go on a trip, plan your picnic, and avoid a meal at a restaurant. You went out with the children for an afternoon activity, which you know will last until dinner time, take food with you in advance for them. At home, teenagers who are always hungry, even at night, prepare food for them in the freezer for the hours of hunger and then they can simply take out and heat instead of ordering food outside.
Buy cheap
Compare the prices of groceries you buy regularly. Take the time to compare prices before buying weekly, split your purchase by deals. Buy what you can at thrift stores. {Maybe add a purchase only with an accurate and detailed shopping list, including quantities}
Bought it? Use what you bought. Sounds simple, but before you buy, use the inventory you’ve bought before.
Read more about: Smart shopping at the supermarket
No excuses
While reading the principles of savings, thoughts of resistance must have crossed your mind: why it is not suitable, how it is actually different with us, and how it will help us reduce expenses. The goal of Spending Reduction Month is to build new habits, and this is not a simple and easy task.
Changing consumption habits and behavior is essentially not financial but psychological. The way we use money is heavily influenced by emotional components. You can find many reasons why you can’t cut expenses and you can sit down and think again, and think again, about each of the excuses and see if you really can’t make a difference.
