You can effectively reduce your monthly expenses fast if you can control your monthly expenses and stick to a family budget. You can’t control over monthly expenses unless you have basic knowledge on personal finance management. In this article, you are going to learn how can you reduce your monthly expenses fast.
4 Effective ways you can reduce your monthly expenses fast
1st Step: Setup financial goal to reduce monthly expenses fast
To reduce monthly expenses fast, at first you should setup your financial goal. Then, define your monthly expenses. Setup financial plan on the basis of your monthly income and expenses. Your current income and current expenses are the main factors to setup actual plan. Then, fixed time limit to achieve your goal.
2nd Step: Design a saving plan to control monthly expenses
Secondly, you should have a monthly saving plan from current income. Initially, try to save at least 10% to 15% of your current monthly salary. Without monthly saving plan, you will not able to control your monthly expenses.
If your current income is 1500 dollars, you have a well- defined plan to save 150 dollars to 225 dollars each month. Moreover, you can get out of debt fast if you have a specific saving plan. So, design a suitable saving plan.
Read More: how to save money for stock investment
3rd Step: Make a monthly family budget to reduce monthly expenses fast
Third essential step a monthly budget. A family budget has two main elements: Income and expenses. For a jobholder, income comes from monthly salary. So, income is fixed but expenses are unlimited. See a sample family budget in the table below.
Moreover, a family budget for the month can help you to control monthly expenses fast. In the next step, you can learn how to reduce your monthly expenses effectively.
4th Step: Follow the family budget to reduce monthly expense very fast
Top 10 regular expenses that can be Reduced
1. Control grocery expenses at least 5% to reduce monthly expenses fast
The first unavoidable expense is grocery expenses. If your current grocery expense is 40%, you should have a plan to reduce 5% of your grocery expenses. For your understanding, I imagine your income is 1500 dollars per month.
Therefore, if you can cut short 5% of your grocery expenses, you can save extra 5%. Your ultimate goal is achieving financial freedom by controlling your monthly expenses fast. If you buy all grocery goods at a time for the whole month, you can reduce monthly expense.
Moreover, it is not difficult to cut short 5% expense from your grocery expenses. You just need to follow the above monthly family budget to reduce expenses.
2. Reduced rental expense at least 5% to control monthly expenses fast
The second unavoidable expense is rental expense. Reduce your current rental expense from 35% to 30% of your targeted expense. If you live in a rental apartment, you have to allocate 20% to 35% expenses on rental apartment.
On the contrary, if you have belonged to an apartment, you can easily save at least 30% expenses. For a long-term solution, you should buy an apartment to save a mentionable expense. I think you are living a rental apartment. So, try to rent a low expensive apartment to reduce at least 5% rent expenses.
3. Reduce utility expenses from 5% to 4%
The third compulsory expense is utility expense. You can control utility expenses but can’t ignore whole utility expense. By becoming a frugal consumer, you can cut short at least 1% utility expenses.
4. Control children’s educational expenses from 5% to 3%
If you are a father, you have to allocate some income for your children’s education. I don’t suggest you to compromise your children’s future. So, I recommend you to allocate more on your children’s education. An educated mother can teach her children at home. Thus, family can reduce at least 1% to 2% educational expenses.
5. Reduce shopping expenses from 5% to 3%
Don’t buy unnecessary dresses each month. As you want to reduce monthly expenses, you should cut your shopping expenses. Buy new dressess when actually need. In this way, you can cut short shopping from 4% to nil. Moreover, you can reduce your shopping up to 2%.
6. Keep transport expenses within 2% to reduce monthly expenses fast
If you have a car, you need not pay something as transport expenses. But a car needs maintenance and fuel expenses. If you use public transport, you can reduce your transport expenses. So, follow the family budget to minimize your transport expenses.
7. Reduce medical expenses from 3% to 2%
In many developed countries, medical expenses are free of cost. But if you live in a developing country, you have to spend some money on medical expenses. You can avoid extra medical expenses if you maintain health guidelines. You can reduce medical expense 1% by maintaining proper health guidelines.
8. Expenses for guests keep within 2%
Every month, we have to allocate some money to our guests. Expenses on guests can be controlled. You want to get out of debt. So, try to reduce guests’ expenses from 2% to 1%.
9. Keep get together expenses within 2%
Do you regularly meet with your friends? I don’t say to avoid your friends and social gathering. But I suggest you to minimize your expenses. If you reduce your get together expenses for a short time, you will get a financial freedom.
10. Keep other expenses within 1%
You may keep some money for emergency use. This amount may be used or not. This totally depends on circumstances.
Finally
If you have any bad habit such as smoking, drinking, wasting, you should avoid these habits. Moreover, a gambler can’t survive in the earth happily. So, try to lead a decent life so that you can achieve financial freedom early.
Founder of The Financial Ask
