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8 Ways to Cut your Expenses

IndianMoney.com Research Team | Posted On Tuesday, January 28,2020, 04:39 PM

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8 Ways to Cut your Expenses

 

 

Young professionals with low to moderate-income are often faced with the challenges of saving money and managing their personal finances. One of the best ways to sustain and save money is by drastically reducing the monthly expenditures. Here are a few effective ways to cut expenses without affective your lifestyle much:

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8 Ways to Cut Your Expenses

Cut Cable TV Subscriptions:

Previously cable connection was cheap and thus everyone preferred to subscribe to the cable network. However, the changes implemented in DTH services have made cable connection costlier. Chances are that you are probably spending more money on these subscriptions and you are not reaping a lot of value from them. Thus, if you are working and you hardly have time to watch television, you can cut your cable connection and save at least Rs. 1000/month. You may also turn to cheaper alternatives like Hotstar or Amazon Prime as they cost much lesser than DTH.

See Also: 7 Steps for Financial Planning for Young Adults

Know the Cost What You Eat:

We often prefer to grab an easy meal after a long day of work. In this process, we often end up spending extra bucks that can create a dent in our budget. It is estimated that average working professionals spend Rs. 3000 to Rs. 5000 a month on meals on workdays.

To reduce your food expenses you can start out with the habit of cooking twice a week. If you eat out very often then you can slowly proceed to prepare food thrice a week. Also learn to prepare quick meals and carry lunch boxes to work. Cutting out food expenses can go a long way. It may eventually help you save thousands a year.

Consolidate Your Debt with Lower Interest Rates:

On average, nearly every household in major cities is bearing some of the other EMI. The majority of city dwellers carry loans like car loans or home loans once in their life. Sometimes young professionals are also burdened with credit card debts.  To make your life easier the first step you must take is to eliminate your existing debt. Consolidate your debts under a low-cost personal loan and repay it as per your monthly income. Stay on a budget and save as much as possible.  Also, make sure not to acquire new debt before closing the existing one.

See Also: Basics of Financial Planning

Reduce Unwanted Purchases:

It is important to stop buying things on an impulse if you want to minimize your expenses. Make sure to create a monthly budget of your expenses and allot money for necessary expenses like grocery, utility bills, rent or EMI. Unnecessary expenses don’t include spends that can help you break the monotony like watching movies or eating out. Rather unnecessary expenses include splurging money in expensive dine-outs, spending on game arenas or sports and excessive shopping. Controlling your urge to spend money is an effective way to drastically reduce expenses.

Reduce Your Electricity Bill:

One of the basic ways to save money is to look for avenues where you can save some extra bucks. Energy wastage is one such avenue. Most of the time we end up paying more money on basic necessities like electricity bills or water bills due to excessive usage. Some of the basic ways in which you can save money on electricity is buying appliances that consume less energy, use low flow fixtures, consider using energy-efficient lights and bulbs, switch off the lights and fans when you are not in that particular room. You can also unplug your appliances when you are not using them.

See Also: Why Women Need to do Financial Planning?

Quit Smoking:

Consumable habits, like smoking, can be a constant drain on your budget. Reducing such habits will not only help you cut expenses but will also help you in the long run. On average, if a smoker smokes a pack of cigarettes daily than it can cost him Rs. 75 a day. Thus it gives a monthly expense of Rs 2250 per month. Not only it creates a dent in your budget, but it will also cause you inconveniences in the future. Your health and term insurance will cost more due to the terms related to smokers. It may also result in severe diseases that may drain your finances in the future.

Compare and Buy Insurance:

Sometimes insurance products like term and health insurance can drain your money if you purchase a policy without understanding it properly. Thus it is important to compare products and buy them based on your needs. Mis-selling of insurance products is quite rampant in the insurance industry and it takes determination for customers to figure out the confusing charges. Here are a few tips that can help you:

  • Stop buying insurance from agents. Chances are that you will be misguided to buy a product that doesn’t suit your requirements or end up buying unwanted products along with the main product
  • Compare policies online and evaluate their features
  • Buy policies online as they are cheaper than the offline ones.
  • Read fine prints in the policy documents and find out the hidden charges
  • Purchase insurance as per your insurance requirements

See Also: Financial Planning for Newly Married

Travel Less:

People living far from their families; spend a huge sum of money on travel. To save as much as possible we can cut down on the amount of travel or look for alternatives like booking flight tickets at cheaper rates.

Another way to save money is by reducing your transportation expenses. If you travel daily to work on your own vehicle then think twice. Sharing transport can help you save good money. You can either carpool or use public transport to save money to reduce your transportation charges. You can also opt to greener resources like electric vehicle or cycle if your home is at a small distance from your office.

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