We at B&J in Houston love to discuss expert bookkeeping tips. In addition to these expert tips, we also like to get back to bookkeeping basics. Today’s entry discusses expenses that are draining your wallet along with strategies to find and eliminate them. This includes costs that are no longer needed and are without a purpose. If you are constantly spending on one or more items just by going through the motions, then it should be reconsidered. Simply put, these expenses are causing dollars that could be greatly useful to drain out of your assets without returning any value. Read below for our 5 strategies for cutting expenses.
1. Review It
One cannot know which expenses to cut if they are unaware. A good bookkeeping basic is to make a list of all reoccurring expenses. These include everything from your mortgage to cellphones to cable and beyond. Look through all your active credit cards and bank accounts to find these. Even your Paypal account may be at risk for one of these expenses. Do not only look at your favorite means of paying, because it doesn’t mean you will find all your expenses.
2. Identify and Remember
A certain percentage of these expenses may be clear as day. You will be able to identify what they are and how much you should be paying. A good example is a mortgage paid with a direct deposit option. Other expenses may not be so simple. If you don’t recognize a charge right away, make a note. Do this until the list of expenses is complete. All identified expenses should be justified. All unidentified expenses should be identified, then justified.
3. Cut Expenses on Must Have Items
Of course everyone needs a mortgage, water, power, etc. But did you know you don’t have to pay a set amount? Mortgages can be refinanced and can save you tons. Bookkeeping basics tell us that this option is best for homeowners who plan to stay in their home for at least five years. There is even a website that is dedicated to cutting your most sacred bills, such as cellphone and cable. Check out Cut My Bills to see how. All you need to do is upload a few bills to get started.
4. Cut Expenses Entirely
Services you don’t use but are getting bills for regularly are a no brainer in regards to cancellation. You may even be able to get a retroactive discount by calling the provider and telling them you were unaware you were being charged. Many of these types of charges can be acquired via a free initial trial. Once the period expires, you could see expenses showing up. A few typical examples include premium cable, subscriptions to magazines, subscriptions to streaming services, anti-virus programs and other computer software, cellphone add ons, and many others.
5. Cut Expenses Some
While some expenses cannot be cut entirely, some can be cut down. One such example is your grocery bill. Have a look at the last few receipts if possible to see what was bought. Now look in your fridge and pantry. If the item(s) are still there after a few weeks, were they worth it? According to the EPA, the average American family of four wastes $1,600 in unused or spoiled groceries. That comes down to $400 per person, although we suspect the average adult wastes more than children. Apply this strategy to any other qualifying expenses.
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