The Best Way To Trim and Time Your Expenses
Creating A Plan
It’s really hard to plan if you’ve never once tracked your expenses. The best way to create a financial plan of any type is to look at the records of at least 3 months of expenses.
Discover the total you’re spending on food, entertainment, clothing, home goods, and transportation each month. Notice the dates on which you typically receive your paycheck and the due dates of each of your bills.
From here, you can easily see if any expenses are larger than expected and take action (It could be as simple as a phone call) to reduce them. Consider calling the utility or creditor and requesting a change in the timing of your payment due date to make cashflow throughout the month easier.
Last, add up what you considered to be “unexpected” expenses during those three months of records. Did a friend’s birthday catch you by surprise? Did you have a home repair? Were you invited to a seemingly obligatory get-together every other week?
By adding up the total of those unexpected expenses, you can predict that something similar will occur within the next 3 months. Take what was unknown and create a budget line item for pop-up expenses. This is called a sinking fund. You’re setting aside money that you expect to spend to cover those “unexpected” events.
Purchase In-Season Goods
Other ways to time expenses beyond the budget and due dates have to do with the changing weather. Certain items you want to buy when they are IN season and others you want to buy when they are about to go OUT of season.
Fresh fruit and vegetables are low-cost grocery items (cheaper than many processed foods) that you should buy when they are in season, ripe, and plentiful. They will be more expensive in 6 months IF you can even find them.
Look up the dates for your favorite retailer’s year end or mid-year sales. If you’re planning to re-decorate the living room, for example, you could save hundreds by waiting to purchase a new sofa during a mid-year sale instead of rushing out this upcoming weekend. This same philosophy goes for clothing and luxury goods.
Some stores discount old stock the day prior to the arrival of new stock. Ask your favorite store’s manager what their schedule is as far as marking clearance items and receiving new shipments.
Catch the End-of-Season Sale
Sometimes you want to purchase items just as a season is ending. This works well for clothing, school supplies, and even new vehicles. For example, the best time to buy electrical items or home deco’s is when it’s close to new year or Christmas, when most of the retailors are offering attractive discounts or credit card offers.
Vehicle retailers typically begin to discount the current year’s models at the later part of the year because they are getting ready to restock the whole dealership with the next years’ model. If you’re in the market for a new vehicle, you may want to monitor when the new model arrives in order to get the best deal. Same goes with mobile phones. When the newest version of a mobile phone brand is about to get released, retailors offer the old versions at a discounted price.
All in all, you must be aware that it’s nearly impossible to trim every expense. We all spend money, and life is a little more enjoyable when we spend on things that are important to us and that bring happiness, excitement, and fulfillment into our lives.
If we focus on optimizing the expenses that we do have by timing shopping trips with seasons or with sales and creating sinking funds so that unexpected expenses become expected, our financial lives will be more cashflow positive, and therefore enjoyable.