Without further adieu, here is the second instalment of the 10% Debt Challenge. While you may remember the post for part 1 discussed how to decrease your debt by increasing your debt payments, and in part 2, here we will be looking at lowering your debt, by reducing your spending also by 10%.
It is certainly true that getting rid of debt can be a really difficult process. However with some steps and methods of working towards this goal, you can achieve success in this respect. While you will still be looking to increase your payments, now by also reducing how much you spend – together these strategies work in tandem to help you improve your overall financial outlook.
Here are some elements that you can can look to include in this step of your own personal 10% debt challenge.
Create a Monthly Spending Plan
Perhaps the best place to start when it comes to reducing your spending is to go back and look at your current budget. If you are new to the budgeting world, it is important to know that this is a major part of the financial process, often dictating how successfully you are able to manage your overall spending.
In the beginning, you will want to take a look at your total income as well as the total amount you are currently spending towards all of your expenses. With insight into these values, you can look to rework your budget based on your current incoming funds, as well as how much you can save each month.
In order to be successful and to be able to start reducing your spending, your new budget should now reflect a more realistic monthly spending plan. An initial review of your budget, followed by a new and improved one should do the trick.
Cut Down on your Current Expenses
As you are creating your new spending plan, you will also want to look closely at the current areas you are spending money on. This part of the process will be unique to everyone as we all have our own expenses to contend with. However, it is also a commonality that most people can find certain expenses they can do without. Therefore, at this stage you will see what items you currently spend money on, and how often.
If for example, you typically buy these items or use certain services on a monthly basis, perhaps you can look to only buy them every other month or every few months for that matter. Better yet, are there purchases you can eliminate all together?
Here are a few suggestions for how you can reduce your spending each month by cutting out certain expenses.
Pack your own lunch: here you can save money by preparing your own meals to take to work or with you where you are out for the day. If you think about it, if you are out 5 or more days a week and are buying lunch each of these days, you can be spending close to $50 – 100 per week, depending on where you are eating. By packing your own lunch, however you can reduce your weekly and monthly spending by several hundreds of dollars – give or take. You are likely spending money on groceries as well too, so why not put these purchases to good use each week.
Make your own coffee: another method of reducing your spending each month is to look at how much you spend in a week or a month on your morning caffeine beverages alone. Instead opt for brewing your own in the morning and save a bit extra money each and every day. With the fast brewing Keurig and Tassimo coffee machines available, you can prepare your morning coffee practically in an instant, pop it into a travel mug and be out the door in no time.
Buy less alcohol: regardless of whether you are buying alcohol at home or at a bar/restaurant setting, it is not unrealistic to except this to add up. While drinking at home means you don’t have to pay extra in the way of tips and bar tax, buying from the liquor or beer store each week is likely to still take up a portion of your expenses.
With that being said, individuals must prioritize where they can best save and reduce their own spending – although if you do want to look to reduce your spending this month – buying less alcohol can be a possible solution.
In the end, by even cutting down on a few of these items you can certainly work towards lowering the cost of your monthly spending by 10%. While certain expenses are likely to be fixed and ones you cannot cut out at all, for example, personal loans, credit cards, rent or mortgage payments, instead then take a look at the next method of reducing your monthly spending as it may be more feasible.
Shop More Inexpensively
While this final category does tie in with the above mentioned topic, it is worth discussing in its own category as this may be a more realistic way to go about reducing your spending, instead of or in addition to cutting out certain expenses altogether.
Some examples of being able to shop more inexpensively can include such methods as, waiting until items go on sale, buying certain items in bulk, as well as using coupons, discount cards, etc. to help reduce your monthly shopping costs.
Also if possible, you may also look at switching to a different grocery store altogether. While it may in fact be more convenient to shop at a grocer location right by your house, sometimes this can also mean that you are paying more due to the nature of the store itself. Therefore, you might consider checking out another store a little further away, however items are more reasonably priced. Here you may just find the amount of money you save in grocery shopping alone can offset the fact that you have to travel just a little further to that store.
All in all, you can see that there are many opportunities to save some extra money here and there each month. If you are taking part in this debt challenge and looking to lower your spending by 10% or more, consider these ideas as well as others you may find are a good fit for yourself and your lifestyle needs.
Stay tuned until next month, when part 3 of the 10% Debt Challenge will continue.