10 Ways to cut back expenses

"Every man is free to rise as far as he is able or willing, but it's only the degree to which he thinks that determines the degree to which he'll rise"

Ayn Rand

Welcome to The Golden Sense!  At the start of the year many people often try to rearrange their finances and start the year off in an organized manner. December is typically a very busy and costly month due to the holidays. As the New Year begins it is important to get started on the right foot and not blow your money on unnecessary expenses. Cutting expenses is tough because it requires an alteration in your habits and actions. There are many times in people's lives when they have to cut expenses, either permanently or temporarily in order to save money.

The first thing to do is to determine where you spend your money. If you don’t know where your money is going, you are most likely spending too much. You can get a solid idea in as little as one month and as you continue, you’ll see patterns develop that you can address. Keep track of everything you buy down to the last dollar. Don’t stop at the obvious things like rent, utilities, gasoline and food – include the ancillary items like sodas and snacks as well as gum or tobacco. Use an excel spreadsheet or other software to keep track of every month. If you exclusively use a debit card for your purchases, the bank will do this for you.

Most likely you will be surprised to find out where you are spending your money. Even if nothing jumps out at you, there are still ways to reduce your spending. It is important to become efficient with your money and finances. This will allow you to grow your wealth rather than squander it. Consider the following ways to alter your spending.

EschCollection/Getty ImagesWH

Skip the Convenience Store:
Convenience stores often have higher prices than grocery stores. One study showed that supermarkets came in a whopping 45 percent cheaper on the exact same items! That's saving more than $2,300 per year if you spend at least $100 on groceries each week.

Walk to work:
If you live close enough to walk to work, you'll not only get free exercise, but also save a tremendous amount of money. Based on AAA data, the typical U.S. work commute by car costs about $4,000 per year. If you were able to invest that at a 5 percent rate of return, by the end of a 40-year career you'd have a retirement nest egg of $535,519.01 — and a terrific pair of legs!

Eating out too much:

Brown-bag your lunch every day at work or go home to eat. You can easily save $25 per week. That's a savings of about $1,300 per year, or more than $50,000 over a 40-year career!

Cut Down on Entertainment:
It’s astounding how many people complain about money, then describe the latest release of a movie along with the cost of theater popcorn. Also, professional sports event, a music concert, or tickets to a play can run hundreds of dollars for a couple on a date. Seriously, can you really tell the difference (blindfolded) between a $30 bottle of wine and a $15 bottle of wine? When you do dine out, actually think about the prices on the menu.

Financial services:
Are you paying a monthly service fee to have a checking account? You don’t have to; you can find a lot of options on the Internet and in your community. Are you paying an annual fee for your credit card? Are you getting substantial value out of paying that fee? If not, cancel that card and use one that doesn’t charge an annual fee. If you need cash only use ATMs where you won't be charged service fees. Go inside your personal bank and make a withdrawal from the teller. These are easy ways to avoid being "nickel and dimed" for access to your own money. 

Be a smart grocery shopper:
Cut coupons, shop at discount stores, and stock up on sale items. Check out Costco or Sam's Club. Trader Joe's has a few good deals as well.

Communications:
We all own cell phones and we are all forced to pay for some particular type of plan. Consider reviewing your plan and ask your carrier if there are other plans not advertised that better fit your needs and budget. Many people often pay $10 to $20 a month extra for services they don't use. 

Coffee:

Make your own coffee. Cut back on trips to Starbucks or other premium coffee shops.

Credit Card Rewards Points:

If you have a credit card with rewards points, use them. But use them wisely. Keep in mind that credit card companies offer points to induce you spend more. So don't pay more (by racking up interest or fees) in order to get rewards points. To accumulate points faster, concentrate your spending on the one card that offers the rewards you will use rather than spreading your spending among several cards. 

Saving rewards points for your dream vacation or another splurge runs the risk of the points expiring or never being used. Using points on a regular basis helps you cut your monthly expenses. Consider using rewards systems that pay cash or offer gift cards that you will actually use.

Wash your own car:
Car washes can cost you anywhere from $10 to $100 depending on how spiffy you want your vehicle to look. If you break out the bucket and soap yourself you can often do just as good a job and not have to pay top dollar for it. 


It is important not to be frustrated when you realize you need to save more money. It is natural not to want to worry about expenses. At some point in time it is necessary for everyone to cut back in one way or the other. It is often the only way to move forward. Everyone needs to review their spending habits on a consistent basis.

As Benjamin Franklin said:

"Beware of small expenses. A small leak can sink a great ship"



Sincerely,

T.Norman





The super bowl is coming up. The 49-ers versus the Ravens. Turns out scammers are out in full force this year as one California couple found out. They spent $5,900 for tickets online and all they got was a FedEx envelope with a note in side that read: 

"Enjoy the game!!!! Go Ravens!!! LOL."

Ouch...looks like some Raven fans are now being investigated for fraud.


Did you hear about the uproar caused by specialty grocery store chain Traders Joe’s last week? They announced that for some stores, the price for the company’s famous “Two Buck Chuck” (Charles Shaw wine) would go from $1.99 per bottle to $2.49. Customers jumped to the airwaves, renaming the wine “Inflation Chuck” or “Upchuck.” It goes to show you that inflation is creeping up in all areas.


In a recent Casey Daily Dispatch Jeff Clark wrote:

"You've likely heard that the German central bank announced it will begin withdrawing part of its massive gold holdings from the United States as well as all its holdings from France. By 2020, Bundesbank says it wants half its gold reserves stored in its own vault in Germany.

...the quote that reveals the ultimate, backstop reason for the move: Bundesbank stated it is a "pre-emptive" measure "in case of a currency crisis."

Germany's central bank thinks a currency crisis is really possible. That's a very sobering fact.

We agree, of course: history is very clear on this. No fiat currency has lasted forever. Eventually they all fail. Whether the dollar goes to zero or merely becomes a second-class currency in the global arena, the root cause for failure is universal and inevitable: continual and perpetual dilution of the currency."

I recently saw this on Dow Theory Letters and thought it was funny and true.


TOP-10 "ONLY IN AMERICA" OBSERVATIONS - BY A CANADIAN*

1) Only in America could the rich people - who pay 86% of all income taxes - be accused of not paying their "fair share" by people who don't pay any income taxes at all.

2) Only in America could people claim that the government still discriminates against black Americans when they have a black President, a black Attorney General, and roughly 18% of the federal work-force is black while only 12% of the population is black.

3) Only in America could they have had the two people most responsible for our tax code, Timothy Geithner, the head of the Treasury Department and Charles Rangel who once ran the Ways and Means Committee, BOTH turn out to be tax cheats who are in favor of higher taxes.

4) Only in America can they have terrorists kill people in the name of Allah and have the media primarily react by fretting that Muslims might be harmed by the backlash.

5) Only in America would they make people who want to legally become American citizens wait for years in their home countries and pay tens of thousands of dollars for the privilege while we discuss letting anyone who sneaks into the country illegally just 'magically' become American citizens.

6) Only in America could the people who believe in balancing the budget and sticking by the country's Constitution be thought of as "extremists."

7) Only in America could you need to present a driver's license to cash a check or buy alcohol, but not to vote.

8) Only in America could people demand the government investigate whether oil companies are gouging the public because the price of gas went up when the return on equity invested in a major U.S. oil company (Marathon Oil) is less than half of a company making tennis shoes (Nike).

9) Only in America could the government collect more tax dollars from the people than any nation in recorded history, still spend a Trillion dollars more than it has per year - for total spending of $7-Million PER MINUTE, and complain that it doesn't have nearly enough money.

10) Only in America could politicians talk about the greed of the rich at a $35,000.00 a plate campaign fund-raising event.

References:

http://www.womansday.com/life/saving-money/10-easy-ways-to-cut-your-household-budget-77381

http://workathomemoms.about.com/od/finances/tp/cutmonthlybudget.htm

http://www.dummies.com/how-to/content/how-to-cut-back-on-unrequired-expenses.html


http://www.aarp.org/money/budgeting-saving/info-10-2012/simple-ways-to-cut-expenses.html#slid

http://www.wikihow.com/Reduce-Expenses