How to reduce expenses

An important way to save money is to reduce expenses. There are many of ways you can stretch your ringgit to avoid that "too much month at the end of the money" feeling. Some of these steps will take a bit of planning and investigation but they will be well worth the effort. Your ability to implement those will depend on available cash and your budget.

What you will need first, is a clear idea of where your money is going, then you can look at ways to cut fluff and lower the cost of your required living expenses. Always keep in mind that it's not just about cheaper, it's about efficiency. Understand that reducing expenses is a lifestyle change and a change in your thinking pattern.

1. 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 will see patterns develop that you can address. Write down everything you buy down to the last ringgit. Don't stop at the obvious things like rental, utilities, gasoline and food. Include ancillary items like drinks, snacks, as well as gum or cigarettes.

2. Address your utilities.

* Electricity.

Lighting is expensive. When you leave a room, turn off the lights. Energy efficient bulbs really work. This is an investment that will pay off over time but there is a significant savings to be gained. Turn off your computeror laptop when you are not using it. Any voltage adapters (including stereo components) still use electricity even if they are not charging or plugged in to the device.

* Water.

Save water, save money. Invest in a shower-reduction-kit - they cost nearly nothing and will start saving your money immediately. They work by reducing the flow to the shower head and the change is barely noticeable. Repair leaky toilets and faucets - this is an enormous waste of water and easy to fix.

* Cable and Telephone.

Do you really need a 100 channels and every single premium channel available including the high definition packages? You can save the cable bill every month by watching TV for free online. For your telephone, if you make a lot of long-distance calls to family and friends use services such as Skype, Gtalk (from Google), and Windows Live! which allow you to make free calls from your computer.

* Mobile phone saving plans.

Some mobile phone plans are genuinely good and money saving, but make sure that you shop around first for the deal that best suits you. Many companies offer either contract or plans based on the cellphone habits of the user.

* Reconsider petrol and miscellaneous auto.

Make a list before you go to the store so you don't have to make additional trips. Don't go for a drive for pleasure - walk instead, or choose other forms of entertainment. Check the pressure in your tires. A poorly running engine is huge waste - even a spark plug change can make a big difference, as can clean oil.

Also, the less you drive the less frequently you will change tires, oil, require maintenance, etc. That's saving-over-time. Another way to save gas and money is to change your driving habits. By simply driving more slowly or less aggressively, you can save significant amount of money.

3. Cut down on entertainment.

It's astounding how many people complain about money than 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 to hundreds of ringgit for a couple on a date. When you do dine out, think about the prices on the menu first.

4. Address your insurance costs.

The fastest way for some people to reduce monthly expenses is in the area of health, auto, and life insurance. Companies that sell those are very competitive. Get some bids from different companies. When you do this, bear in mind that lower initial premiums will not always be the most cost efficient!

5. Consider pre-owned items.

This is a great way to save significant amounts of money while recycling! If you absolutely must buy something, there are options other than a mall anchor store, or a superstore. There are large thrift stores that have some incredible bargains on everything from home knickknacks to appliances, to clothing. There are online sites that often have bargains (like Craigslist.org, Overstock.com and eBay.com).

6. Actively manage your credit.

A poor credit score costs tens of thousands over the years in increased interest rates and insurance costs. Pay all bills on time or early. Pay off revolving debt (credit cards) and put those cards away.

7. Avoid overdraft on debit card.

An overdraft may seem like a good idea. Even if the bank you are with doesn't charge you for using the overdraft, they will definitely charge you if you even toe the line over it. Consolidate loans to the cheapest one while paying off the debt.

Taken from: News Straits Times - 15 September 2012 (article), Google (images).