With the country’s economy in shambles and no improvement in near sight, almost everyone (even the ultrarich) are feeling the pinch. Goods and services are more expensive than ever, with the value of money having dipped to all-time-lows. Restrictions on purchases and imports are making it harder than ever for manufacturers and other businesses like dropshippers and other consumer goods’ retailers. Vehicle prices and fuel prices have soared, with imports on vehicles and spare parts being heavily regulated. As individuals, there is not much we can do except prepare to ride out the storm as well as any eventuality that might occur. This might include divesting from volatile investments and storing your money in more secure assets like property or gold, rather than in cash. Additionally, one of the best things to do at this time is to reduce your monthly expenses.
Why should I reduce my monthly expenses?
In light of the recent global economic conditions, there are many reasons why reducing your monthly expenses is now more critical than ever.
There is no guarantee what will happen to your income in the near future; as businesses become less profitable due to a myriad of reasons, you might find yourself receiving a reduced paycheck. If you have extra money in the bank, that will help things substantially.
Change your lifestyle
As the country faces a lot of shortages in goods as well as hikes in the exchange rate, reducing your monthly expenses will help you to adjust your lifestyle to the new normal. By limiting how much you spend, you will not feel the restrictions around you as much.
How can I reduce my monthly expenses?
Once you have decided that you need to reduce your monthly expenses, now comes the hard part. Reducing your monthly expenses is far easier said than done, especially when most of us need to borrow cash simply to pay our utility bills. That being said, there are a few easy ways to reduce your monthly expenses here and there with minimal effort.
Here are some tips to reduce your monthly expenses without much effort:
Save Electricity: Initiate a Lights Out policy
You’d be surprised at just how much we waste electricity at home. Be it overusing air conditioners, keeping nighttime light bulbs switched on during the daytime or forgetting to switch off heating appliances like irons or hair curlers, you can probably cut down at least a thousand rupees each month by paying attention to the little things. By initiating minor household rules such as a strict lights out policy between 10pm and 6.30pm, you can save a substantial amount on utility bills annually. If you can afford to invest in long-term energy-saving initiatives like switching to solar power or even just more energy-efficient appliances, it might be worthwhile looking into. Even if you need to borrow cash to do so, the money that you save in the long-run might offset any interest costs.
Relook at Your Subscriptions
You are most likely doling out several thousand rupees each month for various fixed-cost bills such as for music, video streaming services, online storage or even for games. Just a few years ago, we were able to live without a single one of these services and you can continue to do so by switching to free alternatives. Rather than Netflix or Hulu, try free movie streaming or downloading websites. Switch to YouTube for your music fix rather than paying for Spotify or Apple Music each month. Even downgrading your internet package might make a world of difference in the long run. All these initiatives can also greatly help you disconnect from the internet and spend more time in the real world with your loved ones.
Manage Your Debts
While borrowing money is nearly unavoidable in this day and age, the high interests of regular borrowing might be deeply eating away at your income. Even though a quick online loan from a lender like OnCredit.lk isn’t the end of the world when you need cash fast, if you delay paying it back on time you will be paying unnecessary penalty fees and late payment surcharges. Credit cards can be a highly useful mechanism of managing your expenses and saving some money, interest on unpaid bills are brutal and can easily snowball into a mountain of debt. If you have high-interest debts that are racking up an increasing amount of interest, it might be better to get cash now and settle the entirety of the debt at a lower interest rate. Debt management is critical to reducing your overall payables.
Reducing your monthly expenses will have a world of benefits in many different ways. While it might be easier for some people to naturally cut down on waste and excess, it might not be as easy for the rest of us who struggle to meet even our most basic of expenses. Everyone’s financial situation is unique and make sure you do what is best for you and your family.