Your expenses hold the key to how well you do when dollars are scarce. If your family does not follow a spending plan, this is the time to start. Family input is essential, as is being realistic and flexible (Spending Plan Worksheet available on Page 4).
You should separate your family living expenses into fixed, flexible and occasional expenses. Fixed expenses are expenses that you pay every month and the amount does not change. They include things such as mortgage/rent, installment credit and insurance. Flexible expenses include those you pay every month but the amount changes. Examples of flexible expenses include groceries, gas, utilities and entertainment. Finally, occasional expenses are those that do not occur every month. Don’t forget to come up with a list of these occasional expenses so they don’t throw your monthly spending off.
Flexible expenses are the easiest for families to examine and make changes. Be creative in how to cut expenses. Remember, you still want to live comfortably. Here are some suggestions for cutting flexible expenses:
- Agree to discuss purchases over a certain amount with your family members before buying.
- Control impulse buying. Make a shopping list and stick to it when in the store.
- Comparison shop. Purchase items on sale or buy in bulk.
- Avoid waste; conserve your resources. Don’t throw food away; have a leftover night or freeze uneaten foods. Bring food from home for lunch.
- Buy produce in season. Buy other things out of season. Use free or low-cost community services to substitute for entertainment costs.
- Avoid buying things on credit. The interest expense will make the item you purchase cost more in the long run.
- Do not drop insurance coverage. The need for insurance is magnified by the stress you may be experiencing. However, make sure you are not paying for duplicate coverage by having several policies.
- Do not cancel essential medical and dental appointments. In the long run, such inaction may prove to be more costly. Many professionals are willing to negotiate the payments if details are worked out in advance.