How To Drastically Cut Household Expenses and Budget |12 Ways
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 Published On Jun 10, 2021

In this video, we discuss how to drastically cut household expense in 12 ways. It will help you find areas that are easy to cut in your household budget. Enjoy!

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Besides these expenses, you also need to look at all your debts or loans including student loans with a special focus on your monthly repayments.

1. Analyze your income or cash inflows
Once you have all the documents you need then you can start by analyzing the easy bit which is your income. This is easy for most of us as we rely on only one source of income, i.e. salaries or wages.

If you are a businessman then it can take a bit more time depending on your customer base.

2. Analyze your expenses and repayments
Once you are done with the income you can then go to the difficult bit of analyzing your expenses. This is a bit of a headache as most of us rarely keep receipts of our purchases.

I would suggest that in this area you need to be as detailed as you can be. Summarizing too much can make it difficult to analyze where to cut.

Therefore I would suggest listing everything that you buy monthly. That is list even the smaller things like sugar, cooking oil, milk besides the bigger ones like rent.

You can also add a column that shows whether the costs are fixed or variable. The variable ones are the ones you can easily play around with during the budgeting process.

How To Drastically Cut Household Expenses and Family Budget
3. Compare Income Vs Your Expense or outflows
Once you have a picture of your income and expenses then it is time to compare the income against the expenses.

The goal is to make sure that your expenses do not exceed your expenses. Spending more than you earn is unacceptable as it has to be financed somehow.



And for most people, our over-expenditure is financed by credit card debt which is a very expensive way of financing your expenses. And if you do this every month it is only a matter of time before your debts are unaffordable.

Once you know your current financial situation, it is then time to set your financial goals which in our case is to find areas to cut drastically.

I am assuming that in this case, you fall into the category of people who are spending more than what they earn. However, even if you are not overspending the areas mentioned in the following paragraphs can help you to save money.

Related Posts: What Is The Best Way To Pay Credit Cards Off

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4. Prepare a budget for the following months
There is no better way to manage your personal finances than through a family or personal budget. It is a must for corporations and organizations and should be a must for you too. It can heal you save money.

A budget will add focus to your efforts to cut household expenses. You can through a budget see to it that all the things you need are taken care of.

If you are not comfortable preparing a budget on paper or a computer spreadsheet you can use various budgeting apps that are available nowadays.

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