Budgeting Basics: What to Cut First From Your Budget

Starting in 2008, the United States and eventually the rest of the world experienced a drastic economic downturn. As a result, many families went from living on two incomes to living on just one. Many individuals, who were in high-paying jobs became victims of layoffs, and they were only able to find employment at lower paying jobs. For this reason, millions of families around the world are trying to figure out how to live on less money. This requires making budget and cutting things from the budget. If you are in this situation, you are probably wondering what to cut first from your budget.

Analyzing Monthly Expenses and Making Appropriate Cuts
Regular expenses make up the majority of an average households monthly budget. So a good place to start making cuts is with these expenses.

Automobiles, for example, are a source of regular monthly expenses. Every month X amount of fuel needs to purchase. Periodically maintenance work needs to be done. When they break down, vehicles need to be repaired.

Automobile expenses can be reduced by using public transportation, if it is available. By simply dropping a few coins into the public transportation system a family can drastically cut the amount of money they will spend on fuel every month.

Carpooling is another option. If there are multiple people in close proximity that need to travel to the city every single day for work, why not travel as a group. Once again, gasoline expenses are minimize and wear and tear on the vehicle is reduced.

Energy bills are another source of continual monthly expenses. The energy bill is something that every homeowner has complete control over. The more electronic devices that are used in the home, the more lights that are left on, the more windows that are left open while the air-conditioning is running, the higher the bill will be.

Energy bills can be reduced by installing compact fluorescent light bulbs. These bulbs have a longer lifespan than their counterparts and offer a savings of approximately $.66 per month per lightbulb.

Energy bills can also be reduced by unplugging electronics when they are not being used. Even if electronic device is off, when plugged in they use a small amount of electricity referred to as a phantom charge. So’s electricity use thereby cutting the expense of your electric bill from your budget.

Entertainment is probably the first place you looked when trying to decide what to cut first from your budget. There are aspects of entertainment that a person may overlook when trying to trim their budget. For example, are there club memberships and gym memberships that are not being used? Cut them out. Would it be possible to reduce the monthly cable bill by eliminating premium channels? Would it even be possible to get rid of cable altogether? Now, with online streaming many cable programs can be found for free on the Internet. Unused newspaper and magazine subscriptions, unnecessary travel, eating takeout, and going to the movies are all things that can be cut from a budget and replaced with less expensive options.

Seriously considering a few of the above-mentioned options can really open up budget cutting ideas. It may enable a family to live comfortably on less and eliminate unnecessary debt.

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