I constantly look for ways to have more money at the end of the month. There’s two ways of approaching this. One way is to make more money and another way is to cut expenses. I will be talking about the steps I take to shave off expenses in my budget to have more at the end of the month. At this rate, I will have almost an extra $4000 after 1 year!
Track Your Expenses
The key to have more money is to know exactly where your money is going. If you don’t know where your money is going, it’s destined to leave by itself. Having a budget is not only helpful, it’s necessary when you want to have more money at the end of the month. I can bet that almost every personal finance fanatic has had or has a budget to track.
After a while, it becomes second nature that having a budget is just a formality or it’s memorized, but starting out budgeting is a necessity. I review my budget that I have in a Excel document weekly and stare at it for a good 30 minutes to 1 hour to review what went wrong and what areas I could have improved on. Without knowing what went wrong, I would go about another day spending without asking myself key questions as to whether the purchases gave me value or not.
Categorize Your Expenses
Second, you have to understand your budget. Your budget consists of two parts, fixed and variable costs. Fixed costs are costs that you will spend on no matter what at a fixed price (things like rent, phone bill, car insurance, and health insurance).
Variable costs are costs that will vary month to month, it’s not a constant number. Examples include your utility bill, car fuel, groceries, dining out, and miscellaneous expenses. Your variable expenses are where the most opportunity lies in shaving off expenses and cut down costs. You control your variable costs because it solely depends on your choices how much to spend on the categories that I mentioned.
These are popular categories to track in Excel: Housing, Transportation, Insurance, Food, Pets, Personal Care, Entertainment, Loans, Taxes, Savings or Investments, Gifts and Donations. I have subcategories for each but subcategories depend on the individual making the budget.
Look for Ways to Save to Have More Money
This is where the juicy part is. After going through the preparatory steps I mentioned above, now it’s time to bring home the bacon and have more money! I’m obsessed with saving money, because a penny saved is a penny I keep. During lunch breaks, I take a walk after eating my lunch to go over what I spent on for the day, what I will spend on for the week, and what areas that I can improve on. Let’s go over how I save money.
Bring Your Lunch to Work
As of 2 weeks ago, I started brining my lunch to work. Yes, it was a bit of a pain to take 15 – 30 minutes to make a sandwich the night before but when I think about the $6 – $10 a day that I save, I think about how it’s all worth it. Some popular recipes that I bring home is chicken, triple decker sandwiches, pasta, and mushroom pork chops. I add in frozen grapes, oranges, and vegetables to each of those meals so I’m eating a balanced diet.
$6 – $10 a weekday equates to $1560 – $2600 a year (52 week year). That’s about a 2.8 – 5% increase to my salary, much better than inflation numbers. Other upsides are that I get to eat healthier, learn how to cook a little more, and not have to wait in line at a restaurant to get my food. Bringing and making your lunch is an enjoyable and cost efficient way to go about your day.
I significantly have more money every paycheck period because I put a few pieces of bread, meat, and cheese together.
Save on Your Phone Bill
I used to have Verizon as my phone carrier. It used to cost about $140 a month for 2 lines, unlimited text and calls and a 2GB data limit (so I guess $70 a month for my take). That is ludicrous. $70 a month is a lot! I was sure that I could get the same or better service at a less cost. I was right.
Many of you know that I switched to Sprint for my phone bill and at the time, they still had the “Get 50% off your phone bill when switching from Verizon” deal going on, so I gladly made the switch. I now only pay $37.50 a month for unlimited texting, phone calls, AND a 6GB data plan. 200% MORE data but almost half the cost. I am not complaining about that. That’s an extra $390 a year for me.
Use Less Electricity
I talked to some of my friends and they all seem to spend about $100 a month on electricity. What?! How?! I pay $30 a month. I turn on the air conditioner when I need to, I use my microwave when I need to, I use electricity when I need to. If it’s a necessity, I use electricity as much as I can yet my bill is 70% cheaper than theirs. Why? It turns out they keep some electricity on while they’re at work.
One of my friends doesn’t turn off every single light that’s in his apartment while he’s at work. That’s free money going to the utility companies and the environment worsening. They also leave the AC on. I don’t understand why. Leaving the AC on would only make sense if they want to feel the burst of cold air as they return to their apartment from a hot day, which is 10 seconds of bliss. Paying an extra $70 a month for 10 seconds of bliss per day is overpaying and under-getting.
As many of you know, I’m a huge fan of buying something for value, never the price. Therefore, I love underpaying and over-getting. I also time my charges so that I use my company’s electricity to charge my phone / laptop instead of mine. I unplug my microwave and any plugs that I’m not using while I’m at work because they use electricity even when not plugged in to a device. An extra $840 a year for me compared to others.
There will ALWAYS be miscellaneous expenses every month. Life will NEVER pan out exactly the way you plan out. Therefore, it’s hard to project miscellaneous expenses they will exist. Last month, I paid $99 for a dental filling. The month before it was to replace my car battery. This month, I spent $80 – $100 shopping on Amazon for things I needed (like a weight balance, pocket knife, pillow case, business casual socks, etc).
I’m certain that there will be more miscellaneous yet unforeseen expenses every month going forward. However, controlling and lowering this expense is key. I budget $150 a month for these expenses and I’ve been at or lower than that every month. Therefore, I have more money at the end of the month.
People say an extra $100 a month in side income makes all the difference in the world. It does, but you can also have an extra $100 a month by saving. Step one is to do everything you can that’s 100% in your control first then branch out to areas that’s not within your control. Side income may not always be in your control because you have to convince a customer to buy from you. They may not always buy.
Saving money is a result that exists 100% based on your effort. Effort doesn’t take any skill. I’m going to look for side income opportunities in the future but as of right now, I’m taking on one step at a time and minimizing my expenses. I make almost an extra $4000 a year by saving on my variable expenses. That’s a 7.2% raise that I’ll gladly take! Afterward minimizing my expenses, I will work on maximizing my income so that I can have even more money at the end of the month!
Readers, what are your strategies to have more money at the end of the month? Do you use some strategies I mentioned? Let me know in the comments below!
My goal is to enable your success in personal finance so that you can realize the American dream. The first step is starting today!
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