When people feel an economic pinch they turn right away to finding ways to cut expenses. Before you reduce expenses it is essential to get in control of spending—otherwise the end result of cutting expenses here and there is little or nothing. But after that, learning to cut costs is indeed a key element in financial success.
Motivation to Cut Expenses
Once in control of our money we do want to then learn to reduce expenses. As noted, most people think about the need to cut expenses because they get into a bind financially. That is obviously one motivation for wanting to reduce expenses. However, there are many positive reasons for wanting to cut costs.
If we do it right and get in control of our money first, reducing expenses can help us accelerate getting out of debt. It can help us increase savings for our emergency and retirement funds. It can make money available for investments or business activities that can increase our income.
If we only act to avoid pain our success will be limited; if we are motivated to action in order to gain an advantage our success can be enormous. In this article I want to suggest some ways to promote the latter.
List Benefits of Cost Reduction
This action step is very simple but it can impact your motivation to reduce expenses in a powerful way. It requires only a paper and pen, or you can do it on your computer if you prefer.
Write across the top of a page this title: My Reasons for Cutting Expenses. Now, list below it the benefits you will gain from lowering your monthly expenses. Some of them will be factual benefits, perhaps being able to save up some money for a new car. Some of them will be emotional or psychological benefits, perhaps being able to sleep better at night or feeling more successful in life.
Reflect on the possibilities. You may be surprised. I have lived on both sides of the fence in my life, so I can tell you emphatically that learning to live on less than you make is one of the most dynamic changes a person ever experiences in life.
Affirmations to Cut Costs
This action step suggests using affirmations to help shape our thinking so we will be motivated internally to take steps to reduce our ongoing expenses.
Here are two affirmation to say daily for at least a month and weekly until firmly adopted in practice. Write them on a 3X5 card and read them aloud. They relate to reducing expenses, remembering that every monthly obligation has the same confining restrictions as a debt.
- Every month I find a new way to reduce my ongoing expenses.
- I enjoy greater financial freedom each month because I have fewer money obligations.
Of course you will want to reinforce these affirmations by taking active steps to reduce expenses in your monthly budget. Once it is established as a consistent attitude, looking for ways to cut costs becomes an exciting opportunity to make your life better as you reduce ongoing expenses.
Find Ways to Cut Expenses
New technologies regularly offer new opportunities for savings. Often huge savings can be had by modifying cell phone plans to meet individual lifestyles.
EXAMPLE:
Recently I read that the federal government expects to reduce its telephone expenses by forty percent over the next few years by switching to internet phone service. Many people simply eliminate land lines altogether.
Another potential area relates to insurance. Sometimes switching companies can be a good idea but even more often great savings can be had by eliminating policies that are no longer important. For example, life insurance needs change with age. Usually as we grow older we have adequate savings and fewer family responsibilities so we do not need the same coverage as in our younger years.
As you review this affirmation and establish a new way of thinking you will see a change in your life—as long as you have a commitment to avoid new entanglements.
These reductions in expenses can make a real change in your financial circumstances. And you will begin to see a remarkable change in the way you feel about your success with money.
Commit to Cost Reduction
Our point in this step is to change our attitude so we will take action to cut expenses. Use these action steps to help mold your thinking about the value of cost reduction. This will help you to consistently reduce expenses each month. The truth is, most of us can cut costs considerably when our attitudes are positive about the options and their benefits.
