This is the final part of our how to cut your monthly expenses series. (Click here for all previous entries). We talked about classifying our expenses into two categories and discussed how to reduce our fixed costs. The second category is variable expenses. Remember the question to determine if it was a variable?
” ‘Will this expense change if I ______ more?’ The blank can be things such as cook more, travel more, or watch more TV. If the answer is no, then it is a fixed cost and a yes means its variable. “
The only way to lower your variable bills is to do less and more at the same time. Confusing right? Let me explain. If we are trying to lower our electric bill then we need to use less power in our home but we may need to do more of something to substitute for the decrease. Open our windows for more light or use more blankets for heat. Or if we want to eat out less then we need to cook more. Its an odd concept but once you understand its easy to reduce your bills that are vary each month.
Now, we know what category our bills fall into, we know how to reduce fixed expenses with substitutes and our variable expenses are reduced by doing less (and more). Look at your monthly expenses and see where you can make some cuts. Maybe refinancing your home isnt an option, but things like lowering your electric or water bill will help your budget. Pick a few bills to focus on reducing (or eliminating) and make changes that will help not hinder your family.