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Whether you’re managing on a smaller income or simply looking to better manage your budget, cutting expenses can be difficult when all of your monthly bills seem like they’re necessary. However, even if you’re smart with your spending, it’s likely that you still have costs you can cut.
You can start by tracking your spending for a month and then determining whether each item is a fixed, variable, or discretionary expense. For each type of expense, there are different tactics you can use to try to cut back:
A fixed expense has a dollar amount that doesn’t change month to month, such as mortgages, school loans, or rent.
Ways to cut: While these bills remain steady over time, making proactive choices can impact these amounts in the long term. If you’re a renter, consider finding a smaller space or getting a roommate if your lease allows it.
These necessary expenses vary based on your usage, such as grocery costs, utility bills, and transportation.
Ways to cut:
These expenses include anything based on personal wants and needs, such as clothing, entertainment, and restaurant expenses.
Ways to cut:
Cutting expenses can involve major lifestyle changes, but also modest changes in how you spend. Avoiding overspending can also help you achieve financial success in the long run.
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