Personal Finance – Cutting Spending and Boosting Income

Finding ways to increase your family's income may also be essential, especially if you've cut your budget to the bare bones and you're still sliding backward, just treading water, or paying for every unexpected expense with a credit card. You may also want to consider working at another job or working more hours at your current job.

Do not reject any cost-cutting ideas right off the bat, even if implementing them means major changes in your lifestyle and a lot of sacrifice. Be open to anything and everything; try to focus less on what you're giving up and more on where spending less will help get you in the end.

After you give up a few "essentials," you may discover that you do not even miss them. You may find that not having them actually improves your quality of life. For example, using public transportation to get to and from work gives you time to read, think, and maybe even relax. And cutting out some activities that have filled your kids' after-school hours and weekends may open up new opportunities for you and your kids to interact.

Housing is probably the single biggest item in your budget, especially if you are a homeowner and take into account the cost of maintenance, repairs, insurance, and taxes. You can rein in your housing costs in many ways.

You may find a silver lining in your cash crunch if you're a regular smoker or drinker. Not having the money you need to pay your creditors and cover your basic living expenses may convince you that it's time to become a nonsmoker, or to give up that glass or two (or three) of wine you sip at the end of each day, or that six pack of beer you throw back each evening.

Let's assume, for example, that you and your spouse or partner enjoy a £ 15 bottle of wine with dinner each night. In a week's time, your nightly bottle of wine costs £ 105 you. That's £ 420 a month and more than £ 5,000 a year! Now that's a lot of money to spend on the fruit of the vine. Just think what you could do with that money instead.

Now let's look at how much you may be spending to smoke. Let's assume that you smoke half a
pack of cigarettes every day and that you pay £ 5 for each pack. More than £ 900 of your money is
going up in smoke each year, which does not even take into account how much extra you're paying
for life insurance because of your unhealthy habit.

If you give up the habit, you can reduce the cost of your premium by as much as 30 percent. You'll probably pay less for health insurance as well.

Reducing your budget does not mean that you and your family have to eliminate fun from your lives. It means cutting out the frills and taking time to find affordable ways to have a good time. Think back to when you were just married and money was tight or to when you were a kid. What did you do for fun then? Do any of these cheap fun suggestions sound familiar?

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