What Do You Absolutely, Definitely Need to Spend Money On Every Month?
Is one of your major financial concerns the fact that money just dribbles out of your bank account month after month?
It is pretty much impossible to save money well when you are spending more money than you need to. So what about the things that you simply have to spend money on, is it possible to save on these?
You aren’t going to go through the full month without eating, are you? Food is one of the biggest expenses for most of us, although the percentage of your income you spend on it will depend upon the country you live in. For example, in highly developed countries like the UK and the US we spend a relatively small percentage of our cash on food. In less developed countries people tend to spend a lot more of their income on their food. In fact, there is a theory – known as Engel’s Law – which states that as your income rises the percentage you spend on food falls too. In the US it has been calculated that average household spending on food has fallen from 17% to 11% in the last 3 decades, would you agree with these findings?. It is clear that no matter how much you earn you can’t avoid spending on food. However, you can be smart about it and keep the spending as low as possible by looking for bargains and not wasting food.
Is it better to buy a few clothes each month or to wait and buy a big lot in bulk at some point? The best piece of clothes shopping I ever did was a few years ago when we were really short of cash. We bought a load of clothes during the January sales for next to no money and this meant that the next year or so went by without us having to buy any new garments at all. This was a huge benefit to us during that year and helped us put our finances in order. You might not realise how much you spend on clothes if you buy something here and something there every single month. Of course, buying in bulk only works as long as your taste, your needs and your weight doesn’t change too much in the near future. For example, I still have a rather silly little chequered waistcoat from that January sales splurge which I have never worn and never will. It only cost about a pound though, so maybe I’ll find someone to buy it off me for the same price.
You also can’t get through the month without a roof over your head either. Probably the biggest financial improvement I have ever felt was when I went from renting a home to moving into a property that we had built. My monthly outgoings on shelter went from about £550 on rent to zero, as there was no mortgage on our new home. Nothing else really changed in our finances but the removal of that whopping big rental amount was a massive relief. The rent had been a massive percentage of our monthly income and getting rid of it was amazing. For most of us our rent or mortgage will be our biggest single monthly expense. You might think that there is nothing you can do about it but moving to somewhere else or remortgaging your current home can give you a lower outgoing each month. If money is really tight then another suggestion which has helped me out in the past has been to rent a room in a shared property. This is a lot cheaper than renting an entire house and can help you save a lot of money even if you only live like this for a few months.
Is there anything you simply can’t not spend money on every month?