If your wallet doesn't bulge with cash quite like it used to, you may be looking to trim some of your spending. Cutting your expenses by 10 percent probably won’t be as easy as simply reducing your current discretionary spending. If you’re living close to your financial edge, you’ll need to look for creative ways to cut down on your expenses. Starting with your target numbers and creating a plan to help reduce your costs is easier if you have a budget and think outside the box to pare your spending.
Create a budget if you don’t already have one to determine your current fixed, variable and discretionary expenses. Determine the amount of money you spend each month and multiply that number by 0.10 to determine how much of your monthly expenses you’ll need to reduce.
List the expenses you think you'll most likely be able to reduce, such as groceries, dining out, clothing and entertainment. Determine if you can cut these expenses by 10 percent. If you can’t cut them by 10 percent, figure out how much you can cut in these areas, then calculate how much you’ll need to cut your spending on other things to make up the difference. Examine additional spending areas you may be able to cut, including insurance premiums, utilities, credit card interest, retirement savings and health care.
Participate in a flexible spending account if you know you will have out-of-pocket costs for health care during the year. Estimate the amount of health-care expenses you'll likely have during the year and have that amount deducted from your pay. This tax-deductible contribution will let your keep more of your paycheck in your pocket than in Uncle Sam's.
Shop for a credit card that will let you transfer a balance at a low interest rate or one that’s interest free. Transferring $3,000 of credit card debt currently at 22 percent interest to a 12-month, interest-free piece of plastic will save you more than $650 in interest payments annually.
Purchase a programmable thermostat and reduce your heating and cooling use while you are at work and asleep. Reducing your heating and cooling by 10 to 15 degrees Fahrenheit for eight hours each day can reduce your utility bills by 10 percent, according to the U.S. Department of Energy. Buying energy-efficient bulbs to reduce your electric bills lets you go green while saving green.
Contact your home and auto insurance providers to calculate the savings of raising your deductible. If you have a claim, you will pay more, so this is a gamble.
Reduce the amount of money you contribute to your 401(k) or other retirement program and use that money to pay down credit card debt. You might lose more money by giving up your employer’s match, but as a temporary solution, this will help you pay your bills now.
Prepare more home-cooked meals, pack your lunch instead of eating out and knock off the trips to the coffee shop for your daily double caramel macchiato. If two people in a household each skip two $5 cups of coffee and two $10 lunches per week, they’ll save approximately $250 per month and $3,000 annually to use toward less-expensive brown bag lunches.
Shop for clothes at thrift shops to look stylish without having to break your piggy bank. Look for nonprofit stores such as Goodwill and the Salvation Army, which can sell brand-name clothing at the lowest prices because the clothes are donated.
Change the oil and air filter in your ride regularly, keep the correct pressure in your tires and have spring and fall tune-ups to improve your gas mileage and lower your monthly gas expenses.
Sam Ashe-Edmunds has been writing and lecturing for decades. He has worked in the corporate and nonprofit arenas as a C-Suite executive, serving on several nonprofit boards. He is an internationally traveled sport science writer and lecturer. He has been published in print publications such as Entrepreneur, Tennis, SI for Kids, Chicago Tribune, Sacramento Bee, and on websites such Smart-Healthy-Living.net, SmartyCents and Youthletic. Edmunds has a bachelor's degree in journalism.