What Are Cutbacks?
Cutbacks refer to steps taken to reduce the amount of money being spent. If you’re coming up short each month when it comes to paying your costs of living, you probably need to reduce your spending. However, taking the time to budget may reveal some relatively painless ways to do so.
Scrutinize Your Expenses
Make a list of all the expenses you pay each month so you can assess which ones are vital and which ones can be reduced. If you haven’t been tracking your spending, make your best guess as to how much you spend. But, going forward, keep a record so you know. US News names expenses like cable TV, cell phone plans and personal vices ranging from gambling to soft drinks as potential ways to cut spending. If your budget affects someone else, such as a spouse or roommate, make sure they’re on board with the cuts you’re making as well.
Adopt Tactics to Keep Spending in Line
Once you’ve decided on the cutbacks you want to make, take steps to make it easier for you to put those into practice. For example, if you’re trying to cut back on the amount of money you spend on groceries, shop with a list and don’t go to the grocery store when you’re hungry. Or, if you want to spend less on gas, take a few minutes to plan the errands you need to run so you can combine them into one trip.
Tracking Your Progress
Deciding what categories of expenses you are going to cut is a great first step, but you need to follow up by tracking your spending to make sure you’re hitting your goals. Financial software, like Quicken, can show you how you’re spending your money. For example, you can see exactly how much you spend from month to month. And that way, you can hold yourself accountable for not going over your limits.
Alternatives to Cutbacks
Cutting costs is one way, but not the only way, to bring your expenses in line with your income: You also can get your spending to match your income by taking on extra work if you have the time and ability. Whether it’s taking on an extra shift at your current job or starting a business on the side, increasing your income allows you to balance your budget without cutting quite as many expenses.
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