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Your Biggest Expenses & How Can You Help Reduce Them!

by Gilly Brewster
(California, USA)

In the tenuous post-recession economy, frugal practices continue to be a part of house rules. Apparently, incomes and assets have been decimated so much that the penny-pinching mindset has turned into standard practice.

Individuals and families continue to tweak their spending patterns, cutting corners where possible and realigning priorities to curb spending. Data from the Bureau of Labor and Statistics indicate that the biggest expenses have to do with housing, food, clothing, transportation and insurance premiums as a whole.

1. Housing

Financial experts contend that no more than 33 percent of household income should go to housing expenses. The ratio is about the same whether the money goes to mortgage or rent payments.

To trim housing expenses, renegotiate the lease when it comes due. Back up the request with comparable rents in the area. If all else fails, downsize to a smaller rental to cut down on rent.

Many programs are available to qualified homeowners to reduce mortgage payments one of these programs provide quick debt relief. In such cases, explore the possibility of taking in a tenant to use part of the house in exchange for monthly rent that should cover part of the mortgage payment.

2. Food

Expenses for food and drinks should take up no more than 15 percent of the household income. With food prices rising, it has become more difficult to stay within budget. Using coupons and shopping sale items only can cut 15 to 20 percent off the household budget.

Alternatively, preparing food from scratch rather than purchasing pre-processed packages will cut spending drastically especially when matched with cutting down on eating out.

For people who spend substantial amounts on special diets and supplements in the never-ending battle of the bulge, it might be more prudent to spend less on non-essential food items like snacks and beverages. Tempting calories that don’t make it past the front door represent calories saved and cravings conquered.

3. Transportation

Vehicle maintenance and gas expenses highlight how today’s car dependence is taking over our lives and at least 20 percent of budgets.

Rising gasoline prices have given new meaning to pain at the pump. If at all possible, become a one-car family with schedules worked around the availability of the car. As an alternative, use public transport as this reduces transportation costs and carbon emissions as well.

4. Clothing and Footwear

Clothing retailers survived the economic downturn because clothing is as much a necessity as food. Short of advocating for the return of fig leaf fashion, reduce clothing expenses by shopping in one’s own closet. Re-imagine the existing wardrobe by creative mix-and-matching and accessorizing.

To get more yardage out of the clothing budget that already takes up five percent of the total, shop thrift and consignment stores where designer outfits can be had for a song and a package of home dry-cleaning materials.

5. Insurance Premiums

Americans are insured to the hilt for good reason. Mandatory insurance for car ownership, home and business ownership along with all manner of life and health insurance adds up to at least 10 percent of the household kitty.

It is not possible nor is it smart to forego insurance. It is the ultimate financial safety net that will provide some compensation when an unforeseen event occurs. However, it is possible to pare down these expenses by examining existing policies with the assistance of professionals at or other comparison websites. Insurance advisers will pinpoint areas that can be bundled together to lower premiums without sacrificing coverage.

Expenses can be trimmed drastically with some creativity and a lot of resolve to live on a leaner budget. Money saved is money that goes into the retirement fund.

Updated: May 10, 2013 — 9:39 pm

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