It’s not all the time we’re rational about our decision making, especially when it has to do with spending while we have excess cash with us.
Setting family budget is a good idea if you’re married, setting your personal budget is also easy to make but sometimes, it’s easier said than done.
Most people make new year resolution and finance is one important aspect of it but no matter how you manage to cut down cost in your expenses, there are some unexpected expenses that arise and unavoidable.
Increase in tax, children school fees, break down of office equipments, home appliances that you can’t do without, emergency trip, hospital bills as a result of sudden illness etc. All these can alter your financial budget and plans.
Even though unplanned expenditures can hit your budget plan, you can still prioritize things that you spend money on, do the most important and leave the less important, you can also plan for the unforseen events and make budgets accordingly.
Also, some expenses add value to your life, some with monetary value, some are made to acquire assets while others are on liabilities. All these are important in setting your scale of preference.
Let’s look into some of the things that cost you some budgets and how to manage your income effectively.
Avoid spending so much on travelling and make sure the value you’ll get from the trip worth the expenses.
Start small but if your trip will have positive effects on your bank accounts and income, surely, it’ll worth the spending.
Choose a less cost medium of transportation, tailor your needs, choose a cost friendly ticket type. For example, you can choose a for your travels or pay monthly but in whichever way, it would enable to save costs compared to when you buy bus ticket everyday.
If you’re a car owner, the more cars you’ve, the more your expenses in maintaining them and when it comes to petrol cost, an average driver in London spends about £1k per year on petrol and over £400 in servicing car and this can change depending on some other factors.
The Ministry of Transport test; an annual test of roadworthiness for British cars over three years old can cost an average driver about £170 yearly annually, so also the expenses on car parking can amount to about £1455.
The individual lifestyle can speak volume on spendings. How extravagant one is in spending can make one to alter plan unnecessarily and spend out of budget.
Some of the common things that make the difference are the following.
If you can’t do without taking coffee everyday like some of my friends, you can be spending a relatively huge budget on coffee annually without paying attention to such expenses.
There was a time MyVoucherCode carried out a research to estimate the number of people in the UK that go to coffee shops at least 3 times a week and came out with conclusion that, there are so much people that are addicted to drinking coffee and this had led to the increase in coffee shops in the country.
An average person is said to visit coffee shops about 156 times annually and spend a little more than £8 on average and about £2,500 spent per year.
The researcher now advised that such amount of money could be saved if you can make your own coffee at home and at the same time, you’ll be cutting down your annual budget and spend more in acquiring assets which in turn increase your revenue.
From Douwe Egberts’ analysis, 50g of powdered coffee can make 6 cups of coffee tea and if you’re to buy that 50 g pack from store, it costs an average price of £750
Now that the price of tobacco and cigarettes are high, this means that the amount you’ll save if you can quit smoking completely or reduce the number of ciga you smoke each day can do much more in contributing to your assets.
For people that take 10 cigarettes per day, you can be saving close to £2,000 per year and would be more if you’re taking more than 10 cigarettes per day.
Not only would you cut down costs on your tobacco, you’ll also spend less on maintaining your health either now or in the future.
Studies also showed that nonsmokers spend less on life insurance and such money can be invested to bring yield and improve the finance of the family or the individual.
Going out for lunch everyday can also cost you much without you getting to know this.
We can be addicted to going out or eating in canteens but what if you’re told that you can save up to £2,000 if you stop the habit of taking your lunch every day in cafeteria.
Not everyone can go with lunch meal to office in the morning and your wife may not be able to get your lunch down where you’re.
Driving back home to find something to eat may also be difficult, thereby, taking junks or walking to any nearby restaurant is your best bet but when you understand the advantage in minimizing these costs, the better you’ll be able to grow financially.