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How to spend less | 01 Apr 2010

Spending Less: Targeting Your Fixed Expenses

Diet can start today, not tomorrow. We understand thereís always a certain challenge in the act of reduction and moderation, but the benefits will be rewarding.

Spending Less: Targeting Your Fixed Expenses

Diet can start today, not tomorrow. We understand thereís always a certain challenge in the act of reduction and moderation, but the benefits will be rewarding. Other than working out a budget, the next hardest thing in managing your finances is trying to reduce your expenses. Even reducing it by a mere $50 a month can be a challenge for some, especially those financially bulimic. And so they say, the bigger the umbrella, the better we are protected from rainy (or worse, thunderous, stormy) days. Hereís some tips and tricks for a fatter wallet and bank account!

Generally, our expenses can be divided into 2 categories Ė fixed and non-fixed expenses. People usually think that when trying to cut expenses, we should always look into the non-fixed expenses and do things like packing lunch to office, not ordering drinks and bring a water bottle to lunch etc. These methods work for some individuals, but they are like crash diets; it makes a small impact and is difficult to sustain in the long run. What we should look at first is our fixed expenses and how we can reduce that, this is where you are more likely to make a significant cut for a long period without having to adjust your lifestyle too much.

Take for example your phone bills. Are you using much more talk time or smses than your plan provides? If you are, then you should consider a more expensive plan that gives you more free minutes or texts. Extra minutes and smses that are not within your plan cost more than the Ďfreeí ones that are packaged into your plan. If on the other hand, you are using lesser than what your plan gives for a continuous period, then you should downgrade once your contract is up. Donít get a more expensive plan just so you can have a higher discount on your handset! For example you have a $30 plan now, and in order to get an additional $100 off your handset, you upgrade your plan to a $40 one and sign on a 2-year contract. For 2 years, you have to pay an extra $10 every month for something that you donít need. That works out to be a total of $240 and in return you only get a $100 discount for your handset!

The same concept works for other bills like your internet or cable subscription. Spend some time to take a look at your subscription and think about whether you really need those channels you subscribe to. Does it make more sense to take out your movie channel and rent videos or watch them online instead? And do you really need that 10mbps broadband plan? With just 1-2mbps for each home PC or laptop, youíll find that itís more than enough for the average user. So even if you have 3 users, a 6mbps plan is more than enough for the household. Again, donít be tempted to sign on for a more expensive plan, one you do not need, just because they throw in some freebies! Other than cutting down on unnecessary services, another idea that you might want to consider is to get as much services as possible from the same company. If you get your mobile and internet services from the same provider, they usually offer you a cheaper package. For mobile services, there are other perks like discounts for multiple lines if your family members also subscribe to the same provider.

Of course if you do things like switching off the lights when you donít need them, and turning off all your switches before you leave home, it will cut down your utility bills and save the Earth (Singapore will be a little cooler without global warming!). Reducing your usage is a way to cut down expenses, but it is not the only method! Do a little research before you sign on for services. Spending that little effort will help you to save in the long run. Youíll be surprised by how much you can save if you can do a comparison before making a decision. Sometimes by being familiar with what the market is offering, you may be able to bargain with your current service provider to throw in vouchers or discounts that you might not otherwise get.

Article by Ash

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