Three Smart Ways to Downsize Your Household Budget

Budgeting and cost-cutting are two topics that most people would prefer to avoid. But with just a little planning and a minimal amount of number-crunching, you can discover effective ways to cut the “fat” out of your household budget and end up with more money for other purposes, which could include long-term savings, vacations, gifts and whatever your heart desires. Wouldn’t it be nice to suffer, right now, for an hour or so and end up having more cash in your account at the end of every month? Of course, it would. Here are three time-tested strategies for paring your personal expenses:

Make a Detailed Budget

First things first. Even if you already have a budget, put it all on paper or an editable spreadsheet in front of you and begin slicing and dicing. Consider every penny that you spend and make sure all those pennies go into a labeled category. Typical money-eaters for the average single adult and family include groceries, fuel, dining out, utilities, discretionary/entertainment spending, clothing and whatever else you use money for.

Shop at Retail Membership Clubs

Financial planning pros like to point out that it really does pay to get one of those “retail club” memberships. Most every city has at least one. On average, consumers can save about 20 percent on groceries alone with a club membership, which typically costs around $50 per year. For an average single adult, that can add up to $550 or more annually.

In addition to saving on groceries, keep in mind that the shopping clubs sell other standard consumer items as well, like gasoline, household goods, clothing, and other essentials. Another club shopping advantage is convenience. One-stop buying means you’ll spend less time, buy less fuel and not be so exhausted on your days off. For example, both Sam’s Club and Costco gas hours allow for early morning and late-night purchases, so you can do most of your shopping in one place, on one weekend day.

Brainstorm Ways to Cut Costs

If you have a spouse and any children older than 12, make this brainstorming session a family affair. It’s a great way to get ideas from multiple sources and your children will learn about how to handle money responsibly. First, go through grocery lists item by item and see where you can replace top brands with generics. Can you eliminate “on the go” snacks at convenience stores? What about restaurant meals? Can some of the pricier places be removed from your itinerary and replaced by less expensive eateries?

The point here is to cut “fat” from the budget, which you can’t really do until you have a detailed expense listing in the first place. See step one of this list. It’s first for a reason. Also give a glance at clothing and entertainment spending, even though those are not two of the main offenders when it comes to budget “leaks.” Experts say that most people who overspend, even slightly, do so at convenience stores while purchasing gasoline and at fast-food restaurants during unplanned stops.