How to Live on a Budget – Reduce Your Housing & Living Costs

March 30, 2014

Personal Finances


Living Cost Reduction

Budgeting – the “B” word nobody wants to talk about, but we are going to address it here today.

Do you ever wonder why at the end of the month there’s no money left over, or why your credit card balances keep increasing.  May be it’s because you don’t have a budget set up, and you don’t realize that your expenses run higher than your income.

A way to solve this problem is to develop a budget spreadsheet, which we will discuss in our next blog.   In the meanwhile, keep in mind that no matter how much we hate to change our lifestyles, most of our money problems can be solved by lifestyle changes.

So what can you do if your living cost and expenses run higher than your income, and your credit debt keeps increasing?  For tips, read below:

 Reduce Housing Expenses

  • Move to a cheaper place
  • Get a roommate  ($900/mo = 10,800/yr)
  • Get rid of premium cable channels; monitor your cell phone bills; use grocery coupons; dilute shampoo

Give up a car

  • Gas, maintenance, car payments — imagine the money you could save if you gave up one household car, or found other ways to commute and run errands. A growing number of cities offer car-sharing programs (Zipcar and Flexcar) or even bicycles

Get (another) job

  • If a part-time job gave you an extra $300 a month, that’s $3,600 you can put toward debt this year

Quit your vice

  • Today’s indulgences can add up fast: at $7 a pack for cigarettes – giving up a pack-a-day habit will save you $2,550
  • Starbucks, take-out, breakfast bagels, snorting cocaine

Let the kids go public

  • Average cost of private elementary and high school is about $4,689 a year.  Public school is . . . free!

Tap your assets

  • If you have access to a nest egg, windfall, or generous relatives, consider using that money to pay off interest-generating debt. Don’t raid your 401(k) or other retirement funds, but you might want to consider selling other assets:

My husband has about $18,000 in stock that he can sell for a loss. Using part of that to pay off the $6,500 debt currently on a 16% interest card is like getting a 16% tax- and risk-free rate of return. The relief we feel taking these extreme steps far outweighs the discomfort (which is only for a year anyway). Check it out: The roommate gives us $10,800; quitting smoking $2,550; extra work, $5,000, for a total of $18,450 paid toward debt by next August. The remainder is what well take out of his nest egg. Our current monthly payment will buy us some breathing room and a help us start a new emergency fund.


Share and Enjoy:
  • Facebook
  • Twitter
  • LinkedIn
  • MySpace
  • Digg
  • StumbleUpon
  • Technorati
  • FriendFeed
  • RSS
, , , , , , , , ,

New post from

We respect your privacy and will NOT share your info! Subscribe below to get copies of new posts by e-mail:

No comments yet.

Leave a Reply