Know Your Fixed Expenses

by Reggie
(Omaha, Nebraska)

First and foremost, before attempting to set up a budget, it is essential to know the amount of your fixed expenses, i.e. mortgage and car payments, property taxes, medical, homeowner, and life insurance.

You know, expenses that remain stable.

If you can reduce the amount of any of these expenses, make an effort to do that first. For instance, maybe a higher deductible on certain insurance policies would lower the premium. Only after knowing the total amount of your fixed expenses can you set up a proper budget for the variable expenses like groceries, clothing, entertainment.

I have found that rather than dedicating a certain amount to each of these type expenses, it is better to simply save as much as possible and be frugal on just about everything.

In other words, do not spend unless you absolutely must.

For groceries, price checking is of paramount importance. There is no need to buy name brands when store brands will do just as well. Frozen vegetables are sometimes way overpriced and it doesn’t take that long to chop up a head of broccoli at $1.50 or $2.00 instead of buying a bag of frozen broccoli at over $3.00.

However, buying a frozen pizza is better than ordering for delivery and can be just as good!

In other words, think before you spend.

Dining out? Tip the server on the bill, not the bill plus tax. (Servers will hate me for this suggestion, but it’s not fair to diners to be taxed on tax.)

I purchase most of my clothing from catalogs that arrive by the ton in the mail. Wait until the shipping is free, which it is many times a year. This saves me not only the shipping charge but the gas I would be using to drive around to the clothing stores.

I think frugal living is a state of mind that says “I will not spend any more than I have to spend.”

Sometimes the word “budget” is similar to the word “diet” in peoples’ lives. It is better to have a “save all the time” mindset.