There is something special to be said about reducing one's expenses, especially during the inflationary cycle many people are in today. This episode focuses on identifying and reducing your expenses. Even though the price of gas, food, and other goods and services have increased, some people continue overspending, this episode addresses theses issues.
The quote, "When you are in a hole, stop digging," applies to some people when it comes to being in debt. In other words, even though goods and services have increased, some people are going about their lives and not reducing their expenses, this episode speaks to this type of mindset.
There are three types of expenses listeners should be aware of, these are fixed expenses, a person pays the same amount each month, think of a mortgage payment. The next is a periodic expense such as a vehicle registration that may be due every two years. Lastly, there are variable expenses which are routine expenses that are different each time you pay. All three of these expense types are impacted by inflation, mind you there is going to be six more rate increases during 2022.
Fixed expenses are easy to track and include in your budget, with emphasis on expense reduction. Periodic expenses are easy to save for, thus easy to track as part of your budget. Variable expenses may require a different bank account, a stand-alone account to track and reduce over time.
At some point in time, one must ask themselves if they need certain expenses or not, if not, stop and pay it off, and if yes negotiate the expense, transfer, and or manage it better.
There are different options to apply that pertain to your expenses, they include: reducing, negotiating, transferring, and managing, so evaluate and assess your options.
If you have an apartment negotiate your rent, reduce homeownership expenses, reduce utility expenses, reduce transportation expenses, and reduce loan and debt expenses.
Given that we are in an inflationary cycle, it is even more important to reduce expenses at every level of your life. Whether it is for housing, food, gas, and other goods and services, the time is now for expenses reductions. Day three of the National Financial Literacy Month is one of the most important episodes of this month-long series.
Learn about Paul Lawrence Vann's virtual Financial Fitness course, it is being offered at a 50% discount throughout the month of April, National Financial Literacy Month, here is the link: https://bit.ly/3dbperG