Expenses. We all dread them. But whilst we can’t totally eliminate them, we can surely minimise the, The first step in trying to cut your expenses is to figure out what they are. people have different expenses as they put value on different things in their life. But there are three expenses – which all people have in common – that are essentially going to cost you the most over your lifetime.
Below are the 3 big expenses you will incur over your life time. Control these expenses and you can control your financial life. let these expenses spiral out of control and you may never be able to retire.
To many,housing is the single biggest outlay. For the average Brit, annual housing expenses are about £12,000? a year. This is a large chuck of the average £30,000 a year income.
If you wan to be financially free, you need to keep your housing costs down.
If your housing costs are a large proportion of your income, consider downsizing. Many peole live in houses that are too big for there needs. By downsizing, you can unlock some value by putting the extra money from the sale f your house in your savings and investment account. By downsizing, you also get the extra per of having lower average bills thus lowing your expenditure.
In the UK at the moment, many first time buyers fear that if they do not buy now house how, they will never be able to afford one as a result of the rapid house price rises – I don’t blame them for this mentality. But many first time buyers are stretching themselves in doing so. This is never a good idea. The mortgage may seem manageable now but when interest rates rise, they will put a massive financial strain on themselves. Before taking out a mortgage, see if you are able to keep up with payments if Interest Rates rise.
Transport is another large expense for many of us.
Transportation expenses cost the average Brit in excess of £3500 a year. This is another huge expense which takes up a large chunk of your post-tax income.
With the cost of fuel declining over the past year, the expenditure incurred on transport prt will definitely decrease for most. But for those who commute via rail, costs are constantly increases t oto the ever occurring strikes and price increases.
Consider other modes of transport you are not used to. Try taking the bus to work or riding a bicycle. A friend of mine in Nottingham rides his bicycle to work everyday and he says it is a pretty common thing to do there.
Now I know the bus/bicycle is not practical for most people as the need for a car is a must. So when you buy a car, buy it second hand instead of new. A new car loses 10% of its value the moment you drive it off the lot. According to theAA the further loss in value after one year is 40% and after three years it is 60%.
Used cars work as well as new cars and you get them for half the price. The only difference between a new car and a used car is the pride you get hen you tell your friends and family that you got a new car. But for me, my ‘pride.’ is not worth X amount on a new car. My pride is looking at how much my net worth grows over the years.
Who doesn’t like food? I can’t blame you if you like to eat good food.However, like everything else, moderation is probably best. If you constantly eat out, it could be unhealthy for you and it will definitely cost you a lot of money. I’m not saying don’t go out, but you should instead treat going out as a reared for accomplishing something. That way, you save on money and keep motivated on accomplishing your goals.