Cutting Expenses and Reducing Attachments

Cutting expenses is one way to meet your monthly budget. Cutting down on expenditures by itself can seem like a difficult thing to do. The secret is to cut your outflow while not feeling deprived or impoverished. How in the world can that be done? We will explore some observations and techniques that will lighten your load and lift your spirit.

Before you begin to reduce your monetary outgo, you need to get your mind into the right place. The following techniques are just some of the methods that may help you. Use your imagination to come up with your own routines.

Construct a daily gratitude practice. I can tell you from personal experience that gratitude is a ticket to freedom from craving things in this world. See all that you have in the present moment, and give gratitude for it all. If it helps you, keep a gratitude journal that you write in daily. You can have gratitude for any number of material or non-material things, such as a job, health, sunsets, meals, people, and so on. Once you get good at gratitude, you will find ways to give gratitude for challenging people and situations. Sometimes these difficulties are just gateways to the next adventure. Other times, they are the key to our personal and spiritual growth.

Release the clutter in your life. Clutter represents chaos, and chaos can take over your finances and your sense of peace. If you have old items that you are not currently using, donate them, sell them or throw them away. Keep your living and working spaces as clean and neat as possible, not in an obsessive manner, but as a means of caring for yourself. Throw away old papers. Realistically look at family heirlooms. Do you want to keep Grandma’s sterling silver collection? Consider what your kids will do when you are gone. They will probably sell or donate all of that stuff in an instant.

Be open and honest with others to the extent possible. Keeping secrets, gossiping and playing other mind games is an energy drain. Sometimes it seems as if others are not ready to handle the harsh truth, so choose your words with kindness in mind. Being both honest and kind can appear to be difficult; you must set an intention to be both before an awkward conversation.

Let go of attachments to material and non-material things. You don’t need the latest and greatest of everything to make your life complete. You must realize that you are already complete without adding a new car, phone or relationship. This step is probably the most difficult of the steps for some people. It requires acceptance of, forgiveness of, and compassion for one’s self. Say to yourself: “I will be alright whether or not I have a new _.” If you want to make a practice out of letting go, I highly recommend the book “Letting Go: The Pathway of Surrender” by Dr. David Hawkins.

When you feel you are in an excellent place to start cutting expenses, compare your budget to your monthly outgo. Look at your most substantial expenditures first and make decisions on how to reduce or eliminate them. Below are some ideas.

Vehicle Expenses

Properly maintain your vehicle. Do the manufacturer’s recommended maintenance as shown in the manual. While this may seem to increase your vehicle expenses in the short term, in the long run, it means significant savings on breakdowns. The key is to maintain your vehicle in the most economical way possible. Make sure your tires are always properly inflated, for fuel economy as well as safety.

Find mechanics and service shops that are reliable and honest. Nothing is more aggravating than wasting money on unnecessary repairs and services. Consider online ratings and word-of-mouth referrals. Dealership service departments are usually reliable but can be very expensive.

Look for coupons and advertised specials. Always comparison shop.

Don’t be afraid to get a second opinion on repairs.

Buy recent model used cars instead of new cars. A vehicle less than two years old with less than 40,000 miles is ideal from a cost standpoint. The reason for this is because the initial depreciation has been taken already. Comparison shop for prices and get an online car history as well to make sure you are getting a car with a clean record.

Consider public transportation if it is feasible.

Carpool when possible.

Shop around for car insurance, but be aware of the various companies’ reputation for paying claims and dealing with customers. Set your deductibles as high as you feel comfortable. It is better to have higher coverage limits than lower deductibles. If you have an older car of relatively small value, you might consider skipping collision coverage.

Financial Expenses

Refinance high-interest debt at lower interest rates. Look for better credit offers online.

Check your credit score. Make sure your credit is maintained or improved. Watch for fraud or mistakes.

Home Expenses

Reduce energy expenses. Set your heating and air conditioning to a slightly less comfortable setting, and adjust your clothing instead. Programmable thermostats are helpful by changing the temperature based on the time of day. Use LED or CFL light bulbs for lights that are regularly used. Make sure your home is properly insulated and sealed.

Perform regular maintenance. Like your car, your home requires routine maintenance. In particular, heating and air condition systems must be serviced regularly to keep in top operating condition. If you use a service, check online ratings and comparison shop. If you have a yard, it is essential to keep it minimally maintened to keep your home’s value or maintain required standards.

High-speed internet is a required service. Shop your local providers based on reliability and speed availability.

Make sure you have adequate homeowner’s coverage. If you haven’t changed your limits in a long time, take a look at your coverage limits to make sure they still are enough based on the current value of your house and belongings. Choose a higher deductible.

Entertainment

TV subscriptions vary in price and content. Cable and satellite TV can end up being quite expensive. While the providers advertise low rates, they quickly muddle up the picture with equipment charges, optional channels, contracts, and regular price increases. They make comparison shopping difficult by “bundling” services. The newer online TV services offer better prices and more fine-tuned options. The requirements for these services are fast internet and a smart TV or TV box (like Roku or Apple TV). To get local channels for free, you can buy and install an HDTV antenna. Do you want to record local TV? Some devices will do that as well. The bottom line is that many “cable-cutters” have dropped their cable or satellite service and replaced it with online services plus an antenna for free local channels.

Life and Health Insurance

If you have dependents, life insurance is essential to protect them. Shop around. If you are in good health, an individual policy is often a better deal than group life insurance through an employer. Term insurance is sufficient for most people and is the lowest cost option.

With the high cost of healthcare, health insurance is critical, even if you are in good health. You can’t predict the future. Generally, the higher the deductible and the more skimpy the provider options, the lower the cost. Hospital insurance, critical illness insurance, and accident insurance are lower in price but are not a good substitute for actual health insurance.

Charitable Giving

One of the first items that get cut is often charitable giving. Think twice before slashing your giving. Not only does your gift it make a better world for humanity, it provides you with a sense of well being. It can also be a tax deduction. Offering a donation to an organization that spiritually nourishes you is giving back and helping others get the same nourishment.

Food

Let’s face it, eating out is fun and a nice break as well as a reason to get out of the house. That being said, we need to manage the number of times that we eat out per month. Yes, there are cheap fast food deals and buffets, but you need to provide your body with the quality and quantity of food that it deserves. Processed food is often loaded with sugars, starches, and unhealthy fats. When you do the shopping, you have control of what goes into your body. Organic foods are often more expensive than conventional foods, but you will have reduced exposure to pesticides and chemicals. The choice is yours.

Summary

In summary, get your mind into the right place first, then take action to reduce expenses. We have discussed numerous practical ways to approach this, but your situation is unique, and you will have to come up with your solution. I put forth good thoughts and affirmative prayers for those reading this. Go forth and prosper!

The Decision to Buy or Rent a Home

A very neat American house with gorgeous outdoor landscape. Northwest, USA.

Buying a home has long been considered part of the American Dream. There is emotional significance to being able to say “my home belongs to me.” Also, the United States tax laws have historically been skewed to encourage home ownership. However, the decision whether to buy or rent a home is complicated and depends on several factors. First of all, consider the length of time that you will spend in your home. In general, the longer you plan to live in your home, the more sense it usually makes to buy instead of renting. Those in the military or in job situations that may be in flux might be more inclined to rent for apparent reasons. The reason for this is because of the high cost of buying and selling homes. There are many components to these costs such as commissions, title insurance, escrow fees and so on. If you move often and have to sell your house each time, these costs will drain a lot of value from your resources. Another option is to keep your home when you move but to turn around and rent it to someone else. If you take this route, however, there are additional complications that you must deal with. Property management is not for the faint of heart. In summary, a good rule of thumb is to consider buying if you plan to keep the house for at least five years.

Secondly, you must factor in the mortgage interest rate that you can get on your home loan. A lower interest rate makes buying relatively more attractive. Your mortgage interest rate depends on prevailing rates at the time of purchase, as well as your credit rating. There are choices, such as 15-year or 30-year mortgages, fixed or adjustable rates, and different amounts of down payments. You can compare mortgage rates online relatively quickly.

Next, look at your income tax situation. Because of the potential deductibility of mortgage interest and property tax, your marginal tax rate may affect the attractiveness of buying. Also, there is a tax break on the proceeds from the sale of your home in certain circumstances. Inevitably, the future income tax situation is subject to change as the political winds shift. Before the writing of this post, US income tax law was changed to limit the dollar amount of deductions that can be taken for certain property items. Check with a tax professional if you are uncertain about your situation.

The prevailing rental rates in your area can be an essential factor. If rentals are in relatively short supply, rental prices can be higher than usual. This discrepancy makes buying more attractive.

Potential future growth in home prices in your area is a significant factor in the attractiveness of owning versus renting. However, since future growth is unknown, it does add some risk to home ownership. For instance, in some areas of the country real estate values are very volatile and can drop or rise drastically over a short period. Homeownership expenses must be considered. Homeowners incur many expenses that renters do not. Some of these are property taxes, maintenance, insurance, closing costs, and improvements. If you enjoy yard work and are relatively handy, you can save money on home maintenance and improvements. You must really be sure that you enjoy this type of work as there will be plenty of it to do. The bottom line is that buying a home is a complicated decision requiring the consideration of many factors.

If you want to use a calculator to illustrate the value of home ownership versus renting, please visit www.lifeanalytics.com/buy-or-rent-a-home.html