Reducing Expenses and Closing Accounts for a Simple Budget

Simplicity in Making Financial Decisions for Success

Review Your Expenses and Close Accounts

One of the first steps in simplifying your budget is to review your bank statements and identify all your expenses. Divide them into “non-essential expenses” (like unused subscriptions) and “essential expenses” (like utility bills) so you can make decisions about cutting costs.

Check for Unused Subscriptions or Forgotten Recurring Expenses

Your bank statements will help you understand exactly what you are spending on. You may discover that you’re paying for things you don’t use or want. For example, you might find that you subscribed to a gym, an online newsletter, or a meal service that you can live without. Highlight these items and start a list of accounts that need to be closed.

Identify Your Essential Expenses

Once you’ve trimmed down items you can live without, turn to your essential expenses. Identify every necessary expense you regularly spend on, such as:

• Rent
• Mortgage payments
• Transportation
• Food
• Clothing
• Utilities
• Insurance
• Taxes
• Medical treatments

Closing Accounts

Having multiple accounts takes time and increases your expenses with extra fees. Companies often encourage people to sign up for subscriptions and recurring payments, so it makes sense to upgrade our services beyond what we actually need. Set a date to review all your accounts at least once a year and cancel accounts you no longer use, whether it’s a streaming service or a store credit card.

Consider What to Do with Extra Money

After identifying ways to save expenses by cutting costs and closing accounts, you can plan what to do with this extra money. Here are some options:

• Pay off debt
• Contribute to an emergency fund so unexpected expenses don’t disrupt your budget.
• Direct it towards saving for a vacation or another major purchase.

Frequently Asked Questions (FAQs)

What can you do to improve your budget overall after cutting unnecessary expenses?

How can you explain cutting expenses to your children?

What should you do if your partner is in debt and does not want to cut expenses?

Source: https://www.thebalancemoney.com/cutting-expenses-and-closing-accounts-for-a-simple-budget-5213233

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