LIVING EXPENSES? In this video we are going to talk about how
to reduce living expenses and why it is much easier than growing your income, let’s drive
right into it! So in our simple financial cash flow, we are
going to have two main columns, Input & output, input is where you are bringing money in and
output is where your money is going out (also known as expenses) we will focus on the output
column to see how we can better improve it and reduce our expenses. Let’s think about this for a minute, what
are our biggest expenses that takes money out of our pockets? Well, for most people
this is going to be housing, transportation and food. It makes sense to look at where
you are spending most of your money to try and tackle the issue at its core right? Let’s start by looking at housing,
Well for the ones who are lucky enough to still be living with your parents, luckily
for you this is free so you can go ahead and ignore this part for now. For the rest of
us, let’s say you are renting a house for $500 per month, this means you are spending
a total of $12,000 per year just on housing! Back when I was in University the average
cost of rent was probably around $500 per month, but this was the very first thing I
look at to save money on because I knew how much it could of ended up saving for me. My
main requirement back then for a house to rent was mainly the cost as I knew that I
didn’t need a massive house with massive rooms to live comfortable. I ended up opting
for a fairly small room for $400 each month saving $100 each month which added up to saving
a total of $1200 a year! Simply spend some time scouting for the best
possible house deals and possibly consider downsizing your current living conditions
and you could be saving a lot more. Transportation
If you happen to have a vehicle, you may be spending anywhere from $50-200 just on gas
and this doesn’t even include any additional fees relating to your vehicle. Let’s assume
that you are spending $120 per month on your vehicle, this adds up to $1440 per year. You
could easily be saving anywhere from $300-500 per month just by choosing a vehicle which
is more gas-efficient. Think about whether you really need a super flashy car or a truck
which eats up so much of your expense each month. Another option which I personally opted
for was a mountain bike during my university time which I bought from a bike charity shop
that sells 2nd hand used bikes for $200. By doing that I easily saved over $1000 just
on fuel consumption, not to mention the free exercise which I gotten out from it as well. Food:
Now once again the amounts you spend on food varies greatly but let’s assume that you
are spending around $400 per month on food, this means $4800 a year. To save on food,
the best way to go about it is to buy food in bulk and look out for special deals and
offers. Now I will admit that I am health and fitness advocate and I generally eat fairly
healthy year round, and you can certainly eat healthy and still maintain a low cost
to your food expenses. By buying chicken, frozen vegetables, rice all in bulk I was
using around $200 per month this meant another $2400 saved per year. We can see that just from reducing your expenses
it is possible to save a lot of money, the examples and figures I have given can differ
greatly for each individual and was provided to give you a vague idea on how much you can
really make a difference by making little adjustments to your expenses (in my example
I would be saving more than $4600+ per year) which I plan to put mostly into my investments.
There are so many more ways to save that I haven’t covered in this video but I hope
that you have found this video helpful and I wish you all the best in your savings plan.
Comment down below on your expenses and how you are saving money, that’s all from me
for now; see you all in the next video!

About the Author: Michael Flood


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