Earn More Money by Cutting Expenses

It’s entirely possible to earn more money by cutting expenses.

I have heard from so many people that are unhappy with their current financial situation. Do you know what they always think they need? More money. But, from my viewpoint, their financial woes are typically due to an expense problem, not an income problem. If you find that you’re bringing in less than you’re earning each month, sometimes the best way to correct the problem is to cut out some of your unnecessary expenses.

source: aarp.org

Get Rid of Your Smartphone to Earn More Money

My friend is really trying to correct her financial situation, and I commend her for that, but she is still blind to many of the expenses that could easily be corrected and bring her back into the black each month. Her biggest stumbling block (in my opinion) is her iPhone5 that costs her $112 a month. She told me that she WILL NOT switch plans because she doesn’t want to lose her unlimited data plan.

First of all, how many of us really need data plans? I bet if we really had to, we could all survive on a track phone and buy prepaid minutes. Sure, it would suck for a while, but it would save us about $100 a month, which translates into $1,200 a year. That’s a serious chunk of change!

If you really can’t do without texting or the data plan, there are other providers that might work in your area. Sure, you might not be able to get the most awesome phone on the market, but you’ll be paying $55 a month instead of $112. That’s a huge difference.

How Many Songs Do You Have On iTunes? Cut That Expense!

Apple is a brilliant company. They understand that people might stop for a moment to think about paying $15 for an entire disc of music, but when songs are just 99 cents, who cares? It’s practically nothing compared to our income, right? But, when you look through your playlist and discover that you have 1,000 songs, guess what, you’ve paid $1,000 for that list!

You know what I do instead? I listen to Pandora, it’s free and I hear most of the songs that I want because I just make a genre that caters to what I want to hear. If I really want to hear a specific song, I just pull up YouTube. I can listen to every single song that you can and it cost me $0 vs. your $1,000.

Eat At Home to Cut a Huge Expense & Earn More

Yes, I get it, making meals takes time and it’s not that fun. But, on average, it costs about 30% of what it would if you went out to eat! You could make a large batch of chicken or fish at the beginning of the week, keep the leftovers in the refrigerator , and eat for cheap while saving time in the process!

Find Your Unnecessary Expenses

No matter who you are, I’m sure you have expenses that could be cut out of your spending. We may think of them as necessities, but when you look at them with an objective mindset, you’ll soon realize that they’re actually just luxuries that you thought you needed, but don’t.

Have you earned more money by cutting expenses?

Time Periods for Budgeting

When I first started out budgeting, I started budgeting my money on a monthly basis. My mom sat down with me after high school when I was planning on moving out, and helped me construct a budget based on my monthly income. I think this is the way that she always did it, so it never occurred to me to instead budget on a bi-weekly basis, or that any other time period for budgeting would work.

source: moneymanagement.org

Many people budget on a monthly basis, but then some also budget on a biweekly basis. Here are some pros and cons of each method to help you decide what would work best for you:

Monthly Budgeting

Budgeting monthly is by far the most common practice. This is common because:

Bills, payments, and other expenses are usually issued monthly
Bank statements are usually released once per month
Commission cheques and other ‘bonuses” are usually issued monthly for those who have a fluid compensation structure
Debt payments are usually due on a monthly basis

Because of these norms, people tend to add up their income and budget on a monthly basis. It can be a lot easier and requires far less math and exceptions than some of the other methods.

Bi-Weekly Budgeting

I started budgeting on a bi-weekly basis as well as a monthly basis because I am paid bi-weekly. This way I know which part of each cheque needs to go where. Here are some advantages:

Most people are paid on a bi-weekly basis
The time period is shorter and therefore allows for easier adjustments as needed
You are less likely to forget about cash output when tracking your spending and comparing to your budget at the end of the period

Some disadvantages exist for bi-weekly budgeting as well:

Since bills, payments and other financial responsibilities tend to come out monthly, you may have to either split them or do some fancy math, otherwise your budget will be unbalanced
You may have to rely on memory when tracking spending at the end of the two weeks because bank statements, if you rely on them, come out monthly

Quarterly Budgeting

Some people also budget quarterly. This may work best for you if you have an irregular income, because that way you can average it over three months instead of change your budget each month depending on what comes in.

This may make your budget inaccurate, however, because over a period of months many costs can fluctuate drastically (ie gas prices, bills).

Yearly Budgeting

I’ve yet to come across somebody that budgets on a yearly basis, but one large disadvantage of doing so would be that yearly budgeting would make it very difficult to anticipate changes to your budget, or changes in priorities.

Do you budget on a monthly basis like me, or take a different approach?

New Wireless Company Code of Conduct for Canadians

I was 18 when I signed a three year wireless contract with Rogers, fraught with anticipation and excitement over getting a “free” phone for only three years of my life.

This was prior to smart phones being a thing, really, so this contract was no big deal. It cost me $25/month and I was happy, because it had unlimited texting and that’s really all I ever did.

The iPhone came out shortly thereafter, but most people that I knew still had a traditional cell phone. Then I turned 21.

We were moving to the Lower Mainland and I wanted a fancy ne w phone to go with it, so we extended our contract another three years so I could get an iPhone 3G for only $200, instead of the full-price of $700. I was ecstatic to have a new phone, until I got my first bill.

With data, text, and regular wireless phone service, my bill clocked in at over $80/month, which was a huge shock for me. The plan was supposed to be $55, but of course Rogers tacks on a bunch of extras.

After awhile, I was practically begging to be released from my contract, but was told that it could only happen by paying $25/month cancellation fee until the end of my contract, which would have rendered the cancellation almost pointless.

When my contract finally ended, I was so relieved and J and I made a pact ever to sign a contract again.

The Canadian Radio-television & Telecommunications Commission will be imposing new rules now for all providers starting in December, 2013.

The best of the many rules and regulations that the Commission will be slapping down on the table to protect consumers is the ability to cancel – for free – a contract after 2 years. While you can still be contracted for three years, should the consumer decide after two that they want to be let out of a contract, they can be.

But what will this mean for your finances, Canadians?

Chances are, the telecommunications companies will not take this lying down. They’ve gotten used to taking advantage of locking people into high rate, long contracts that they can’t get out of. They can raise rates without people leaving, because they simply can’t.

I have a hunch that this will mean an increase in rates for most Telecommunications companies, either for their hardware, or the service itself.

The good thing is that the Commission is also capping costs of data, both local and international. Have you ever accidentally left roaming on when you went across the border? I did once, and it cost me over $125. The new rules cap that amount at $100 ($50 for local) to prevent sticker shock when you get your phone bill. Unfortunately that’s still a lot of money, but at least you won’t be getting a $700 phone bill.

There are various other aspects to the new law, but these are the most notable.

Will these new rules change the way you use your cell phone?

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