In our previous post, “How to raise money for your start up” we discussed the importance of keeping your cash flowing into your bank account to keep your business standing up. But the fact is, it’s a two-way process. sooner or later money is going to flow out of your pockets . It’s part of life. And there’s always that possibility that the money flowing out is more than what comes in. When this happens, you’re in big trouble.

So what can you do? In this post, you will learn how to bring your expenses down. Even if we can’t do something about money flowing in, we can always control how much goes out.

Live below your means

For most of us this is difficult to do. But it’s pretty simple if you think about it. It’s always difficult the first time. You just need to change your way of thinking. Here are some benefits that might encourage you to live below your means:

• Savings.

First, you build up some savings in your savings account. This enables you to roll through some emergencies. You’ll be able to think about saving for retirement, or prepare for your children’s college education. It’s always comforting to know that whatever happens, you have money to spare to help you when the situation calls for it.

• Pay off debts.

Living below your means allows you to free up a certain amount that you would’ve otherwise spent on a new pair of shoes to pay off some debts. These debts begin to disappear in no time. Once this happens, your monthly bills become more manageable, thereby giving you more options to use the extra money that you now have.

• More freedom.

When your debts are gone and you have more money to spare, you begin to think of other things to spend your time and money on. Worthwhile things I hope! You begin to explore other possiblities that you didn’t think were there before. You now have the financial freedom to do the things that you really want.

• Welcome to a happier you.

When you have peace of mind, your stress levels go down. Knowing that emergencies, your business, and your debts are covered will help you sleep better. When you sleep better you get healthier. When you’re healthier, you enjoy life more. And when you enjoy your life more, you become happier. Isn’t life all about that?

Bringing down those expenses!

So how do you do it? Here are some tips.

• Review

Write down ALL of your expenses and read through all of them. Then ask yourself if you really need this kind of service at all? Do you really need this plan for your cellular phone or do you need to change to a lower plan? Do you really need this kind of expense? Be honest with yourself. I know that some of these expenses are really tempting to keep, but they may be giving you problems more than benefits. But if you really need to keep something as it is, then by all means. But I’m sure there is something that you could either lower down or take out all together.

• Keep track of your expenses.

Be diligent when it comes to keeping track of any spending. It helps if you list them down in a notebook or better yet, use the computer (like Excel) to list everything down. Keep official receipts. By doing this you can clearly see where your money is going.

• Keep track of yourself.

Since you control expenses, it is best to keep track of yourself. Yes, you read it right. You. What are things you buy regularly? Is it a daily thing? If it is, could you afford to cut-off at least a dollar or two? Do you bring your laundry to the laundry shop? How much will you save if you do your laundry at home? Do you eat out a lot? Everyday? Could you afford to eat at home? Try to get to know your spending habits more. You’ll be surprised at what you discover.

It gets better over time.

I know. It’s quite difficult to bring some of those expenses down, especially if you’re already used to the things you enjoy. Don’t get me wrong. I’m not saying that you should change everything dramatically. Of course you shouldn’t! And that’s crazy. In everything, always apply discretion. It’s always better to start small and slow and then build up over time. Controlling your expenses needs time to master. It’s possible and more people are doing it nowadays. the question is will you do it? Whether you’re in a job or in business, it doesn’t matter. What matters is that you start. At least start somewhere.

Your thoughts

What do you think? Do you want to add something on how to bring your expenses down? What were your experiences after deciding to finally do it? What can you advise others?

Let us all know in the comments!