Financial Literacy Month – Tip #29

We have come full circle and are back to where we began Financial Literacy Month on April 1! Starting the month, the first two tips were to track expenses for 30 days and gather February bank and credit card statements. Now, it is time to compare the two months of expenses. This tip will help highlight unnecessary expenses to eliminate and reveal additional areas to trim expenses.

Start by creating two categories, essential expenses and optional expenses and itemize expenses for each category. Next add five columns with the following headings: February, April, Savings, Trim, Eliminate. Note total expenses for each month in the appropriate columns, note the savings for the two months, and determine if you can trim or eliminate the expense. Below is a sample chart to get started:

ESSENTIAL EXPENSES FEBRUARYAPRILSAVINGSTRIMELIMINATE
Mortgage / Rent$$$$$
Insurance$$$$$
Auto Loan$$$$$
Credit Cards / Student Loans$$$$$
Utilities (garbage, water)$$$$$
Cell Phone$$$$$
Groceries$$$$$
TOTAL$$$$$
OPTIONAL EXPENSES $$$$$
Lunch / Dining Out$$$$$
Morning Coffee$$$$$
Gym Dues$$$$$
Memberships $$$$$
Movies / Events$$$$$
Shopping$$$$$
Housecleaner$$$$$
Kids (sports, apps, parties)$$$$$
TOTAL$$$$$

Throughout the month tips were shared on how to trim expenses. Compare the amount you paid in February to the amount you will be paying and add up the savings (one person I spoke with saved $2,000 a year by making the recommended calls). If you missed the tips, scroll down for the full month of tips.

Additionally, most optional expenses have been eliminated or significantly reduced during shelter-in-place. These little expenses can add up to costly annual expenses. Now is the perfect time to determine which of these expenses can be trimmed or eliminated going forward.

Shelter-in-Place has forced us all to hit the financial reset button. Taking the time to complete this monthly comparison, and trim and eliminate unnecessary expenses will help you reset financially and come out quarantine with a healthier financial mindset! 

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