Ways to cut down your monthly expenses

It’s kind of an old-school approach to cutting expenses, so old that some people have forgotten about it. Maybe it’s time to bring back the envelope system.

Once you’re organized, you can divide your [home page] paycheck by category: entertainment, gasoline and food, for example. Decide how much money you’re willing and able to spend for each category. 

Put that amount of cash in the correspondingly addressed envelope. When your entertainment cash is gone you can’t swipe a debit or credit card. If you’ve nearly spent the cash in your gasoline folder, you avoid taking that last-minute excursion out of town.

How does the envelope system cut your monthly expenses? By erasing the illusion created by that plastic in your wallet that there’s always a little extra that can be spent. An envelope doesn’t have an expanding and tempting credit limit. When it’s empty, it’s empty.

You’re organized and you have discipline now you want to find ways to get the most bang for your limited buck. You could avoid eating out altogether, but that provides an opportunity for you to socialize with friends and family. So, what do you do? You certainly don’t need to go hungry.

Portion sizes are increasing at restaurants. Often, you’ll get more food than you could ever eat. Consider ordering a la carte. For instance, rather than getting the three enchilada, two taco combo with a side of beans, order a burrito and eat the chips that are provided instead. It could save you as much as 50 percent on your main course.

Speaking of the main course stick to it. Appetizers, desserts and alcoholic drinks are the big profit categories for most restaurants. Drinks of any kind will add a couple of dollars to your bill. By some estimates, a £2 glass log book lending of iced tea actually costs the business two cents [source: Howard]. That’s an enormous profit margin that will cost you. A glass of water is not only better for you, but it could easily save you £25 a month, too.

Do you love books and movies? There’s a great way to keep the entertainment and information coming while cutting the expense.

Lending libraries (as they were first called) were a source of controversy when they were introduced in the 19th century. Publishers were concerned that they wouldn’t be able to make any money if books were simply loaned out for free. Fast forward more than 150 years and it’s clear that the entertainment industry is still making money despite the availability of free books, movies, music and even video games. However, many people still don’t take full advantage of their neighborhood library.

You may have to wait a little while for a new release but, otherwise, you can access an evening of fun for your kids or yourself without spending a cent. Just think about the savings opportunity if you were to buy a novel for £20 or £25, you’d be lucky to get a £5 return even if you sold it to a discount bookseller. But it’s on loan at your local library for free.