Now that you’ve built a list of your non-work expenses, you’ve probably realized
that you do spend a lot of money on frivolous things. Don’t worry, I’m not going
to say “STOP BUYING FRIVOLOUS THINGS!” Everyone knows that frivolous
expenses are the things that eat away at your long-term plans - and everyone
keeps buying them anyway.

Instead, you should evaluate the areas where you feel comfortable
cutting down. In some ways, it is like a diet: if you diet too strongly, it won’t be
long before you’re laying prostrate on the couch, Sara Lee poundcake in one hand
and a 20 ounce bottle of Mountain Dew in the other. Instead, dieting works when
you make little choices throughout the day, like not super sizing a meal or
choosing to take the stairs.

Let’s get started. Take out that list of expenses that you made yesterday
along with a blank sheet of paper. What you’re going to do is go through the
entire list and think about each item a little bit, then note how much you think
you can save per week on that item.

Here’s what you do. Copy the first item to the new piece of paper, then
close your eyes for one minute and think about that item. Do you spend
too much on it? Is there a way you could easily cut down on that expense without
really feeling the crunch? Could you eliminate or drastically reduce that expense
without feeling too bad about it? Keep in mind why you’re doing this - you’re
trying to find money with which you can chase your dreams.

Here are ten quick suggestions about how to cut various kinds of expenses with
minimal impact:
• Conserve energy by installing energy efficient items like CFLs (compact
fluorescent lights), programmable thermostats, and intelligent power
strips.
• Buy fewer books by spending more time at your local library. Whenever
I have a bad desire to go to the bookstore, I just consciously go to the
library instead almost all of the time.
• Buy less music by listening to music in your collection that you’ve never
spent the time to appreciate. Instead of buying a new CD, find an older one
that you only listened to once or twice and put away.
• Buy fewer clothes by selecting items that go well with much of the rest
of your wardrobe. A modular wardrobe creates the appearance of a lot of
clothes without the need for a large clothing bill.
• Eat out less by buying a good cookbook that starts out at a beginner’s
level (try Mark Bittman’s “How To Cook Everything”) and stocking your
kitchen well.
• Reduce insurance by calling your insurance carrier and looking at
raising your deductible.
• Reduce your credit card payments by calling your credit card
company and requesting a reduction in your interest rate.
• Reduce your bank fees by looking into no-fee or low-fee options at your
bank - or at other banks.
• Reduce your cable bill by eliminating unwatched premium channels or
looking at other basic package options - or even consider eliminating it
altogether.
• Reduce your car payments by ending the leasing cycle and buying late
model used cars instead.

For each item that you decide you can effectively reduce the cost of, estimate
realistically how much you might save in a year doing this. Estimate
your savings low; you’re always better off with flexibility.

Once you’ve done these estimates, rewrite your overall cost list with the
spending reductions calculated in, then divide each element by 52 to see
how much that is per week. You should see a decent reduction in your living
expenses. What will that translate into? More money that you can spend on your
dreams - and fewer years until you get there.

Tomorrow, we’ll see how much time we’ve saved - and what that means for the
bigger picture.