To Spend, or to Cut? 4 Questions to Help You Avoid Unnecessary Expenses

Consider your material and emotional values to decide which expenses belong in your budget.

It’s a universal truth: For most people, budgets only have room for so much. Juggling the cost of that summer vacation you’ve been taking for 10 years with the pressing need to help pay your child’s college tuition, actually use your pricey gym membership or fix your faulty water heater is no easy feat. Sometimes, something’s got to give. But how do you decide which expenditures are worth making and which ones you should cut?

Eliminating unnecessary expenses may depend on your personal priorities.

Figuring out when to spend and when to cut—and how to avoid unnecessary expenses—depends on your personal priorities. But the following four questions will help you weigh each spending decision and choose the best option for you:

1. Is it more than you need?

During a recent family budget meeting at Rosemarie Groner’s house, the hot topic was … wait for it … paper towels. Every week the personal finance blogger’s family sits down to review how they can reduce unnecessary expenses. When their giant pile of paper towels came under scrutiny, Groner, whose blog is called The Busy Budgeter, admits they were skeptical of the wisdom and sanitation of reducing their use of paper towels. They worried about the risk of spreading salmonella and other germs, for one thing.

cut back in other areas to reduce unnecessary expenses. Travel provides the opportunity to explore different places and cultures, experience personal growth and reflection and create long-lasting memories with loved ones—all worthy outcomes.

Let’s say it’s not travel you’re pondering in your quest to avoid unnecessary expenses, but the generous line item in your budget for events like concerts, plays or museum visits. Can these things get expensive? Sure. But you may decide that the enrichment of the arts is valuable enough to continue this spending.

Investing in your education can pay off in the long run, so don't assume it's a cost you can cut to avoid unnecessary expenses.

Likewise, an investment in your education—earning a degree or taking a few classes to boost your credentials and increase your earning potential—might also be a worthwhile expenditure. In 2016, for example, the median weekly earnings for workers with a master’s degree were $1,380, compared to $1,156 for those whose education topped out with a bachelor’s degree, according to the U.S. Bureau of Labor Statistics—a difference of more than 19 percent. Professional degree earners had a nearly 51 percent pay advantage over those at the bachelor’s level.

3. When’s the last time you used it?

While some experiences are special enough that you wouldn’t want to miss out on them, there might be others you rarely use even though you’re continuing to pay for them. When eliminating unnecessary expenses, watch out for automatically renewable charges on gym memberships, magazine subscriptions and retail subscription services (including for fashion, cosmetics and food preparation kits) that continue even when you no longer want them.

Ditching a gym membership you don't use is one way to reduce unnecessary expenses.

That’s a favorite hack for eliminating unnecessary expenses from Sami Cone, a Nashville-based speaker, author and finance blogger. Cone, who discusses money-saving tips on her website and hosts a radio show called Family Money Minute, recommends putting a reminder on your calendar at either the beginning or end of each month to check your statements for expendable services and subscriptions.

Similar to those subscriptions you haven’t used in ages, are there items you purchase by habit that you or your family no longer want or need? A useful way to avoid unnecessary expenses is to take your spending off autopilot. Possible signs you need to do this stat include: You’re paying for music and dance lessons your children skip more often than they attend; you buy extra phone and data services you never use or premium cable channels you never watch; you’re frequently replacing dietary supplements and cooking spices that have lingered on the shelves past their expiration dates.

4. Will you save later by spending now?

Sometimes the best way to reduce unnecessary expenses in the long run is to invest in what seems like a big expenditure now. Upgrading your home’s heating, ventilation and air conditioning system to a more energy-efficient model, for example, might be a smart way to splurge because it can save you money on your utility bills. According to the U.S. Department of Energy’s Energy Star program, replacing a central AC unit that is more than 12 years old with an Energy Star-certified AC unit could trim your cooling bill by 30 percent.

Another example of a major expenditure that can pay off later is investing in quality home furnishings instead of choosing bargain goods. The higher-end products may save you more in the long run because they are often more durable so you won’t have to replace them as soon. Making healthier, if more expensive, food choices now can also potentially help you avoid medical costs related to illnesses like diabetes, high blood pressure and heart disease.

Stay motivated to reduce unnecessary expenses

Having a specific financial goal in mind when you set your spending priorities is an important source of motivation when you’re trying to avoid unnecessary expenses. Groner says her family is now out of debt after paying off more than $30,000 from credit cards and car loans with the help of their frugal spending habits.

Stay motivated by keeping track of how far you've come since you first started eliminating unnecessary expenses.

“In the beginning, when we were first trying to reduce our expenses, the reward was the relief to sleep at night without worrying about living paycheck to paycheck,” Groner says. “We kept going even after we left the paycheck-to-paycheck cycle because then budgeting became fun. It wasn’t about deprivation anymore. It was about laying out a path to get whatever we want in life.”

Cone, whose family used plans for a Disney vacation as an incentive to reduce unnecessary expenses, says it’s important to choose an objective that everyone in the family can get excited about. That way, when eliminating unnecessary expenses starts to pinch, you can remind them: “We’re saying ‘no’ now, so we can say ‘yes’ later,” she says.


Are You Making These 4 Common Budgeting Mistakes?

If these budgeting pitfalls sound familiar, there are steps you can take to get your finances back on track.

If you’ve blown your budget before, you might end up thinking that budgeting just isn’t for you. There are common budgeting mistakes that could impact your financial progress, sure. But many have simpler fixes than you think.

Before jumping ship at the first sign of difficulty, know that creating a budget—and sticking to it—is a skill. And all skills take time and effort to master.

What are some common budgeting mistakes? To get on the right track, review these common budgeting pitfalls and budgeting hacks:

1. You’re not motivated

If you’re considering budgeting mistakes to avoid, know that you’re less likely to stick to a budget if you don’t have clearly defined financial goals. You’re more likely to commit to your budget and be disciplined in your spending if you’re working toward a specific milestone.

“I initially created a budget because everyone said it was the responsible thing to do,” says Chonce Maddox, the personal finance writer for a blog that focuses on eliminating debt and budgeting. “After a while, I started to resent my budget because it felt like it was keeping me from doing the things I wanted to do.”

One of the biggest budgeting pitfalls is not having a financial goal for motivation.

Her “aha” moment came when she realized she actually did have motivation to start budgeting: She wanted to get out of debt. “At this point, I realized I wanted to budget, and it helped me be consistent with planning my spending,” Maddox says. She ended up using a budget to pay off more than $30,000 in student loans in less than three years.

Elle Martinez, the founder of a relationship-focused website and podcast, had a different money motivation with her significant other: to live off one income and save for big financial milestones with the other. Any essential expenses (think housing and food) would be covered by their first income, while the second would go toward traveling, paying off debt and starting a business. “This goal has been a huge factor in staying consistent with our budgeting routine,” Martinez says.

Fix: Pick goals that will inspire you

Do you want to pay off those student loans once and for all? Save for a down payment for your dream home? Travel around the world? To avoid this common budgeting mistake, write down the goals that make you tick and how much you’ll need to save to accomplish them. When you’re tempted to stray from your budget, review your goals for the motivation to stay on course.

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2. Your budget is not realistic

One of the biggest budgeting mistakes to avoid is being unrealistic about your spending. Under-budgeting in some or all of your spending categories may leave you with less money than you need to allocate toward your needs. If you chronically under-budget and then spend more than you intend, you could get discouraged with budgeting altogether.

Maddox admits that she encountered this budgeting pitfall and failed to be realistic when she started to budget. “I was comparing myself to others and creating a ‘realistic’ budget based off of their lives,” she says. “That fell through quickly because I wasn’t being honest with myself about my situation, my spending habits and my own goals.”

Fix: Track, then adjust

If this budgeting pitfall is holding you back, consider using a budgeting and spending app to help you aggregate your spending across bank accounts and credit cards. You can connect your financial accounts to a budgeting app and get regular reports of your spending in different categories. You can then begin to adjust your budget and cut back in categories as it realistically makes sense for your lifestyle.

Maddox’s process of cutting back was simple after she began tracking her spending. “I realized that I couldn’t spend so much on things like going out to eat, so I learned to cut back by cooking at home,” she says. “I do like dining out at times, but I had to keep it to a minimum.”

3. You don’t account for every expense

Leaving things out of your budget is another budgeting mistake to avoid. Let’s say you have a family reunion coming up. In the past, maybe you relied on “winging it” when it came to paying for one-off costs like transportation and accommodations. But without incorporating these costs into your spending plan, you risk having to dip into other budget categories (goodbye, streaming services) or falling short on other goals.

Since your spending habits will likely change based on different life circumstances, you’ll need to regularly review and adjust your plan to avoid this budgeting pitfall.

Fix: Review and revise your budget

Martinez, the founder of the relationship-focused website and podcast, has a specific way of handling budget revisions with her husband to avoid this common budgeting mistake. “We have ‘money dates’ where we discuss our spending plan and any changes we might need to make to it,” she says. “Most couples forget that yes, we do have steady expenses, but we also have things that come up—trips, weddings, school, etc.”

Rather than omitting special events or irregular occurrences in their budget, Martinez and her husband make sure to capture every possible expense related to these spending “anomalies” when they have their budget reviews. “Once we do that, we can make adjustments in other categories or in other months to make sure the money is there and ready to go when we need it,” she says.

Some common budgeting mistakes include not being realistic about your spending and not accounting for every expense.

To avoid this budgeting pitfall, take time to figure out any future expenses that don’t fall into your regular spending patterns, and decide how much you need to save for them ahead of time. It can take time and practice to anticipate every expense imaginable, but it will be worth it to keep your budget as accurate as possible. You can also start an emergency fund to help cover unexpected expenses.

4. Your budget is too restricting

While it’s helpful to have an accurate budget, having one that is too restricting is actually a budgeting mistake to avoid. It’s possible that your willpower will wane as you try to cut things out. There’s even such a thing as “frugal fatigue.” Just like you can’t diet restrictively or engage in other extreme activities forever, you can’t expect to stick to a hyper-strict budget long term without burning out. Long periods of restriction can be both demotivating and tiring.

After a while, people tend to bend under the pressure of trying to meet perfection. If you remain extremely strict with your spending, you could go on a spending binge under the pressure.

Fix: Celebrate financial milestones

To combat frugal fatigue and this common budgeting mistake, be sure to celebrate what you’ve accomplished. Of course, you don’t want to indulge in anything so extreme that it sets you back financially, but you should make room in your budget to recognize financial progress and reward yourself accordingly. It could be something as simple as buying your favorite ice cream after reaching a saving milestone.

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