personal-budgeting In difficult and bleak times, people tend to hound the internet on ways to trim down their expenses. One method which may work for one person, may not work for others. I’d like to share you some thoughts that I’ve noticed a long the way in this circle of life.

1. Annualize your expenses – my former colleague take the cab everywhere she goes. That’s like RMB 10, one way at least for 30 days which is RMB 300/month or RMB 3600/year. When I told her about it, she was shocked to know how much she’s spending on cab fares alone. Trying to get the big picture makes you realize if something is worth it or not.

2. Don’t incur debt – it’s easy to say but hard to do. I learned this the hard way. My dad tend to borrow money to pursue an interest hoping it would earn money in the future. However, after a few months, circumstances change forcing him to leave this interest. He incurs debt that he cannot pay and tend to borrow money from family and relatives. So, I vow to myself never to incur debt or if I borrow something, I had to pay it right away. If I wanted to buy something, I’ll save up some money to pay for it.

3. Credit card is not for everybody – credit cards can be good and bad. It’s good that you don’t need to carry cash, you earn points in exchange of miles or gifts and you have at least 15 days to pay your purchase in full. Credit cards become bad if a person cannot stop buying something and has difficulty in paying. Some people have multiple cards which they use to pay off the other cards bill. It’s a vicious cycle that is never ending and difficult to get out of. It is never good to borrow money from credit cards.

4. Purchase something because you need it and not want it – it’s difficult sometimes to differentiate wants and needs. When people have money, the first thought which enters their mind is what they want to buy with it. I have a friend who loves shopping and sometimes purchase more than she can pay. She said she needs it but you can see she just want it. If you plan to buy something that you want, pause and reflect if you really need it.  It doesn’t help your pocket if you buy unnecessary things.

5. Carpool, cycle or take public transportation – As fuel prices hit record highs, it is not practical to use the car daily if you drive just by yourself. Also, you won’t help the environment by polluting the air. If you can, cycle to work as it’s exercise and will help you keep fit. No need to go to the gym!

6. Rent it – if you only plan to use something once or twice, rent it rather than buy it. It will help you save money and keep you from cluttering your place.

7. Attend garage sales – a garage sale is a good place to hunt for bargain stuff, gifts or household items that you might need. It is cheap and practical. In Beijing, every June and December, a lot of expats who are studying leave the country to go back home. Most of them have a lot of stuff which they bought and will sell for a fraction of the cost as they can’t bring it home. That’s the best time to hunt for items that you need for a discounted price.

8. Don’t go for branded/luxury items – A lot of teenagers and young adults tend to buy items which are well-known and branded. They tend to follow trends and purchase something which they would only wear once or twice. There are items which purchasing a well-known brand is good such as electronics and appliances. However, branded clothing and accessories will definitely dent and empty your pockets.

9. Cancel your gym membership – you don’t need to go to the gym to do aerobics or running. Buy yourself your own weights or buy a video which you can follow along every day. Try running at the park, who knows maybe lady luck will lead you to your better half.

10.  Make a budget and stick to it – this is the hardest to do but once you start it and discipline yourself, it will help you save a lot of money and headache in the future.  You can keep track where your money is going which in return help you to plan for the future.

11.  Eat at home, before you go shopping – it will help you save some money as cooking and eating at home is cheaper.  Also, bring a bottle of water to quench your thirst while shopping and go home before dinner so you don’t need to eat out as well.

12.  Have a goal – as my sister said on her comment, you should have a goal.  If you don’t have one, make one and discipline yourself to achieve it.  Start small but keep in mind that what you save monthly will go a long way in the future due to compound interest.

There are more tips out there but these are just some of what I’ve been doing in my life. I’ll add some more along the way to help you trim down your expenses.

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