Categories: Education & Reference

How to reduce expenses?

Hello Everyone!

Everybody talks of making money but no one actually talks of profits. In order to make sales, everyone needs to make some investments and this incurs costs. Our goal is to minimize this cost and make profitable money.

The most important solution is to understand: how to identify expenses? We need to see the cost which is often hidden. Some expenses are direct while some are indirect. Direct expenses are clearly known to everyone and are the ones everyone addresses of. Indirect expenses, on the other hand are hidden and not clearly known to everyone. These are the expenses uncalled for, which come out all of a sudden and are often mixed up.

Let us further classify the expenses.

Classification of Expenses:

Luxury

The most common term is luxury. These are there to make your life more comfortable. These include too much cost and there will be no harm if you avoid them.

I was just doing a research and found out that Toyota is the favorite brand of millionaires not Rolls Royce OR BMW. The difference is that rich people focus on buying luxuries last while the common man focuses on luxuries first. So, see if you can avoid this expense.

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Basic needs

These are expenses you incur to cover your fundamental needs. A need is something which enables your survival. If you go beyond this need, probably you are suffering from want.

As long as you are satisfying the need, it is not the expense we are talking of. If you go for your “want”, you become slightly greedy. Even if it does not reach the level of luxury, it still is counted among expense. I don’t recommend closing this expense but this can be delaying and frequencies can be reduced.

Just small step

Ever seen 2 fans turned on when you can easily manage with only 1? It does not mind you getting up and turning 1 fan off.

Ever tried walking distances less than 2km instead of driving? You are saving your costs of fuel and wear and tear of your automobile.

 

These are just small steps indeed but they make sense. 




  • Thinker

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    • From a simple definition of luxury as put in English Dictionary: luxury is seen as something pleasant but not really needed in life. Put in another way as something desirable but very expensive. One can reach a conclusion that most things we refer as common are not really common. When we desire to drive the most expensive car which is not really bad anyway, we must as well be able to make extra effort in terns of financial turn up. So that there will be no distinction between your need and your other wants.
      Needs on the other hand as defined in English dictionary are necessity, something indispensable. So when contrasting needs with luxuries one can be able to feel the gap between them. As rightly said by the author when you go for some thing you don't really require to have in life or at that time but because others are doing it , you are simply living in luxuries and satisfying your want.
      Therefore, let us choose to do the right thing at the right time. Thank you.

    • What a good topics, I personally love this discussion very much. We should look into our expenses or spending while trying to expand our earnings, in order to save more in our life.
      Every one is looking for earn more, but we are not realized that earn more might end up with spend more, then we might just waste our time and effort, and quality of life.
      Thus, minimalism is emerged currently, it is really good concept to alert us to look into our life , do we really need so much thing in life, especially those material one?

    • Their are many ways to reduce the cost or budget of our home. one is that do your home work your selves.We can reduce the expenditures of our home by living a simple life.

    • The best way is to live within your means.You can spend much if your earning is much, if not save some for the rainy days.What we save is so important during emergency needs.Sometimes we like to spend beyond our income, so we will dive in debts that are hard to pay for the interest keeps on surcharging.

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