By now we have all received the message at least once; reduce your expenditure. I’m sure many can relate to a case where you go through your expenses and realise that each of them is necessary and there is nothing you can cut to reduce expenditure. This is not a limitation of the idea of living on a budget but a sign that you are not able to discern which expenditures to keep and which ones to cut. Here we will look at 5 types of expenditure you should target when cutting expenses in your budget.

Recurring commitments

These will bleed you dry. It’s not every recurring payment that should be cut though as some are essential in life. What you are looking for are recurring payments that don’t move your life forward. Do you really need to pay-TV? These are usually small payments that add up to a lot of over the years. Whether you’re trying to get out of dire straights or want to leave a little more money for saving and investing this is a good place to start.

Automated payments

These things are a scourge and once you get into them there is no way out. Well almost. Otherwise known by the term direct debits these things can bleed you dry. Now I get that most people do this for things that are important or things that they are forced to. Automation is great but going to your banking app and making the payment instruction is empowering.  And if you “forget” to do it then take it as a sign that you are not yet ready.

Electronic payments

In the same vein as automated payment electronic payments also help you turn a blind eye to how much you’re spending. With a lot more transacting happening in US dollars you will see a lot more cash spending over electronic, which is good. Nothing reminds you of how questionable you’re expenditure is like watching a crisp $100 bill turn into a five-dollar bill and four dirty 1s.

Things you do because you can afford them

This is the one I fight with people over the most. If you’re doing or paying for something and the best reason you can come up with is that you can afford just cut that expenditure. Immediately. “I can afford it” is not only a sign of justifying a bad choice but a precursor to later finding out that cannot, in fact, afford it.

Unplanned expenses

Hear me out, unplanned expenditures are the number one killer of budgets in the world. I know what you’re thinking, how can you cut unplanned expenditure when it’s unplanned? Well, this is where developing savings and an emergency fund come in handy. Other than that you also need to learn to discern what deserves your attention and your reaction. Not everything that pops up deserves your attention.

Living on a budget is a habit and the most important thing you can do is focus on building the habit. You’re not gonna be perfect from day one and that is ok. Keep track and evaluate your progress regularly, I recommend every 7 days if you’re just starting.