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Smart strategies for minimizing expenses

Cut spending and save more by incorporating these tips into your financial routine.

The inflationary environment of recent years has many seeking new ways to streamline their finances and reduce expenses.

A strategic, holistic approach to spending can help maximize your savings and investment opportunities — without compromising your lifestyle. Your Ameriprise financial advisor will provide guidance on balancing expenses, income and savings to help you reach your long-term financial goals. 

In this article:

  1. Track your expenses and create a budget
  2. Align discretionary spending to your values
  3. Audit necessary fixed expenses to find hidden savings
  4. Keep essential variable expenses in check

Track your expenses and create a budget

Tracking and understanding your spending is foundational to identifying opportunities to trim costs. You can do this by reviewing your bank and credit card statements (or using an app to view your expenses) and then creating a budget to put guardrails around your spending.

Advice Spotlight

Strategic expense management can help you reach your financial goals faster.

Your household spending can act as a tailwind (or headwind) to goals such as retirement, paying down debt or homeownership.

Align discretionary spending to your values

Discretionary expenses are items and services that you want but don’t need. As you track these expenses, identify what’s most important to you. Keep those expenses that you value, but rein in those you don’t.

For example, maybe you highly value the convenience and community of buying coffee at your local café. On the other hand, perhaps you don’t use your gym membership much because you prefer to exercise at home. Being mindful about these preferences, values and habits can help you find ways to save.

Here are opportunities to consider:

  • Scrutinize subscriptions and memberships. Are you getting the most from your gym membership, streaming services, cable TV, magazine subscriptions or other items that are automatically billed each month? If not, consider canceling or temporarily pausing them. If you find yourself missing them, you can always resume them later.  
  • Dine in more often. Dining out adds up quickly. Reducing your restaurant expenditures can be an effective way to ease spending.
  • Find ways to do what you love — for less. As you identify what discretionary spending you value most, consider how to fund those things for less. For example, smart travel strategies — such as vacationing in the off-season or driving instead of flying to your destination — can help you experience new places and cultures for less. Or if you prioritize eating out, explore less expensive restaurants.
  • Delay non-urgent purchases. For example, maybe you want but don’t need a new car, but due to other pressing goals, it may be worth waiting.

Audit necessary fixed expenses to find hidden savings

Fixed essential expenses are necessary expenses, such as a mortgage, that cost the same amount each month. However, in some cases, fixed expenses may fluctuate. A little research could reveal savings opportunities.

Here are opportunities to consider:

  • Negotiate better insurance rates. Contact your health, auto and homeowners’ insurance providers to find discounts or adjust your policies to better meet your needs. Over the years, your insurance rates can rise significantly. It may be time to shop around and switch carriers to get a better deal.
  • Check for fees on unused services. Analyze your phone, internet and cable TV bills to see if you're getting services you don't need. If so, contact your service provider to have them removed.
  • Review your bills for payment errors. If you're not watching your expenses every month, mistakes can easily happen. For example, look for double billing oversights, instances of overpayment or incorrectly timed recurring payments that are causing late fees.

Keep essential variable expenses in check

Essential variable expenses are those necessary goods and services that can change month to month.  For example, groceries, transportation and utilities can fluctuate widely depending on external economic dynamics. Where possible, it’s wise to keep this spending in check.

Here are opportunities to consider:

  • Comparison shop: Whether purchasing groceries or gas, it’s smart to continually shop around for the most competitive prices.
  • Conduct preventive maintenance. Keeping your heating and cooling systems in optimal condition can help reduce utility bills. Likewise, regular automobile maintenance can help avoid costly surprise repairs or replacements.

Minimize expenses to maximize savings

Your Ameriprise financial advisor will help you identify potential opportunities in your budget to save more toward your financial goals.

How can I save more toward my financial goals? Where should I allocate excess savings in my budget? How does my investment portfolio account for inflation?

When you’re ready to reach out to an Ameriprise financial advisor for a complimentary initial consultation, consider bringing these questions to your meeting.

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Stay on track to your financial goals with the help of an Ameriprise financial advisor.

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At Ameriprise, the financial advice we give each of our clients is personalized, based on your goals and no one else's. 

If you know someone who could benefit from a conversation, please refer me.

Background and qualification information is available at FINRA's BrokerCheck website.

Ameriprise Financial cannot guarantee future financial results.
The initial consultation provides an overview of financial planning concepts.  You will not receive written analysis and/or recommendations.
Investment products are not insured by the FDIC, NCUA or any federal agency, are not deposits or obligations of, or guaranteed by any financial institution, and involve investment risks including possible loss of principal and fluctuation in value.
Securities offered by Ameriprise Financial Services, LLC. Member FINRA and SIPC.

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