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12 ways to reduce costs in your monthly budget

12 AUGUST 2023
Dicas Portugal Despesas
Nous vous proposons quelques conseils qui vous aideront à réduire (réellement) vos dépenses mensuelles.
12 ways to reduce costs in your monthly budget
Source: Freepik
Author: Redaction

We know that from theory to practice is a big step (and a good few euros too), but it doesn't have to stay that way. In this article we bring you tips that you can really put into practice.

1 - Write down all your expenses

This is the first step before even creating a budget. The logic is simple: first, record all (yes, all) the expenses you have for 3 months. This step is important because it will allow you to draw up a budget that suits you and the situation you are in, based on real income and expenses: yours and/or those of the people you live with. 

This way, you will be more aware of where your money is going, and you will certainly have a much clearer idea of where you can save more after 3 months.

Nowadays you can do it by consulting your bank statement, registering it in an excel (there are several ready-to-fill templates on the internet) or even in an app for that.

You can start by separating your spending by categories and by frequency (daily, weekly, monthly, yearly) and put the amount spent

Example list of categories:
- Rent or house loan instalment
- Water
- Electricity
- Television, internet and telephone
- Consultations
- Medicines/pharmacy
- Exams/analyses
- Fuel
- Car instalments
- Tolls
- Car servicing/maintenance
- Car parking
- Car insurance
- Eating out
- Gifts
- Supermarket
- Hairdresser
- Gym

2 - Adapt your meal planning 

Before you head to the supermarket, take a look at what you still have in your pantry, fridge and freezer and see how many meals you can make with the ingredients you still have. 

We suggest two ways to plan your meals:

  1. Make a weekly meal calendar (diversified and/or with favourite and easy-to-make dishes) and go shopping accordingly. This option is ideal for those who already have a clear idea of what they will eat and can plan their meals;
  2. Pre-prepare meals on a single day of the week and leave them in the fridge in 4 categories: 2 protein options (fish, meat, eggs, mushrooms, soya, tofu, etc.), 2 vegetable options (aubergine, courgette, peppers, carrots, tomatoes, lettuce, beetroot, etc.), 2 carbohydrate options (pasta, rice, spaghetti, potatoes, quinoa, etc.) and 2 fruit options (seasonal fruit is usually cheaper). This option is ideal for those who are not sure which meals to choose. This way, you will be able to plan complete and balanced meals more easily, as you can just buy 2 options from each category and combine them as you wish. 
  3. Of course, with each option, you should take into account the number of people living with you, as well as any unforeseen circumstances that may arise. The goal is to reduce costs, but also to be flexible.

3 - Save at the supermarket

As well as taking your shopping list with you, you can put these points into practice:
  1. Take your reusable bags, this way you avoid spending money buying bags;
  2. Pay attention to the leaflets and specific promotion dates of the products you usually buy, so you can buy them cheaper;
  3. Pay attention to expiry dates, as many supermarkets lower their prices when the product is approaching its expiry date;
  4. Use vouchers and supermarket cards to get bigger discounts.

4 - Make your own products

I'm sure you have several food and cleaning products that you can perfectly make at home, being much cheaper. Search for the specific product and you will find some recipes on how to make it.

Examples of foods you can make at home: vegetable drink, homemade yoghurt, homemade mayonnaise, vegetable broth, bread, granola, sauces and dressings, among others. 

Examples of cleaning products you can make at home: with just a few ingredients, such as baking soda, cleaning vinegar, blue and white soap, essential oils, aromatic leaves, citrus fruits, among others, you can make multipurpose detergent, laundry detergent, fabric softener, homemade deodorants, solid shampoos, among others.

5 - Buy second-hand clothes  

You can cut costs in this section by applying these 3 options:
  1. Buying second-hand clothes is more sustainable than continuing to go to sales every year and buying on impulse;
  2. Swapping clothes with friends and/or family is another way to save on the monthly budget.
  3. You can make some extra money by selling the clothes you no longer like or wear.

6 - Reduce electricity costs

You can reduce your electricity bill at the end of the month by applying these 3 tips:
Use LED light bulbs, have air conditioning instead of heaters. Use smart sockets to avoid stand-by appliances. 
Give preference to the economic programme of the appliances. 
See if you can buy the bi-hourly tariff and switch on appliances at night, which uses less energy.

7 - Renegotiate all contracts with suppliers 

We know that the values increase every year. A good way to reduce the monthly budget is to renegotiate all insurance (home and car), water, electricity, telecommunications and other contracts you have. 

Do simulations with different providers and ask if they can match the value of the simulations if it is lower. If they do not match, you may even consider changing supplier to ensure better prices and conditions. 

Also check the cases where having several services subscribed to the same provider guarantees you some discount.

8 - Reduce your water costs

You already know that you should spend less water by taking shorter showers and turning off the water while soaping or brushing your teeth. However, we have a few extra tips that will make a difference to your budget:
  1. Avoid pre-rinsing in your washing machines and dishwashers;
  2. Opt for toilets with a half-flush option;
  3. Install a flow reducer on taps;
  4. Avoid washing dishes by hand;
  5. Use a mop with a spray dispenser to wash the floor;
  6. Avoid buying bottled water, opt for a charcoal filter.

9 - Take a lunchbox and coffee from home to work 

You can save a good few euros by taking lunch, snacks and coffee or tea to work.
In addition to having greater control over what you eat, you will be better fed, since you will not always be hungry and will not tend to attack sweets and other nutritionally poor foods.

10 - Apply the 50/30/20 rule

This savings rule is a good method to save at the end of the month. You can divide your monthly expenses into three parts:
  • 50% of the budget for fixed expenses: rent, water, electricity, food, etc.
  • 30% for superfluous expenses: travelling, eating out, gifts, etc.
  • 20% for saving: it goes straight into savings or can be used as an emergency fund for some unforeseen event. Warning: don't save only when you have money left over!
The trick here is to adapt these percentages in a real and appropriate way to your situation, which allows you to reduce spending without being distressed.

11 - Include a figure for extras

Applying the rule we talked about above, the budget that will work best for you will be the one that also includes a defined amount for extras

Extras are non-essential expenses. Example: dining out twice a month, buying a gift, buying a book, etc.

You can strategically set a specific amount for these little things that you know you want to keep in your budget because you can't do without them.

For example, it will be completely different to go out to dinner when you feel like it or to go out to dinner twice a month because you put that money aside and included it in the budget.

12 - Now, draw up a realistic budget

After putting into practice all the points mentioned above, you can draw up your real budget that suits your needs.

You can, for example, make a table in excel and put all the categories in front of the respective value you have set as budget. This way you can include that monthly dinner with friends or that trip to the cinema in your budget without increasing your costs.
With good planning you will be able to reduce costs and optimise your monthly budget.

Now just put it into practice and see the results appear!

If this is a topic that interests you, read more here: Tips to reduce waste at homeTips to save water at homeSustainable Food: 6 Tips;

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