It doesn’t take much preparation or effort to reduce your expenses, but you might not know where to start. Ramit Sethi, personal finance expert and New York Times bestselling author, recently posted some budgeting tips on his Instagram account.
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Here’s his advice on how to cut your spending.
Don’t Buy an Expensive Home and Car
Buying a big house and a fancy car is an excellent way to make your neighbors envious. It’s also a great way to go into debt and live paycheck to paycheck. Sethi said these two categories are where people are most likely to unknowingly overspend.
Sethi explained that many people don’t realize the hidden costs of buying a car or house. On top of the monthly loan payments, you also must pay other monthly expenses that add up. For a car, you’ll have to pay gas, registration fees and insurance. For a house, you should plan to shell out some money for property taxes, utilities and homeowners association fees. Additionally, both housing and cars break down and need maintenance. These costs might not be monthly, but they could make a big dent in your bank account each year.
If you’re in the market for a home or vehicle, it’s best to think about what you can afford. Downsizing your current house and car to something cheaper can also save you a lot of money in the long run.
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Don’t Make Eating Too Convenient
After a hard day of work, it’s easy to fall into the spending trap of ordering delivery or heading to your go-to restaurant. You don’t have to worry about chopping onions, setting the table or doing the dishes. But while it’s convenient, it’s also costing you.
Sethi said the average person is spending a lot more on this kind of convenient eating than they think. He suggested scrolling through your credit card statements and documenting how much it costs you.
Sethi isn’t the only financial expert who has this advice, either. George Kamel, a frequent guest on the Ramsey Show and finance YouTuber, said eating out is four times more expensive than eating at home. When you eat out or order delivery, you’re paying for the food as well as a portion of labor costs and operational expenses.
Being more conscious about what you’re spending on food is one of the fastest and easiest ways to boost your savings.
Don’t Wing It
When you make small purchases without keeping track of them, it’s easy to forget about them. That can add up. Sethi said you will pay more by default if you don’t track expenses.
Buying subscriptions is one of the easiest ways to rack up costs. In 2024, the average monthly spending on subscriptions was $273. Some of these subscriptions are from necessary expenses like cellphone plans and internet bills, but they can also include forgotten streaming services or online courses. Tracking your costs can help you see where your money is going and what small expenses are adding up.
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This article originally appeared on GOBankingRates.com: Ramit Sethi: These 3 Shortcuts Will Help You Cut Expenses
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