How to avoid unnecessary expenses

The 50-20-30 rule. Create a family budget that clearly defines fixed and luxury expenses. Avoid the noose of consumer credit. And be careful how many subscriptions you have.

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how to avoid unnecessary expenses

Bills, household expenses, rent, or mortgages. A family budget, just like that of any state, is divided into two parts. On one side are fixed costs, which are difficult, but not impossible, as we'll see, to reduce; on the other side are more flexible expenses, for which there is certainly more leeway.

The 50-20-30 rule

But how can you really save money at home? How can you eliminate expenses that actually amount to waste? What we propose here is the 50-20-30 rule, with two premises. The first: cuts shouldn't mean downsizing one's lifestyle to the point of making us feel unhappy or dissatisfied. The second premise: the family aspect from which to start to keep the household budget in order remains that of bills. The 50/20/30 rule is a savings system invented by Professor Elizabeth Warner and recently published by Forbes.

What does this system consist of? In practice, it is a real virtuous management of the family budget, which provides for a specific distribution of expenses, measured by income. According to the rule defined by the Harvard University professor, 50% of income should be directed toward essential costs such as bills, food, mortgages, or rent.

The 20%, instead, should always be directed towards two components such as the saving in the cash register or the investments Financial: also to cover existing debts, if any. Finally, 30% of your income should always be allocated to so-called "flexible costs": those expenses related to entertainment and leisure, such as movies, dinners out, or evenings with friends. This category also includes the purchase of smartphones and the cost of their data plan. Therefore, with the 50/20/30 rule, you can intelligently cover all expenses.

How to save on bills

Electricity and gas bills They can't be eliminated, given the importance of energy for powering our homes, and they're also destined to never decrease over time. However, they can be cut, allowing you to save on one of the biggest budget items. How? For each type of energy supply, there are small measures that can translate into big savings. From electricity to gas to water. Avoiding waste and unnecessary expenses, at least in these cases, is much easier than you think.

The family budget

Even at home, and in general to manage household and personal expenses, it's important to have a clear picture of your expenses, at least as a rough guide. This also includes indulging in some unexpected treats or pleasures: in this case, it's not about waste but about choices that can improve your mood and quality of life.

  • Create a budget: plan your monthly income and expenses. Having a clear view of your cash flow will help you avoid impulse purchases.
  • Monitor your expensesThere are some very useful apps, but you can also do it on a simple, always-updated diary.
  • Avoid them impulse purchases: When you see something you like, but it's not useful, take the time to think about it before purchasing.
  • Plan your purchases: if you have to buy something, try to make a list and stick to it.
  • Avoid going shopping without some initial goal, and make a list as in the case of shopping at the supermarketThis is a very effective method to avoid unnecessary expenses.
  • Take advantage of deals when there's a real bargain. And don't buy things just because they're on sale.
  • Avoid consumer loans. They advertise themselves as "zero interest," but this is almost never true. And they can become a prolonged drain.
  • Be careful with subscriptions: Periodically check your active subscriptions (such as streaming, gyms, magazines) and cancel any you don't use or need.

And remember the golden rule of the great Totò: it is the sum that makes the total.

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Cover photo by Maitree Rimthong via Pexels

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