Society is becoming so commercialized that no
person is exempt from this worldwide phenomenon called spending and mounting
expenses. The high cost of living has
paved the way for an increase in the spending habits of people.
An expense refers to disbursement or spending and
it generally has something to do with money.
Anyone who lives today isn't exempt from having expenditures even just
for day-to-day living.
Expenses can either be essential meaning those
expenses necessary for the survival of a person, or non-essential expenses,
which refer to expenses that aren't really necessary or are considered as
luxury expenses.
The most common and essential expenses are those
spent for food and for the daily subsistence of a person. A person couldn't survive without food and
water so almost all people are forced to spend money on these items. Expenses
for housing utilities like water and lights are also considered essential
expenses because any household will not operate efficiently without them.
For people on the go, the cost of fuel or fare is
also considered an essential expense because they couldn't go about their daily
work without spending for these items.
Essential expenses are the expenditures that a
person couldn't live without because these are necessary for the day-to-day
subsistence of a person. Try scrimping
on food expenses and any person will soon realize how essential food is in the
daily household budget.
People work so they will earn money that will be
used to pay for their essential expenses.
A person who isn't lucky enough to get a good paying job will definitely
have no choice but to tighten the budget even for his essential expenses. This means cutting back on basic needs like
food, water and power consumption and even toiletries.
However, there are some people who earn less but
still spend more for their household expenses.
These people have failed to manage their finances and they will soon be
deep in debt. The key to successful
household management is to keep expenses to the minimum.
The expenses of every person differ and the money
allotted for each type of expense depends on the priorities of the person. While each person has a household expense,
there are other expenses that are necessary to fulfill his various
responsibilities in life.
A person who is engaged in business will
definitely be familiar with business expenses.
These are the necessary expenses to run a business and sometimes it is
called overhead expenses. Any
entrepreneur should keep his expenses at a minimum and it should be much less
than the total sales of the business so that the business will be able to make
a profit.
An entrepreneur can have expenditures related to
the promotion of the business, advertising, maintenance of the business
establishment like expenses for power and water, salaries and wages for the
employees and other expenses. A person who works at home can claim a certain
percentage of the household expense as a business expense.
While business enterprises should cut back on
their overhead expenses to get a decent margin of profit, a homeowner should
keep his household expenses to the minimum to achieve a reasonable
savings. Savings advocates, however,
argue that savings shouldn't be the remaining cash after the expenses are
deducted from the total income. They say savings should be deducted from the
total income first and the remaining cash should be the basis of the monthly
budget of the person.
Every person who wants to profit and to achieve
savings should be a wise spender. You
can keep the expenses at a minimum by availing yourself of grocery sales,
promotions, and free coupons. You can
choose to buy a cheaper product with the same functions and quality as another
known product that is more expensive.
It is always wise to become a critical spender so
manage your finances wisely and keep the expenses low by following different
strategies like buying from the bakeshop when it is near closing time as most
shops discount their bread products by as much as fifty percent during this
time.
There are a thousand and one ways to save money
and keep expenses low; it is however up to you to achieve these goals.
Image courtesy of inc.com
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