Tuesday, May 19, 2009
How To Cut Expenses
It's time to tighten our belts. The recession may be near the bottom, but it won't be over any time soon. Although Britney Spears reportedly spent $1 million a month last year, most people don't have that luxury. Last year, the world's most famous bipolar singer spent $447,633 on security and bodyguards, for example. That's a bit much, if you ask me. In fact, I've cut out most of my security detail, but for obvious reasons I can't reveal what type of security I'm currently using. $3.6 million on attorney's fees may seem excessive, however a good lawyer will cost you a lot these days. The best most of us can do is stay out of legal trouble. The best advice: don't spend more than you make. By most estimates, the average U.S. household spends close to $50,000 a year. Most people think certain costs are "fixed." The average family spends a little over $1,300 in electricity a year. Just by simply unplugging appliances when you're not using them, you can cut up to 10% off the bill. And then there's car insurance, the phone bill, the cable TV bill, the cost of eating out, and all sorts of other things like housekeepers and vacations. Most people can cut costs on just about everything. They're just unwilling to do it. For example, if you have your coffee at home, and cut out that $4.95 latte every morning five days a week, you'll save over $1,100 a year, after you factor in the few cents a day it costs to use a "Mr. Coffee". Over an average lifespan, that would come out to over $75,000. That's some serious cash. Well, maybe not for Britney Spears. But if she cut her security detail down just 25% a year, that would save her close to $6 million if she lives to be 73. I guess that's not much if you're making $5 million a year. As for the average person's security system, I'm not saying they should get rid of it, I'm just saying it's OK to downsize. For instance, we obviously don't all need bodyguards, but a home security system that costs $80 a week could be dropped in favor of a large dog. And if you really want to save money, get a small dog that barks loud. They eat less.