Another thing to consider when analyzing your expenses is to look at those items that are highest on an annual basis. Are there ways to cut those down overall? Groceries is certainly going to be one of those. As I’ve mentioned before, there are several ways to cut down on your grocery bills.

1. Start by looking at what you’re really eating. Are you buying gourmet items that tend to cost more? What about instant meals? Again, these cost more, and you can make your own at home with a couple hours work and a freezer to store the meals for a couple of weeks.
2. Look at the brands you are buying. Generic brands are often the exact same product as one of the name brand products, simply repackaged in order to get the market for those who are being more frugal.
3. Check out what coupons are available for the kinds of groceries you normally buy. Don’t buy something just because it has a coupon – yes, people do this. Only buy what you really need and don’t go overboard. One place I looked online for coupons is MySavings.com. It’s okay, but you’d have to see for yourself, as it varies depending on where you live.
4. Shop at the grocery store with the lowest prices. Surveys have shown that prices on the exact same grocery cart can vary by as much as 30% depending on what store you are shopping at.

Examine all of your expenses. If you spend too much on clothing, then you need to know why. Are you really hard on clothes and buying styles that just wear out too quickly and therefore you have to replace them too often? Or are you buying fancy clothes, and a too many for what your needs really are.

Identify your want versus needs. This is crucial to stay within a budget. Wants are those items that we desire but are not necessary in our lives. Most of the things that we spend money on are actually wants. You need to decide which of those are flexible or expendable and then see where you can cut back, of necessary. Needs are those things that you just have to have in order to survive. But this also means that there is some overlap. Sometimes we need a car in order to make a living. But we don’t need an expensive SUV, only something large enough to get us by. Nobody actually needs an SUV that I have ever seen. And I challenge anyone to prove, beyond a doubt, otherwise.