Expenses are the things you spend your money on. For example, food is an expense. If you have a car, car insurance is an expense. If you rent an apartment, monthly rent is an expense. If you eat out, that is an expense. And the list of expenses can go on and on and on. If your expenses are more than your income, you’re in negative territory. If you are breaking even, you’re living paycheck to paycheck. If you’re income is more than your expenses, you’re in positive territory. It come down to that it’s not about how much you earn, it’s about how much you spend. The spending are the expenses which there are controllable and uncontrollable expenses.
Uncontrollable expenses are those expenditures that you don’t have control over. For example, you have to live some where and if you are renting your home, that is an uncontrollable expense. You do not have control over rent because you do have to live under a roof. If you live in a community where there is a home owners association (HOA), that is an expense you don’t have control over and you have to pay it. You may say that you can control the cost of rent or HOA by moving to a lower cost place but you still incur an uncontrollable expense regardless of the amount.
Controllable expenses are those expenditures that you do have control over as far as deciding how much to spend on it. For example, the amount of food you consume is controllable. You can control how much groceries to buy or not to buy. You can control your utilities meaning you can use less heat in the winter or less AC in the summer to reduce your gas or electric bill. Same goes for water consumption. You have control to decide whether to consume more or less.
One of the keys to financial independence is to be able to identify all your expenses and take control of your expenses. If you’re going to have an expense, it’s either going to be a controllable or uncontrollable expense. The best way is to not have an expense at all but we all know that will never happen. We all will have some expense. Controllable expenses are those where you have the power to adjust and influence. These are the expenses that will help you financially. Consume less and your expenses go down. Consume more and your expenses go up.
Here are some ideas to help reduce your controllable expenses
- Use less electricity by turning off lights, using less AC in the summer, or using less heat in the winter
- Use less water by taking shorter showers
- Buy less food and eat less
- Reduce car gas consumption by biking, walking, public transportation, or carpool
- Reduce entertainment expenses by eating out less, going to the movie theaters less, or have less get togethers at venues
We all have expenses, controllable and uncontrollable but at least you have the power to control how much you consume to help reduce the controllable expense amount. This is something you can adjust and influence, and over time you will start to see more money in your pocket. If you are interested in following my journey, email subscribe to get alerts of latest posts or follow me on Facebook, Instagram, and Pinterest.
To see all my previous articles, go to my Archive page