How to take charge of your expenses

It doesn’t matter where you are on your financial journey, if you can consistently keep some of the money you earn each month instead of spending it, you can change your financial future.

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Once you've managed to create a complete list of your current monthly expenses, you can plan where to cut back. Work through your spending in detail, and you'll most likely find expenses that could be reduced. Here are a few ways to help you analyse your expenses.


Needs and wants

Work through your list of expenses and note which are needs and which are wants.

Needs are your essential expenses – things you can’t avoid spending some money on to stay safe and healthy. Examples include accommodation, transport, electricity and food. Expenses that protect your financial wellbeing also fall under needs, such as vehicle and life insurance, or medical aid.

Because needs are essential costs, they must be prioritised in your budget each month. But remember that just because an expense is a need, doesn’t mean you shouldn’t check if you could spend less on it by shopping around for more cost effective alternatives.

Wants are non-essential expenses. The things you enjoy but could live without. Examples include takeaways, satellite TV, gym contracts and extra clothes.

Analyse your wants carefully. You may be surprised at how ‘small’ spending adds up over a month. Or you may be spending on something you’re not even using. You don’t have to cut everything out, but if you’re like most of us, you’re probably spending more than you realise on things that aren’t really adding value to your life. Plan what you can reduce, so that you can prioritise the things that really do excite you.


Fixed and variable expenses

Now, separate your remaining expenses into fixed and variable.

  • Fixed expenses stay the same each month, such as rent and school fees
  • Variable expenses change a bit each month, such as food and transport

You might think that fixed expenses can't be changed, but this isn’t always true. Making changes may initially take time and effort, but then the savings are locked in for some time to come. Review these expenses now as you plan your budget, and review your fixed expenses each year going forward.

Here are some ideas for how to reduce your fixed expenses:

  • Price check any contracts you have (e.g. funeral cover, vehicle insurance or a cellphone contract that’s close to renewal). Shift to a cheaper option or negotiate a better deal. It is worth doing price comparisons with other providers
  • If you've had a home loan for more than 2 years, it may be worth asking your bank for a better interest rate
  • Also check your bank fees – are you paying for services you don't use and could you save by moving banks?


Unlike your fixed expenses, variable expenses are influenced by your daily choices and behaviour. This means managing them requires continuous planning, motivation, discipline and monitoring. Think about the habits and behaviours you’d need to change to reduce your spending. Do you need to change the way you plan and shop for food? Can you start taking a packed lunch to work? Can you find free experiences to share with friends and family? 

It's essential to set specific monthly or weekly targets, and track your progress to manage these expenses.

Once you’ve found ways to cut back, you can create your new spending plan. You can also plan how to contribute more to your savings. But whether you decide to build your savings or pay off your debt quicker – this extra money will help you get a little wealthier every month.  

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