This is a guest post from Alban from Home Loan Finder.

If you feel you are getting swept up in the bills and expenses of your everyday life, but can’t seem to see anywhere you can cut back, perhaps you need to take a look at your expenses one by one. While you can’t always cut them down or out, some of the costs of living do not need to be as excessive as they are, especially when you identify how you use them, and then find a more efficient way.

So consider how much you could save if you didn’t have…

…a mobile phone

A necessity of life surely? Well yes, but think back just ten years and remember how you functioned then, without a mobile phone and instant connectivity to everyone everywhere. A typical mobile is a smart phone which allows you to stream your emails to your phone as well as go online from your handset.

Smart phones can be on average:

• On a $70 per month cap. You often pay $70 per month and receive $600 worth of calls for example.
• Including a $30 repayment. If you can’t afford to buy the phone outright, you can pay it off bit by bit monthly, over a 24 month contract.
• A $10 per month data allowance. On average this monthly cost will get you one to two gigabytes of data which can be emails, downloads or web access.

Over the two year life of your phone you will be paying $2,640 and if you used your landline to call your friends and family when you got home, sent emails and instant messages while you were at your computer and checked your banking at an ATM or on your statement you could save thousands.

…a car

The costs of buying and maintaining a car differ significantly depending on how much you drive it, where you live, how old you are, what kind of car you choose and hundreds of other variables. However, take the opportunity, and this example, to consider exactly how much your car is costing you, and whether there are ways to make savings; shopping around for insurance for example can reveal a better deal, so too can driving part way to work and walking or catching the bus or train, saving you on fuel, parking costs and wear and tear on your car.

To buy an average four door sedan new is around $27,000 on road. If you are borrowing money to buy the car, expect a seven year personal loan interest rate of 11.49% meaning your repayments are around $498 per month.

If your car has a fuel tank which holds 60 litres and it gets 7 litres per 100 kilometres then if you are driving into the city to work every day, as well as using your car on the weekends, you are going to fill your tank around once a week, and with fuel at $1.20 per litre this will cost you around $70 per week. To insure your car based on your usage will be another $78 per month.

This all adds up to an owning and running cost of approximately $262 per week.

…smoking

If the average smoker goes through two packets of 35 cigarettes a week, at around $20 per packet, that is $30 per week, or more than $2,000 a year just in cigarettes. However, if you have to answer ‘yes’ to the question ‘are you a smoker?’ it can cost you in a lot of other ways too.

For example, expect to pay around $300 more for your health insurance policy and around $1,000 more for your life insurance policy if you are a smoker. Also consider that as a smoker you are considered more likely to burn down your house and so you could be paying 10% more in home insurance, not to mention affecting the value of your home and therefore costing yourself equity because of the damage and the smell. Your car insurance is also likely to be around 5% more if you are a smoker.

It has also been found that smokers earn between 4% and 11% less than their non-smoking colleagues.

…new clothes

There are new clothes that you want, and those which you actually need, and to help you see where your savings could be going, consider what you are spending on some of your more extravagant clothing purchases:

• An incidental top or skirt purchase once a week of $50. You see something stunning in the window or walk past a bargain which you just have to have, if you’re adding to your closet weekly this can significantly eat into your savings.
• A $200 pair of new shoes each month. The seasons and the styles change but we can’t all marry a ‘Big’ stockbroker to furnish our fetish.
• Another couple of incidental accessory purchases adding up to $100 per month. you may feel the need to finish off an outfit with a new pair of earrings or you forgot your scarf and so simply buy a new one, adding more non-essentials to your wardrobe.
• Updating your office look with two new suits per year, at $500 each. Suits are a staple of any wardrobe and can quickly eat into your budget if regularly updated.
• Updating your winter coat for $250. New styles and new seasons – a winter coat is always seen as an investment, but it is not making you the returns a savings account could.
• Special occasion outfits two times a year. On average you may go to two weddings a year, and see yourself spending $500 each time to cover new outfits or accessories to update older looks.

This brings you to a yearly total of more than $8,400 spent on clothing.

…a job

Having a job is supposed to earn you money right? Well don’t forget that it is going to cost you money as well, and you need to make sure you can come out ahead, or at least break even.

Consider the fact that if you have to put a child in day care, this can cost around $80 per day which can add up to $20,000 a year. Most people will be eligible for rebates which can bring the cost down to as low as $15 per day, but on average you will spend around $30 on childcare, or $7,500 a year.

You also need to consider your fuel costs from the car example above, as well as the costs of keeping your wardrobe updated and in good condition, from the clothing example above. There are also the temptations to buy coffees and lunches which you could normally avoid with a trip to the pantry at home.

Then there are general office costs which differ between companies and industries, but consider being asked to chip in for each of your colleagues’ birthdays – in an office with 20 people and $10 per group present you’re looking at $200 per year on gifts for people you’re not necessarily friends with.

…a dog

If you’re not ready for the investment in children, you may consider getting a dog, but you can still save around $840 a year if you don’t have a pet. There are costs such as:

• Annual shots of $80 each.
• Heartworm and all-worming treatments at $10 per month
• Flea treatments at $10 per month.
• Dog food at $10 per week.

You don’t always have to give up a part of your life to make savings in your budget. Often simply looking at the costs and break down of each aspect of your life and each of your vices or habits is enough to show you where you can curb your spending, and show you a way which allows you to enjoy your favourite pastimes or your life’s path.

Alban is a personal finance writer at Home Loan Finder, where he provide tips on investment home loans.

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