Tackling your biggest expenses first may sound like a no-brainer, but many people, if you think about it, do go about trying to save money by cutting out little things, like the daily cup of coffee, without addressing major expenses, like mortgages.
Photo by Rachel.
Every little bit you can save anywhere counts, of course, but Forbes points out that you’ll make the most progress on reaching your financial goals, such as paying down debt or saving for your emergency fund, if you start with your biggest expenses first. For most people, this will likely be your housing, transportation and food costs.
Make a list of your expenses from order of largest to smallest. Then find ways to tackle them, whether it be refinancing for a better mortgage rate or considering moving, using your car less and biking to work, and eating out less.
After you’ve tackled the major expenses, you may find you can indulge in the daily cups of coffee after all.