In part one we talked about how to set your budget of monthly expenses. Now It’s time to reduce those costs.

First, go through your list of monthly bills and see how you can reduce each one. Quite often you can call credit card companies and get a reduced rate. You may be able to switch cell phone providers or find a lower rate.

Many people don’t take advantage of offers that come through the door for cheaper monthly cable or a lower monthly telephone service. Also, one of the easiest fixed costs that you can lower is insurance. Call all the car or home insurance companies and get them to beat each others offers. As long as you are realistically lowering your monthly costs then you are going in the right direction.

Then take a look at your existing credit. If you have good credit then you are in a good position to shop around for a better rate car loan or a better mortgage. If you’re credit isn’t great then log onto the three credit companies, Equifax, Experian, and TransUnion. These will give you practical information on how to fix your credit so that you can get those monthly costs down by either consolidating your debts or replacing them with loans over a longer lending period or with a better interest. Again, be careful you don’t end up paying more.

Then have a look at all the things that can buy cheaper, like cheaper gas, cheaper brands of food. There are lots of ways to spend less on the things you buy on a regular basis by either finding sales, coupons or special offers or buying it somewhere else where it’s cheaper.

Then comes the part where you have to look at all the things you can cut out of your budget all together. Do you have any monthly subscriptions or memberships that you don’t really use anymore? Do you spend money on services or products that you don’t really use any more? Do you really need those expensive brands?

Once you have sorted all your costs you should see if your monthly costs both essential and non-essential are lower than your monthly income. If it is then great and pat yourself on the back for a job well done.

If it isn’t, and you have really tried to squeeze every last dollar out of the costs then you may have to reconsider your situation. You could either start cutting things out of the budget like using only one car, one cell phone, or go back to the income and find ways to increase what’s coming in by finding a better paid job or working from home in the evenings.

Either way, try and be creative in thinking about the ways you could save money so that living on one income is a comfortable step and not a financial nightmare. With a little thought and planning ahead you may be able to get by easier than you think.