Optimize your finances in small ways - make a big difference
At Collectia, we care about helping individuals and businesses with their finances - because as a debt collection company, we feel that we have a societal obligation to help debtors move forward - even when finances can be tight.
In this article, we asked Morten Holst Henriksen, Cand.Merc.Aud. (accountant), about his best tips for optimizing your finances - both as a business and as an individual.
Many small streams
I often find that both individuals and businesses focus on the big expenses: rent, car loans, light, water, heating and insurance - and with good reason. Of course, large expenses are a big part of your finances - and with a review of your online banking overview, they're also the ones that are hard to overlook.
But I often find that people focus on the big expenses - which are often the ones we try to optimize; rescheduling loans, buying cheaper insurance, switching electricity companies, etc. You have to keep doing that.
But we tend to forget the small expenses, because they may be small, but they can have a huge impact on your finances and your disposable income.
In this article, we focus on the small expenses in your finances - which often have a big impact on your finances anyway.
Beware of subscriptions
Danes, young and old, have subscriptions worth over DKK 30 billion - that's equivalent to each Dane having subscriptions worth DKK 5000 annually.
Subscriptions are often an easy way to access a product for a low fixed monthly fee - from mobile telephony, TV, streaming services etc.
Are you among the Danes who have subscriptions worth DKK 5,000 a year - maybe more? Whether you are or not, you should regularly review your subscriptions to see if there is a streaming service or similar that you could cut back on - or maybe drop altogether? There could be thousands of dollars to be saved every year on this exercise alone.
Food budget
The food budget is one of the budgets that most Danes exceed every single month. Supermarkets, and therefore food, are among the biggest culprits when it comes to small payments - which often end up at the end of the month.
You might shop at the local supermarket for a few hundred dollars, it's not necessarily noticeable in the situation - but if it happens several times a month, yes, it adds up.
The average family spends over 80,000 DKK at the supermarket every year - could you shop more efficiently or introduce a meal plan? The answer is often yes, if we as families are better and more efficient when we shop.
Make a budget - and stick to it
Whether you have big items in your budget - or many small ones, Morten Holst Henriksen's best financial advice for everyone is: make a budget - and do everything you can to stick to it.
Because the budget is (still) the best tool you as an individual and company can work with when you want to manage your finances - and thus an opportunity to optimize your finances - regardless of whether they are large items - or many small ones.
The budget creates an overview of your finances - your income and your expenses. Without an overview, you can't optimize; neither the big items - nor the small ones.
Creating a budget can be a difficult discipline - and even more difficult to stick to it. But a budget is a good investment when you want to optimize your finances now and in the future.
