Here are six unexciting but necessary living expenses, with some techniques to minimize them.
First and foremost, you need a roof over your head. This is also likely the most expensive of your unexciting necessary expenses. Standard accommodation takes the form of rent or a mortgage, and conventional wisdom says it shouldn't comprise more than 25% of your income (although for many people it's more).
Accommodation Reduction Techniques: You can reduce accommodation expenses by living outside of major city centres (but depending on where you work, shop, and socialize, this can increase your transportation costs). Subsidize your accommodation by renting out a spare room to travelers.
Unless you're using pedal power or walking everywhere, transportation costs. Needs vary dramatically, depending on where you live and work.
Transportation Reduction Techniques: Owning and operating a car is the most expensive; if you live in or near a city, consider car sharing, ride sharing, and carpooling. A scooter is cheaper than a car if you can get by with one, and public transportation is even cheaper yet.
Note: Accommodation and Transportation are your biggest living expenses. And since one usually comes at the cost of the other (i.e.: living in the city reduces transportation expenses but increases rent), analyze the cost differential to determine your best option.
Now it's time to make the roof over your head functional with utilities like power, heat/air conditioning, and water.
Utility Reduction Techniques: Temperature is the most easily reduced utility; turn the heat down and bundle up in winter, and strip down to enjoy summer heat without blasting air conditioning. Insulate your windows and walls to moderate temperatures year-round.
Phone and internet are arguably life necessities, with our ever-increasing need to remain connected.
Telecommunications Reduction Techniques: Since almost everybody has a cell phone, you can probably do away with your home phone. Depending on your internet needs, a good cellular plan alone might suffice; even if you need internet for a tablet or home computer, you could tether your cell phone, access free Wi-Fi in cafes, or simply use a connection at work in your spare time.
When choosing a cellular/internet plan, carefully evaluate your needs. Don't pay for services you don't need, and beware of extra charges like cell phone roaming when traveling.
Note: Cable/satellite television is not a necessary living expense! Even if you're addicted, consider finding online alternatives. (See also: 8 Expenses You Can Cut Out of Your Life)
Insurance is the art of hedging your bets, paying a small(ish) premium now to prevent financial detriment if catastrophic things happen later. And there's an overwhelming amount of insurance available (some of it legally required), including auto, property/renter's/homeowner's, disability, health, life, critical illness, and travel insurance.
Insurance Reduction Techniques: Driving a smaller vehicle (or no vehicle at all) reduces your auto insurance. You may already have disability/health/life coverage through work, although you'd best read the fine print. You might have travel insurance through your credit card, and you might wish to "self-insure" other financial disasters with emergency savings.
Gather all your insurance policies for your next semi-annual financial review and analyze what you have, what you need, and what you can eliminate.
Last but not least, we gotta eat. Food is a highly variable expense, depending on your diet, daily routine, social protocols, and location.
Food Expense Reduction Techniques: Obviously the less you eat out, the more money you'll save. Alcohol is a killer, so keep social drinks to a minimum. Even frugal shopping at the supermarket is not as easy as it appears: here are 17 ways to save money at the supermarket.
Nora Dunn is The Professional Hobo: a full-time traveler and freelance writer. Having sold her business and belongings to travel, she has been on the road since 2007. She travels in a financially sustainable manner, specializing in creative travel strategies like getting free accommodation and flying in business class for less than economy prices; all the while earning income with her location independent career.
As a former Certified Financial Planner, she is financially responsible for her actions along the way. She believes there is a fine balance between planning for tomorrow, and living for today.
She has penned the book How to Get Free Accommodation Around the World, is contributing author to the book 10,001 Ways to Live Large on a Small Budget, and a regular columnist for Wise Bread, Transitions Abroad, Credit Walk and many other publications.
Please enjoy her articles on the topics of travel, personal finance, and lifestyle design.