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In an effort to reduce my living expenses so I can put more money into savings, I asked ChatGPT to help me figure out a first step I should take.
You find articles all over the web that give advice on how to do this but I wanted something that was tailored to fit my situation without my having to do a ton of reading and research.
This seemed like a good way to start but also a great way to show others how to do the same – if it works!
Asking ChatGPT for Help Reducing My Expenses
ME: I want to reduce my expenses so I can increase the money I put into savings each month
CHATGPT: Reducing expenses is a smart move to boost your savings. Here are some practical tips to help you achieve this:
- Track Your Spending: Start by analyzing your expenses to identify areas where you can cut back. There are many budgeting apps available that can help you track your spending effortlessly.
- Create a Budget: Once you have a clear picture of your spending habits, create a budget that allocates a specific amount for each category, such as groceries, dining out, entertainment, etc. Stick to this budget as closely as possible.
- Cut Unnecessary Expenses: Review your expenses and eliminate non-essential items or services. This could include subscriptions you don’t use, dining out too frequently, or impulse purchases.
- Shop Smart: Look for deals, discounts, and coupons when making purchases. Buying generic brands, shopping in bulk, and comparing prices before making a purchase can also save you money.
- Reduce Utility Costs: Lower your energy bills by being mindful of your electricity and water usage. Simple actions like turning off lights when not in use, using energy-efficient appliances, and fixing leaks can lead to significant savings over time.
- Limit Eating Out: Eating at restaurants or ordering takeout can quickly add up. Try to cook at home more often and pack your lunches for work. Not only is it healthier, but it’s also more cost-effective.
- Use Public Transportation: If possible, consider using public transportation or carpooling to reduce fuel and maintenance costs associated with owning a car.
- Negotiate Bills: Don’t hesitate to negotiate with service providers such as cable companies, internet providers, or insurance companies to get better rates. Loyalty discounts or promotional offers may be available if you ask.
- Plan Ahead: Anticipate upcoming expenses and start saving for them in advance. This way, you won’t be caught off guard and forced to dip into your savings or rely on credit cards.
- Automate Savings: Set up automatic transfers from your checking account to your savings account each month. This way, you’re less likely to spend the money before it gets saved.
By implementing these strategies, you can effectively reduce your expenses and increase the amount of money you’re able to save each month.
My Initial Reactions
I thought this was a good set of suggestions and pretty typical. It was a bit surreal, though, to watch as this bot shared these ideas. It’s like you’re having a conversation in a chat room but you can see the person’s words come into view as they type them.
Interestingly, when I saw the first two ideas about tracking spending and following a budget I glossed over them. Old news, right? Who doesn’t know to do those things, I thought.
Except, I don’t do them. I’m at an age where I just know what we “tend to spend” each month but maybe it wouldn’t hurt to do those things again at some point.
Not all of these suggestions apply to me, though.
Of course, that’s what I expected but if I were reading an article with these suggestions I’d just keep that information to myself.
The benefit of using ChatGPT for developing an action plan to help me save money is that I can respond with specifics about my life.
I can tell it which suggestions won’t work for me and/or have it focus on the few that probably have the greatest opportunity of savings for me.
For example, I work from home and my husband drives a work-supplied vehicle.
Our two adult children who live at home pay for their own transportation.
Therefore, the suggestion about public transportation doesn’t apply to us.
While I don’t track every expense or follow a strict budget, we are pretty frugal as it is. There’s not a lot of wasted money going out the door.
I know that our best chances of reducing our expenses are in things we must pay such as our utilities and groceries.
These are necessities but that doesn’t mean there isn’t room for improvement.
Maybe we’re not managing our electricity usage as best we could.
Maybe I could make better use of coupons or leverage special pricing at our grocery store.
I suspect I buy too many expensive, processed foods and that I throw away some food that goes bad before we had a chance to eat it so I’m sure I’ll find some savings in this area.
Working Out a First Step
ME: I think my biggest opportunities right now are to either cut unnecessary expenses, reduce my grocery bill, or cut utilities. Which might be the best one to start with?
CHATGPT: When deciding where to start, it’s helpful to prioritize based on the potential for immediate impact and long-term sustainability. Let’s consider each option:
- Cutting Unnecessary Expenses: This can yield quick results since you can identify and eliminate non-essential spending relatively easily. Look through your recent expenses and identify any subscriptions, memberships, or services you no longer use or need. Cancelling these can provide immediate savings.
- Reducing Your Grocery Bill: While this may take a bit more effort initially, it can lead to consistent long-term savings. Start by meal planning, making a list before going to the store, and sticking to it to avoid impulse purchases. Additionally, consider buying generic brands, using coupons, and shopping for items on sale to further reduce your grocery expenses.
- Cutting Utilities: This can have both immediate and long-term benefits, but the savings may vary depending on your current usage and the actions you take to reduce utility costs. Simple changes like turning off lights when not in use, adjusting the thermostat, and fixing leaks can lower your utility bills over time.
Given your priorities, I would recommend starting with cutting unnecessary expenses. This allows you to quickly free up funds that can then be reallocated towards savings or other essential expenses. Once you’ve made progress in this area, you can then focus on reducing your grocery bill and cutting utilities to achieve further savings. Remember, small changes can add up to significant savings over time.
ME: I think I’m aware of subscriptions I have and pay for and I don’t think there are too many – if any – that I need to cut but since that’s the easiest step I’m going to start with that one.
I think we probably have one or two subscription kind of expenses.
Our kids have tons because it seems the norm for younger generations but we don’t have too many.
To be on the safe side, though, and since that step is pretty simple, I decided to go with that one first.
CHATGPT: That sounds like a proactive approach! Even if you’re confident about your subscriptions, it’s always a good idea to double-check periodically to ensure you’re not paying for anything you no longer use or need. Sometimes, we can overlook certain subscriptions that have become a regular part of our expenses.
Here’s a simple method to review your subscriptions:
- Make a List: Create a list of all the subscriptions you currently have, including streaming services, gym memberships, magazine subscriptions, software subscriptions, etc.
- Review Usage: Go through each subscription and assess how often you actually use it. Are you getting value from it regularly, or has it become an unnecessary expense?
- Cancel Unnecessary Subscriptions: For any subscriptions that you’re not using frequently or at all, consider cancelling them. Most subscription services allow you to cancel easily online or by contacting customer support.
- Negotiate: For subscriptions that you do use but feel are too expensive, consider negotiating with the provider for a lower rate or switching to a more cost-effective plan.
By starting with this step, you’ll likely uncover some areas where you can free up funds that can then be redirected towards your savings goals. Once you’ve completed this, you can then move on to other areas such as reducing your grocery bill or cutting utilities to further optimize your expenses. Keep up the good work!
I feel pretty good about my initial discussion with ChatGPT on how to reduce my living expenses.
I’m going to start by going through my subscription fees to look for savings.
I know there are apps that do this but I’m old school and will review my accounts manually for now.
Once I get through that step I’ll move on to groceries and then explore savings in my utility bills.
I know I dismissed some of the other suggestions but, really, I’m just moving those down the list of priorities and starting with what I think are the big ones.
Proceeding with Caution
My biggest observation while having this conversation about finances with ChatGPT was that my inputs and responses could sway the conversation such that I could miss out on the real low-hanging fruit in my life.
It gave me a list of things to consider but it was my responses that identified the first three steps to take.
It wasn’t really ChatGPT going through all of my finances and telling me what I should do as if it was a financial advisor with all the facts.
It was swayed by my input.
Suppose I was a massive clothes fiend who was spending way too much at the mall every month but I didn’t want to give that up so I wasn’t honest with ChatGPT about that problem in my finances.
Cutting back on clothes shopping could be the fastest way for me to save money – if that were my situation – but I’d miss out on that because I wasn’t honest.
ChatGPT is only as good as its input and, even then, it’s going to have faults. Plus, it can’t help with things you don’t share.
If you’re going to try to use it to help solve grown-up problems you’re going to need to be honest.
You’ll need to be aware of when your answers may be driving the direction of the responses in an unhelpful way.
That will be something I need to keep in mind and perhaps test as I go myself.
I’ll keep you posted on what I find as I make progress!