What expenses are the easiest to save money on?

Is that the sound of a chainsaw firing up on a Monday morning? Love it!

“Chainsaw” Al Dunlap was an American executive legendary for downsizing by sacking staff. Kerry Packer hired him and briefly bought him to Australia.

In his honour, I’ll take a chainsaw to my expenses … slash people costs.

Personal trainer? Sacked. Gym membership? Gone. Weekly trips to the masseuse. Cancelled. Osteopath’s number deleted from my phone. Golf pro and ironing lady? You’re both fired!

That would save costs except … I don’t spend a cent on those services.

Expenses are as individual as fingerprints. The key to cutting costs is about understanding the difference between needs and wants. And understanding your own priorities.

Start any cost-cutting exercise by getting all of your expenses on a page. Mark what’s a need and what’s a want.

Basic needs include rent/mortgage, utilities, food and clothing. But we often dine out and wear Gucci, when a steak at home and jeans and a t-shirt would do.

The two wants I’ll never cut? Insurances to protect what I’ve got and what I’m worth. And my investment program. It’s my family’s financial future.

My priorities. They might be the first to go or not even on many people’s lists.

Chainsaw Al was eventually sacked himself, from Sunbeam, then banned from running companies for cooking the books. He’s been named in a few lists of the top 10 worst CEOs of all times.

He went too far.

You need a life. But you’re probably spending on a lot of junk. Go through your spending and you’ll find junk you don’t need.

Bruce Brammall is the principal adviser with Bruce Brammall Financial (www.brucebrammall.com.au) and author of Mortgages Made Easy.