It doesn’t take a financial whiz to tell you that inflation is having an impact, both on the broader economy and on our individual offices and households. This is coming at a time when many agents are anticipating or experiencing slowdowns in their businesses, driven by low inventory and high interest rates. Thus, you may be starting to get a little nervous about how much you’re spending and how much you’ll take in over the months ahead.
The good news is that when you start looking at your expenses, you’ll probably find that there are plenty of places where you can cut enough costs to make up for some of the higher prices you’re seeing. With prices anticipated to be up between 5-10 percent, and commissions expected to be down over the same period, some brokerages are advising you to tighten your belt by 10-20 percent.
Here are some simple places to get started saving money so that you, your family and your team don’t have to feel the pinch.
Track your expenses, and see what you can cut
You probably put some thought into the larger expenses you routinely spring for, but you may have developed the habit of mindlessly spending money on smaller items.
One of my big impulses used to be Amazon orders — if I thought of something I wanted and it didn’t cost much, it was oh-so-easy to order it from the app without giving it a second thought. I was shocked when I sat down and added up all of those impulsive Amazon purchases — tallying a few hundred dollars each month.
Ideally, you should take the time to sit down and break out all of your expenses, or use an app like Mint to track them. If you want a quick rundown, though, just take a look at one or two expenses or vendors who you feel you may visit too often.
Maybe it’s spending too much at Starbucks or maybe it’s spending too much on fast food. If you think you’re overdoing it, you probably are and you’ll find an easy and fast way to cut costs by looking at your wasteful spending habits first.
Take the disposable out of disposable income
We often make purchase decisions based on convenience and many of these conveniences are also bad for the environment. What do you buy too much of, only to throw it away or toss it in the recycle bin?
Here are a few trade-offs you can make to improve both your budget and your environmental footprint:
- Trade too many paper towels for a set of dish towels
- Trade water bottles for one reusable water bottle or a filtered water pitcher
- Trade paper plates and disposable cups for reusable dishes
- Trade paper coffee cups for a reusable travel mug
- Trade disposable zip-lock bags for silicone storage bags
- Trade single-use liquid soap dispensers for refills
- Trade coffee and tea pods for mesh filters, pour-overs or French presses
- Invest in a Soda Stream to avoid waste from sodas and seltzers
Determine whether you’ve developed wasteful habits
Maybe you’ve gotten out of the habit of making coffee at home, opting instead to stop at the coffee shop each morning. Maybe you’ve been ordering dinner too often rather than cooking at home much more inexpensively. Maybe you started having groceries delivered during the pandemic and are still paying too much for the service.
For many of us, the pandemic changed the way we did things, what we spent our money on and how we ran our households. We may have developed habits over the past couple of years that we need to rethink now. Examine your habits, especially if they’re recent, and find out if there are expenses you can cut out or reduce now.
Don’t think never. Think less often
You won’t stick with changes if you feel deprived, so instead of thinking that you can never have something or some service, think about having it less often. For example, if you have a housekeeper or landscaper come in each week, consider cutting back to every other week. If you go out to lunch every day, consider cutting back to every other day or keep it as a treat once or twice a week.
Don’t make yourself miserable cutting out everything you enjoy. Just look at ways to reduce the impact it has on your wallet by reducing the number of times you indulge.
Don’t cut out the things that are making you money
Most of all, make sure that you’re keeping those activities that add to your bottom line. If you spend money on marketing, and it’s working well, that is not a place to cut corners. If you routinely get clients through your membership in an organization or country club, it may be cost-effective to hold onto the access they provide. If planning a client appreciation event once or twice a year pays dividends, by all means, keep it going.
Take an honest look at your marketing initiatives and those things that you depend on for lead generation and nurturing and make sure that they’re as effective and profitable as you believe. You may find that an occasional commission is not worth an uber-pricey membership or marketing strategy.
You may find that you’re getting just as much bang from your free social media posts as you do from your paid or boosted posts. Measure your KPIs, crunch your numbers, find out what’s working, and get rid of the rest.
Christy Murdock is a Realtor, freelance writer, coach and consultant and the owner of Writing Real Estate. She is also the creator of the online course Crafting the Property Description: The Step-by-Step Formula for Reluctant Real Estate Writers. Follow Writing Real Estate on Twitter, Instagram and YouTube.