One way to think about cutting costs is to come at it from both ends. What do I feel I absolutely must spend money on? And on the other hand, what are the obvious extravagances I have no difficulty in identifying and letting go of?
Perhaps one insists on having a home, not living on the street. That’s a good baseline for the housing part of the budget. On the other hand, perhaps one could cross expensive artwork for decorating that home off the list of future expenditures. That’s fairly obvious too.
Maybe have to have a vehicle to get around in a normal fashion, so I spend on that. On the other end of the spectrum, maybe I don’t need to spend money having an optional moonroof installed on my vehicle.
These are wide extremes. As I’ve worked through the process of cutting expenses, I’ve gradually come closer and closer to the middle balance in all budget categories.