As per a recent Bankrate study, 38% of Americans cited high living expenses as the main reason for not saving any money. However, numerous financial experts agree that you can always trim your expenses to save money if you are willing to cut back on particular things you consider normal and essential to your daily life. Fortunately, there are countless ways to reduce your everyday expenses significantly. If you wish to learn more about cutting your expenses to save some cash, consider the points below.
- Lower your insurance premiums
Insurance premiums also take a chunk out of your monthly expenses, so lowering how much you pay for insurance is always worth considering to cut down costs. For instance, if you pay for home and car insurance, shop around for companies willing to bundle them for a cheaper rate. Some insurance companies also offer lower rates if you drive a more affordable car, have a safe driving record, and own a car with enhanced safety features. Therefore, you can switch to these providers to save on your car insurance. Similarly, some companies offer reduced rates for homeownership insurance if you make specific improvements like installing smoke detectors and burglar alarms. Furthermore, consider raising your deductible to reduce monthly premiums on all types of insurance, saving you money.
- Reduce your utility cost
There is no denying the importance of electricity and water to your everyday life. However, you needn’t part with an arm and a leg to fund your utility costs since there are several feasible ways to reduce your energy bills. For instance, you can invest in solar panels to supplement your home’s energy needs. Although solar panel installation is a significant upfront cost, the long-term savings opportunities you enjoy make them a worthy investment. Therefore, consider partnering with the best solar company in your region to get the highest quality equipment and installation so you can enjoy all the benefits of renewable energy with peace of mind. In addition, seal all energy leaks in your home. Exterior doors, windows, air ducts, electrical outlets, and chimneys are some of the popular energy leak hotspots around many homes, so keep this in mind. Furthermore, you can install a programmable thermostat for your cooling and heating system so you can regulate how hot or cold your home is even when you are not home, saving on energy bills. In addition, consider repairing all leaky faucets and toilets, taking shorter showers, and investing in a more energy-efficient dishwasher or washing machine to save water.
- Track your spending habits
A survey conducted in May 2020 revealed that 3 in 5 Americans did not know what they spent the previous month. This statistic is quite worrying, given that several financial experts agree that the first step to reducing expenses is figuring out where your money is going in the first place. According to these experts, you may be surprised at how much you spend on particular items, but this offers you a unique opportunity to see where you can make practical adjustments that reap the rewards. As such, consider writing down each expense as you make it, right down to the dollar you pay for an occasional soda. If you pay for stuff using a credit or debit card, check your statements and use different colored pens to mark various types of spending. You can even categorize your spending into needs and wants, so you can determine whether you need to incur certain costs in the future.
- Re-evaluate your subscriptions
A new Deloitte report reveals that the average American household has nine paid subscriptions spread across music, video, and gaming. Indeed, subscriptions are an essential entertainment aspect for many people, so it is no surprise that cable TV, streaming services, publications, internet, games, and other subscriptions are trendy. However, money goes out of your account to fund these subscriptions every month once you set one up. Consequently, take a closer look at your subscriptions to discover which of them you use the least, don’t need, and can live without. Then, cancel these subscriptions, and unsubscribe to any regular newsletters or other promotional materials from that source. This way, you can sustain your exit from the subscriptions and avoid making any impulse purchases. Although subscriptions may seem like small expenses not worth the trouble to get rid of, they can add up over time, so opting out of as many as possible is a practical idea worth considering to save money. Besides, you can always re-subscribe in the future once your finances stabilize and you still miss the service.
- Consider cheaper housing options
Accommodation is one of the most significant expenses you incur, so it makes sense that housing should feature in your efforts to trim your living costs significantly. Generally, renting and a mortgage plan are the two popular housing options available to many people. Consider relocating to a cheaper apartment or a less expensive area to reduce your rent if you are renting. Getting a roommate is another popular option to consider, ensuring that you don’t have to pay full rent alone. Additionally, you can give up a paid parking space and conduct repairs yourself to lower your rent, so keep this in mind. On the other hand, you can refinance to obtain a lower interest rate and reduce your monthly mortgage payment if you own a house. Similarly, consider renting out a portion of your home for supplemental income that can help you pay off your mortgage.
- Eat at home
As per the US Bureau of Labour Statistics, the average American household spends about $3,008 yearly on dining out. However, many financial experts agree that whatever you save in convenience, you lose money. For instance, if you go out to eat on each workday and spend about $10 per meal, you will spend about $2,500 on food alone. Making your lunch, however, will cost you about half of that. Therefore, consider preparing and eating meals at home to save a lot of money. For this, you can scour the internet for cooking and recipe tips to brush up on your culinary skills. Then, plan your weekly meals to figure out what to eat for the week and stick to this plan. If you lack enough time to prepare food during the workweek, include making chili, a casserole dish, and other foods that will provide several meals into your weekend plans. Then, you can portion your food into one-meal containers and freeze them so you can access quick meals for busy days during the week.
- Shop with a list
A shopping list can help you trim food expenses, plan your meals, and reduce impulse buying. Therefore, it makes sense to always shop with a list to cut down on your costs. Your list can be as straightforward or complex as you want it to be, and there are even apps that can assist you in making these lists and finding bargains. You can keep a running list throughout the week and add items to it before you go shopping. Also, group the items on your list and arrange them according to where they are in the grocery store. This way, you can avoid wandering down aisles that can trigger impulse buying. Furthermore, check whether your store has a rewards program that offers target coupons to your regular purchases and discounts on store-brand items. Many rewards programs have an app, so you can take advantage of these perks at checkout to save even more money conveniently.
- Switch to cash-only spending
Cash-only spending can bring a dose of reality to your financial situation, so consider spending cash only if you are serious about cutting expenses drastically. Cash-only spending forces you to account for every dime you spend compared to a credit card. Indeed, research confirms that people spend more money when they make credit card purchases instead of using cash. Credit cards are mere pieces of plastic that aren’t personal, but it always hurts to see physical cash leaving your hand or dwindling in your wallet or envelope. You can make cash-only spending more feasible by scheduling your regular and essential bills like rent and utilities to be paid through automatic withdrawals. Then, limit the rest of your spending to the cash you have left to ensure that you can’t live beyond your means.
- Consolidate your debts
Student loans, auto loans, and credit card expenses all add up over time unless you pay cash for everything. These debts involve independent expenditures, but you can save significant money by combining them into a single monthly payment. This tactic is known as debt consolidation, and its end goals are reducing your interests, lowering your monthly payments, and enabling you to pay off your debts faster. It takes reportedly up to twenty years to pay off credit card debt if you make the minimum payments, but this can be reduced to as little as three years with a solid debt consolidation plan. Debt consolidation is beneficial if you carry student loans and a balance on more than one high-interest credit card. However, remember to choose a plan that guarantees a lower interest rate after consolidation and avoid taking on any new debt too early to prevent your plan from collapsing.