Bruno Pugh
Two social constructs are always at loggerheads—”YOLO” (You Only Live Once) and “Saving for Rainy Days.” While you don’t want to deny yourself basic amenities and comfort, you don’t want to overindulge and jeopardize your financial future. Striking a balance between enjoying the present and preparing for the future is paramount. It’s necessary to understand practical ways to manage your finances effectively, ensuring you can live comfortably now while still saving for unexpected expenses and future goals. Here are 15 strategies to help you cut back on monthly expenses
Control Energy Usage
Energy costs like light and heating are known guzzlers of monthly expenses. Implementing energy-saving practices like using LED bulbs and unplugging electronics when not in use can lower electricity and heating bills. Energy Star estimates households can save around $180 annually using a programmable thermostat.
Cook at Home
Instead of a $10 lunch out, make a $2 sandwich at home and save $160 monthly if you’re doing this for 20 workdays! One can save a significant amount on food expenses by strategically planning meals, buying groceries in bulk, and cooking at home. Meal prepping and using coupons or discount apps can further help cut costs.
Limit Subscriptions
Go through your bank statement and cancel unnecessary subscriptions such as streaming services, gym memberships, and magazine subscriptions. When you opt for free or lower-cost alternatives, like using the local library for books and movies or exercising apps at home, you will notice a significant difference in savings.
Use Public Transportation
Although the convenience of always having a car at your disposal is undeniable, reducing car usage can save on gas, maintenance, and insurance. Using public transportation, carpooling, biking, or walking for short distances can lower transportation costs significantly. For those who need a car, shopping around for better insurance rates can also help.
Shop Smart
Be strategic about shopping by making lists to avoid impulse purchases, buying generic brands instead of name brands, and taking advantage of sales and discounts. Use cashback or reward credit cards for essential purchases, and be sure to offset the balance monthly to avoid interest payments.
Refinance Loans and Credit Cards
Refinancing your mortgage or consolidating student loans can significantly reduce interest rates and monthly payments. This can be done by transferring exorbitant interest credit card balances to one with a more affordable rate or a 0% introductory rate, which can also save a lot on interest. For example, moving a $5,000 credit card balance from a 20% APR card to a 0% APR card for a year can save you about $83 per month in interest.
DIY Projects
DIYs are not just about hobbies and frivolities; they can be quite practical in helping to cut back on expenses. Taking on do-it-yourself projects can save on labor costs for home repairs, maintenance, and even crafting gifts. Learn basic skills through online tutorials for plumbing, painting, gardening, and simple home repairs.
Entertainment and Leisure
Choose low-cost or free entertainment options like visiting parks, attending free community events, or hosting movie nights at home. Libraries grant access to books, movies, and even video games at a negligible cost. Instead of spending $50 on a night out at the movies, have a game night at home with friends or family, which can be both enjoyable and free.
Adopt a Maintenance Culture.
Besides using public transit, maintaining your vehicle ensures it runs efficiently, which can save money in the long run. Regularly check tire pressure, change the oil, and keep up with maintenance schedules. Properly inflated tires can reduce gas mileage by up to 3%, translating to fuel savings — about $3 per $100 spent on gas.
Review Insurance Policies
Regularly review your insurance policies to judge if you’re getting the best rates. Shop around for auto, home, and health insurance annually. Consider increasing deductibles to lower premiums if you have a solid emergency fund. Practically, raising your auto insurance deductible from $400 to $8,000 could reduce your premium by 10-20%. Also, bundling all your insurance needs with the same provider can often lead to discounts.
Reduce Banking Fees
Switch to a bank or credit union that offers free checking accounts, no monthly maintenance fees, and no minimum balance requirements. Many online banks offer these features along with higher interest rates on savings accounts. Regularly check your statements for any fees and negotiate with your bank to have them waived, or consider switching to a more wallet-friendly bank.
Embrace Minimalism
A minimalist lifestyle transcends fashion and can lead to significant savings. Declutter your home and sell items you no longer need on platforms like eBay, Craigslist, or Facebook Marketplace. This not only brings in extra cash but also reduces the urge to buy more stuff. Additionally, buy only what you need and focus on quality over quantity. A minimalist wardrobe with versatile pieces can save you money on clothing.
Negotiate Bills and Services
Many don’t realize that bills and service costs can often be negotiated. Call your cable, internet, phone, and other service providers to ask for discounts or promotions. Threatening to switch to a competitor can often result in a better deal. This can also apply to medical bills, where negotiating with hospitals or clinics can lead to reduced charges or affordable payment plans.
Monitor Cell Phone Plan
Do you really need an unlimited data plan? Switching from a $70 unlimited plan to a $30 plan with sufficient data could save you $480 annually. Evaluate your cell phone plan to ensure it matches your actual usage. Many people overpay for unlimited plans when they use much less data than they think. Additionally, consider family plans or group discounts, which can further reduce costs.
Reduce Water Costs
However indulgent it is to run a luxurious candle-lit bath often, showers can significantly reduce water usage in place of running baths. Baths guzzle about 70 gallons of water to fill, while a five-minute shower with a low-flow showerhead uses only about 10-15 gallons. Use a dishwasher and washing machine only with full loads, and consider installing a rain barrel to collect rainwater for gardening.
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