The beginning of the year is a great time to refocus and set personal goals. When it comes to finances, I like to sit down with my husband, set a new budget for the year, and figure out where we need to make changes. Keeping track of your spending is key, if you don’t know where your money is going, you won’t know where to cut back. I encourage you to dig deep into your financial statements and create a budget. But while you get that sorted out, here’s 10 steps you can take now to lower your expenses.
I find that the more stops I make, the more temptation I face. Instead, I do as much as I can online and limit the time I spend on errands. I feed the kids before heading out and pack snacks to prevent unnecessary fast-food stops. I also like to send my husband on errands since he’s not a spender and can easily walk away without grabbing extra things.
If you have to head out, limit the amount of money you take with you. This simple trick prevents me from making a stop for coffee, or grabbing a candy bar at the gas station.
2. Social media
Social media has caused me to spend money more times than I care to admit. If a friend shares a picture of her coffee drink, and I immediately get the urge to head out and get my own. I see that one of my favorite stores is having an amazing sale and I feel like I’m missing out if I don’t check it out. My solution, getting rid of social media apps on my phone and limiting the time I spend online.
But it’s how I stay connected with friends and family?
Be honest with yourself, if you’re easily influenced by what you see on social media, you need to cut back drastically. Instead, make plans to meet up with your family and friends. They will appreciate this much more.
The majority of mobile plan carriers base their rates on data usage. The less data you use, the less you pay. So when we were forced to switch providers because ours stopped working in our area, I picked the lowest data package available. This kept our rate fairly close to the old monthly rate we used to pay.
There are many great options on the market today, so it’s not necessary to pay hundreds of dollars for a mobile plan. Most public places offer Wi-Fi connection, so you don’t even have to tap into your data. To ensure I don’t go over our limit, I set up an alert on my phone that notifies when I’m getting close.
Look at your household expenses, your mortgage or rent will likely be the biggest expense you have. Several years ago, we found ourselves in a tight financial spot. Interest rates had decreased, so we took advantage of the lower rates and refinanced. It decreased our payment by $150 per month which yielded $1,800 in yearly savings. Eventually we moved to an area that was close to my husband’s business, but even the move saved us money. We’re saving at least $4,800 per year because our heating/cooling bills have decreased dramatically. My husband now has a short 10-minute commute which also adds to our overall savings. Can you move to an area that’s more affordable? Can you refinance? Or do you have the space to take on a roommate? You have to think outside the box.
Food is one of the biggest expenses in our home. I’m constantly looking for ways to lower our grocery bill and stretch our food budget. So before I head out the door, I write up a meal plan that I base on what we have in our pantry and current store sales. Once my meal plan is complete, I use it to create my shopping list.
By using ingredients that are on sale, I’m able to maximize my savings. I also limit the amount of meat I use in meals and buy in bulk when I find a great deal. By cooking meals at home and limiting impulse purchases, we have saved thousands of dollars each year.
You know all those monthly subscriptions you’ve made over the past year, but completely forgot about? It’s time to nix them. Go through your most recent bank statement so you know what subscriptions you’re paying for. Next, create a list and cancel everything you haven’t used recently. If you haven’t bothered with it in the last month or two, odds are you won’t use it in the near future.
Contact your utility companies and ask about supplier options. I’m fortunate to live in an area that enables us to choose our own gas and electric supplier. This means we can select a supplier with a lower rate which will reflect on our monthly bill almost immediately.
Another simple way to save money is to pay your bills on time. This is such a simple concept, but is not uncommon for people to pay a day or several days late. All of those late fees will add up over time. What’s the solution? Simple, just pay on time. Here’s how:
- Set up automatic bill pay. If you’re budgeting and you know the money is there, just set up this feature with your utility company.
- Write it in your calendar several days before it’s due so you have plenty of time to mail a check or pay online.
- Pay immediately. As soon as you get it, pay the bill and you’ll never have to worry about it again.
Ignoring your bills will not make them go away. Most utility companies will allow payment arrangements depending on your current financial situation. Shutting you off is not to their benefit, so give them a call and find out what you can do to get caught up.
Contact your insurance provider and ask them how you can lower your monthly premiums. Contrary to popular belief, they want to keep you as a customer and most representatives are willing to help. Some options might include raising deductibles, bundling your home, auto and life insurance, or changing your coverage. We were able to save several hundred dollars last year when we lowered our coverage on our oldest vehicle.
If you have it, but can’t afford it, get rid of it. I find it interesting when I hear someone say that they can’t afford to set aside $50 extra each month to apply to their debt or add to savings, yet they shell out over $100 every moth for cable. I understand that at times it feels like a need. Trust me, I get it. But there are many options available now that make it easier to cut the cord.
I’ve done some research and my top recommendations are Playstation Vue and SlingTV. They offer great packages for every budget. Another option is Netflix, Hulu or Amazon Prime. If you can’t afford any of these, YouTube is free and offers plenty of entertainment.
That $5 cup of coffee and occasional $20 manicure can quickly add up. I get it, you worked hard all week and you need to treat yourself. The problem is that we start treating our wants as needs to justify our splurges. If you want to give yourself an occasional treat, add it to your budget. This will enable you to enjoy your treat without any guilt. Why is this necessary? Because it prevents you from spending money you might not have. I truly believe that every household should have a budget to help them manage finances. And although this is not today’s topic, I know that a budget will help prevent a lot of the overspending issues most households face. Track your spending for the next month, find the leaks and plug them.
My advice is that you take these tips and work on them one at a time. There’s no quick fix when it comes to finances and years of bad spending habits won’t change overnight. Are there any specific areas you currently struggle with? I’d love to hear from you!