Since the economic downturn, more and more families are scrutinizing their monthly budgets and working to take back control of their finances. Often, it is an unfortunate event, such as a job loss or home foreclosure, that requires action. Don’t wait for this – start now! An obvious starting point is discretionary spending. For instance, reduce the amount of money spent on entertainment and dining out. This is a piece of cake. However, people often stop there, foregoing significant additional savings. For families who have already gathered the low-hanging fruit from their budget, it is time to dig a little deeper and find other ways to save. Follow these simple tips, and you will be amazed to see how much you can shave off your bills!
1. Tackle the Big Items
This may seem counter-intuitive. After all, most families begin their journey to savings by cutting back discretionary spending, which accounts for a small fraction of their monthly budget. However, for families that need to find big savings, nothing should be off the cutting-block and large expenses should receive the same scrutiny as small ones. Housing is typically a family’s single largest expense, yet is usually viewed as unchangeable. However, downsizing one’s home is worth considering, and it could save a family hundreds of dollars per month. Even if a family is not in a position to move, they may be able to refinance their mortgage to a lower rate, or negotiate a less expensive rent. Never be afraid to consider these possibilities. A second ’big ticket’ item for many families are car payments. Many families with multiple cars are paying more than one car payment each month. To reduce expenses, consider keeping the current vehicle after it is paid off, or at least alternate new car purchases, so that only one car is in repayment at a time.
2. Reduce Utilities
Utility bills, such as water, electricity, natural gas and garbage collection, can cost families several hundred dollars per month. By eliminating waste, families can reduce these bills significantly. A family can reduce water consumption by hand-washing dishes, taking shorter showers, and only running the washing machine for full loads. To conserve electricity, unplug small appliances and cell phone chargers when not in use.
3. Cut Subscriptions
Many families pay monthly membership fees to community centers, gyms, or yoga studios, as well as subscriptions for newspapers, online entertainment streaming, and magazines. If you’re not making use of these facilities, perhaps it would be more cost-effective to access them by paying a per-use charge, rather than a membership. Newspapers, magazines, DVDs and even e-books can be found at libraries for no charge. By eliminating unnecessary memberships, families can potentially save hundreds of dollars per year. Even if you love your yoga, couldn’t just practice on your own with the help of YouTube? Can’t you get the same benefits of swimming in a pool by running outside?
4. Negotiate Lower Contracts
This is another area that can yield big savings. First, make a list of current service providers, including internet, cable or satellite television, land-line and cell phones. Second, research current specials and subscription offers for your area, both for your current providers as well as the competition. Third, contact your current providers, and ask them what deals they are willing to offer to keep your business. If they cannot match or beat the competition, be willing to change providers if necessary. It does require a bit of legwork, but consider that for every bill that is reduced by fifty dollars per month, that represents six hundred dollars in savings per year!
For many families, reducing monthly expenses can be a challenging balancing act. However, those that commit to balancing their budget are rewarded with financial freedom.