If your budget has gotten off track or you’re having a hard time sticking to it, it may be time for a refresher on ways to cut costs and live more frugally.
In America, this is how we spend most of our income (in order): housing, transportation, food, personal insurance and pension; health care, entertainment, clothing, and charitable contributions.
Let’s look at some ways you may be able to save in some of these areas:
The cost of housing includes more than the rent or mortgage. For example, the costs of utilities are increasingly expensive but you can reduce these costs by unplugging electrical devices when not in use, not setting water heaters higher than 130F (which costs you more than its needs too) and taking shorter showers. According to the EPA, Americans use more than 1 trillion gallons of water every year just for showers. If you cut your shower time by 2 minutes, you can save money and help the planet.
We also pay more for internet than similar countries and get slower service in return. Knowing this, be sure to compare plans before you agree to a service provider. Shop around for phone service to get the best plan you can find. Your smartphone is still most likely okay to use. I’ve had mine since 2013 and it works just fine.
Buying a car is the first expense, but you still need to maintain it. If you already own a car, you can cut costs by taking care of it to minimize large repair bills in the future. If you don’t own a car and are thinking about buying one, consider how much you’ll need to drive it and why. It costs a lot to operate a vehicle. Can you walk or bike to work or join a carpool? Do you live in a city that has a good public transportation system? If so, take advantage of these options while saving to improve your financial situation.
You can easily save money on food by cooking your meals more and eating out less which can also be healthier. You can save a lot of money by packing lunches. If you buy lunch daily, cutting back three days can save you on average $20 week which adds up to more than $1,000 a year. That’s money you could have invested, saved, or paid down some of your debt with.
If you have life insurance or other personal insurance, you may be able to get a lower rate on your premiums by paying annually instead of monthly. Look over your policy carefully and talk to your insurance provider to find additional savings.
Health care costs
Know your plan. Before you can maximize the benefits of your healthcare plan, dive into the fine print including what your deductibles and out-of-pocket costs will be.
Instead of going out 3-4 nights a week, make snacks, have some friends come over after work, and ask them to bring the beverages. Wake up a bit earlier to catch the matinée, look for reduced entry days for the latest exhibit. If your entertainment takes a slight effort to cut costs, it doesn’t mean it’s less fun.
The average American spends $1,500 a year on clothes. Many of us have clothes we haven’t worn in months or years, yet we keep buying more. If you think you’re spending too much on clothes, you can shop off-season and take advantage of the low prices. Buy used at an upscale secondhand shop in your area. Stick with basic pieces to mix and match.
Tithing to your local church is important. When it comes to additional giving, if you’re just getting started financially or getting back on the right track, consider donating your time and talents instead of your money to causes and organizations you support. There are many ways to help.
Some expenses you must pay. But there are many ways to cut back on your spending now and move toward your future financial goals, giving you more options and freedom in how you live.