Cutting Your Expenses - Quick Ways to Stretch Your Income

When you are short on cash, one of the quickest ways to solve this problem is to cut your expenses. This problem has happened to almost everyone at some point. Most people actually live paycheck to paycheck - not saving any money each month. Whether you are in a bind this month or you want to start saving money, cutting your expenses is the first step.

The biggest expense for most people, after the mortgage or rent, is food. This includes groceries and eating out. Logically, this would be the best place to start cutting your expenses. If you are low on cash each month, the first thing to go should be eating out. Many people actually eat out every day! I have a hard time fathoming this, but it is true. I can't imagine spending $5 on breakfast $7-10 on lunch and $15-20 on dinner each day. For one person that is a total of $27-$35 each day. If you eat out like this all month you will average $900 a month eating out. Yikes!

So rethink how you eat out. If you are used to eating lunch out every day then it will be hard to cut it out completely, but you can cut back. The more you can cut back the better. If you can cut back to eating lunch out one time each week you will save $28-40 a week. Thing of what other things you could spend that hard earned money on and that is motivation enough. The point is, restaurant food is extremely expensive compared to groceries, and so the more you can cut back the better on your wallet. As far as groceries are concerned, I have found that pairing coupons with store sales or buying store brand items is one of the best ways to save money at the grocery store.

There are plenty of other places you can cut back on in your budget. Utilities are a big area in most people's budgets. If it is winter turn the heat down, if it is summer turn the AC up. For every degree that you turn your heat down in the winter you will save, on average, 3% on your energy bill. Start thinking about how you use your appliances. Do you use your dryer for everything? Why not start hanging things up to dry? Every time you run your dryer it costs around $.75. That doesn't seem like much, but if you wash one load a day and use your dryer for everything you are spending $22.50 to dry your clothes. Every little bit helps, right?

How about switching to compact fluorescent light bulbs? Especially for those lights that are on a lot. We leave our front porch light on every night, all night. Having an energy efficient bulb in there saves us a significant amount of money each month. How about thinking before you turn a light on? If the sun is streaming in the window, use the natural light to work and live by. It is more pleasant and doesn't cost a dime.

Turn your water heater down some. Water heaters are designed to heat the water much hotter than is needed to kill germs. Lowering the temperature will save money, decrease the chances of someone being scalded, and still kill germs. Speaking of water, do not run your dishwasher or washing machine unless it is full. Doing this alone could really reduce the number of loads you wash each week. If you have to pay a per gallon rate on the water you use, using less can be a big money saver. The biggest one I can think of is water your grass. Try cutting back on that and your water consumption will really decrease - and so will your water bills.

Another great way to cut your monthly expenses is to rethink your cable, phone and internet plans. We just switched internet providers and are getting several months free and then a reduced rate for the rest of the year. Even after the year is up and the rate becomes full price, it will still be $7 cheaper each month than what we were paying. There are so many companies out there competing for your business in the internet, cell phone and cable TV arena that paying attention to the deals and switching when you see a good one can really save you money.

Also cutting back on the type of service you use will save significant money. Do you get every TV station known to man? Do you really watch all those stations? You could cut your bill in half by reducing your TV package and still get plenty of channels. Most people aren't home much anyway to watch all those stations. How about your phone plans? Are you still paying a monthly fee to have long distance on your home phone? How often do you use? We have cell phones that have free long distance (almost all cell phones do), so we don't need long distance on our home phone. Last time I checked that was a $5 a month fee.

There are so many extras that the phone companies talk you into, but do you really need them all? Take a close look at your phone bill and see what all you pay for, but don't use. It will only take a few minutes and will be well worth your time. While you are at it take a look at your cell phone bill too. Making sure that you have a plan that fits your needs will definitely save you money. Do you have leftover minutes each month? Maybe you don't need such an expensive plan. Cutting back on your plan will reduce your monthly cost. Do you go over your minutes each month, paying an extremely high rate for those extra minutes you use? Then you need to get a plan that fits your needs better. In this situation, increasing your plan will probably save you money in the long run.

If you have credit card debt taking a few minutes to contact your provider can lower your interest rate. Making sure that you have a good payment record will benefit you in this area. Call customer service and mention that you think your interest rate is too high and ask if they have any better deals out there. Credit card companies want to keep your business. If they have you as a balance carrying customer, they are making a good bit of money off of you each month. So they will usually lower your interest rate to keep you as a customer. It might be just a temporary thing, but you can always ask again when it expires.

Getting a lower interest rate will make your money stretch farther. If you pay a minimum balance of $40 each month and have an 18% interest rate, not much of that $40 is going towards principal. If you can get your interest rate lowered to 7% you are going to be sending a lot more money towards the principal each month. Another option is a balance transfer. Companies are always trying to take your business away from other companies and one of the ways they do this is by offering great deals. Many times 0% financing on balance transfers - usually for a limited time, but this is a great deal. Paying no interest on your debt and having every bit of your payment go towards the principle will really allow you to pay your debt off fast. Lowering your amount of debt will decrease your expenses in the long run and is always a good thing!

How about other spending areas? What is your weakness? Is it clothing, books, computer equipment, getting your nails done, or going to the movies? Take a close look at how you are spending your money and you will be able to see very quickly where a good chunk is going. Cutting back in that area will free up cash each month for other expenses or to go towards debt or savings. Do you get your nails done every week? Try going every other week. Do you buy lots of new books? Try borrowing from the library instead. Whatever you are spending money on, try reducing that amount. It will always help the situation and is an immediate way to increase your cash flow.

Most people can easily trim their monthly expenses. Taking a close look at how you spend your money will help you to see the areas that you can reduce your spending. Hopefully I have given you some ideas of things to do that will reduce your expenses. Reducing your expenses will mean that you have more money in the budget each month - which is really like increasing your income. Spend it wisely!