Cutting Your Monthly Expenses - Quick Ways to Stretch Your Income
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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 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. Think of what other things you could spend that hard earned money on and that is motivation enough. Restaurant food is extremely expensive compared to groceries so the more you can cut back the better on your wallet. As far as groceries are concerned, I have found that combining coupons with store sales or buying store brand items is one of the best ways to save money at the grocery store.
Utilities are the next biggest 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 each month.
Turn your water heater down. 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. Only run your dishwasher or washing machine when it is full. If you have to pay a per gallon rate on the water you use, using less can be a big money saver.
Take some time to evaluate 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. If you are not locked into a cell phone plan shop around. There are many options that do not require a long term contract like Straight Talk. You can pay a low monthly rate for unlimited everything. Cut back on the number of television stations you get to save money each month.
If you have credit card debt contact your provider to ask for a lower interest rate. Making sure that you have a good payment record will benefit you in this area. 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 a reduced rate for any amount of time will help you get ahead on your monthly bills.
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. 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. 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!