- Personal Finance
Cutting Costs: Save Money on Existing Expenses
According to the Federal Reserve, 43% of American families spend more than they earn. Other independent studies maintain that $1.22 is spent by Americans for every dollar they earn. If these statistics describe you, it is time to take a serious look at your spending.
Save Money on Existing Expenses
Where can you save money on existing expenses? What little luxury can you give up, or cut back on? Remember, in finances, small things can make a big difference. That $1.50 cup of coffee you get on your way to work each day equals about $375 a year. By brewing your coffee at home, you can save a fair amount, even brewing the same brand of coffee you are currently buying.
While thinking about food, have another look at your budget. How much are you spending for food each month? How much of that is eating out? If you were to trade one meal out each week or begin making your own lunches, how much would you save?
Now take a look at your entertainment category. How much of what you are paying for really gets used? Could you cut out one feature, and never miss it?
Internet, telephone and cell phones are other places where simple changes may mean big savings. Be careful of the contracts you sign. Most cell phone contracts lock you in for two years, unless you upgrade. Don’t pay for more than you need. Also, if you always use your cell phone, do you really need a land line? Or, if you are home most of the time and rely heavily on your land line, would a pre-paid cell phone serve you just as well? The cost of internet varies greatly from one region to another. Shop around to find out what is available in your area.
Other utilities, such as trash, gas, electricity and water, are under your control also. By shopping around, you can make sure you are getting the best deal. Look into getting a larger propane tank, so that it can be filled when prices are low. Turn down the heaters to 65 degrees at night and when no one is home. Close off rooms that are not frequently used. Put on a sweater and socks, before turning up the heaters.
Transportation costs can be cut in a number of ways. If you drive to work, consider carpooling or using public transpiration. Consider the cost effectiveness of the vehicle. Could it be traded in for something that would serve you just as well, but get better fuel mileage without a major increase in monthly payments? Carefully consider how many times a week you drive somewhere to get just one or two items. By combining your errands and shopping for a week’s worth of groceries at a time, you will save on fuel, tires and maintenance.
(c) Copyright text and photo Christa Dovel 2010