Key Tips to Reduce Your Expenses Every Month
Almost every family wants to find ways to reduce their monthly expenses. Too often, they think that this endeavor is much more complicated than it actually is. There are many ways you can reduce your expenses every month, you just need to put in a bit of effort. Let’s take a look at some of the easiest ways you can reduce your expenses month-to-month, leaving more of your money in your bank account.
Lower Your Electricity Use
Utilities can take up a significant chunk of your monthly budget, but you can’t cut this expense out completely because you need them in order to live a comfortable life. Electricity, in particular, is something that every family relies on every day. The average American home spends 5% to 10% of its budget solely on lighting. That isn’t even counting all of the appliances and devices in your home that also run up your electricity bill.
Luckily, there are ways you can reduce your electricity use. First, invest in energy-efficient lightbulbs. Just two inefficient bulbs use the same amount of electricity as a large computer. The energy-efficient versions may cost slightly more at the store, but you’ll see long-term savings in your electricity bills. The second trick to reducing electricity usage is to unplug appliances and devices when you aren’t using them. Even when devices aren’t turned on, they still use a small amount of electricity if they’re plugged into an outlet. This is known as a phantom charge. While a single phantom charge may not make too much difference in your electricity bill, all of the phantom charges in your home add up to a much higher bill than you should be paying.
Consider other things in your home that turn on automatically even though you might not need them and turn off their pre-programming. This can include things like your home’s sprinkler system and air conditioning. Air conditioning tends to take a significant toll on your electricity usage. Whether you’re among the 65% of homes in the U.S. that have central air conditioning or the 22% that have room or window units, you may be using more air conditioning than you really need to be comfortable. Consider either adjusting your thermostat so that the air conditioning doesn’t turn on as often or turning on ceiling fans rather than a window unit when it gets warm. With these steps, you’ll save a surprising amount on electricity.
Review Your Active Subscriptions
There’s a subscription or service for practically everything today. While this modern convenience can be a delight, it can also be a drain on your bank account. Take the time to review all of the services or subscriptions you pay automatically every month or year. This review can include media streaming services, cloud storage, magazine or newspaper subscriptions, subscription boxes, and smartphone apps. According to an analysis for The New York Times by Mint, digital subscriptions alone cost users an average of $53 a month, adding up to almost $640 every year.
Cut out any subscriptions, digital or physical, that are extraneous. Choose just a few that you can’t live without and that you’re willing to pay for each month. Remember that you can always subscribe to a service again in the future if you find that you really miss it. You might find, however, that you don’t think about that subscription at all once it’s gone from your monthly billing statement.
Consolidate Your Debt
Paying off debt takes a huge toll on the average person’s budget. If you fall behind on payments, you risk being chased after by debt collectors and facing serious consequences such as foreclosure. There are about 143,100 foreclosure filings on U.S. properties in just one quarter, many of which are the result of owners not being able to keep up with mortgage payments. To avoid foreclosure and other dire situations, try consolidating your debt.
For debt resulting from things like mortgage loans or student loans, you can try to consolidate your debt through a third-party loan. Consolidation loans will often give you lower interest rates than your former loan, helping you pay it off more quickly. You can also do this with credit card debt or you can call your credit card company directly and ask for lower interest rates. If you need more help to craft a plan to get out of debt, contact a nonprofit credit counseling agency and consider enrolling in a debt management program. The counselors there can help you consolidate your expenses, work with lenders to lower your interest payments, and set up a budget to get you out of debt.
If you’re looking to reduce your expenses, remember that you have many options. Even small actions like preparing food at home rather than dining out and reducing how much you drive can help reduce your expenses. All you have to do is identify what it is you spend your money on every month and find ways to cut out a portion of those expenses. In the end, both you and your bank account will be much happier.