Cutting $500 of your monthly expenses may seem difficult at a first glance, but when you think that this means saving just an average $16 per day, you realize that you can actually do it. Fortunately, there are multiple ways in which you can lower your expenses just by being smart about where your income goes.
1. Cut your groceries bill.
There are ways to reduce your groceries bills significantly, with small steps that not affect in any way your quality of life. According to 2016 data from the U.S. Department of Agriculture, a family of four spends up to $1, 284 a month on food so there is a great saving opportunity here. Besides buying nonperishable, frozen, or in bulk, you can also grow your own herbs and vegetables, or cut meat from your meals at least one of two days a week. By using coupons, buying on sale and cooking at home, a family can save a few hundred dollars a month. Recent 2017 USDA studies suggest that a family of four can spend only $642 a month on a frugal food plan.
2. Reduce your credit card payments with a balance transfer.
If your current credit card balance and interest rate are only profitable for your bank, you can easily change that in your advantage by switching to a 0% balance transfer offer and thus pay a dramatically lower amount each month. Depending on the current deal you have, it is easy to save up to $500 just with this single step. Surely, balance transfer fees eat up a lot of your money.
3. Ditch cable TV or search for a better deal.
According to a study released in 2015 by the Leichtman Research Group, the average monthly bill on cable TV is $99.10. Ditching it can save you around $100 a month, which is definitely a significant amount. The great benefit is that you can still get all your entertainment from the Internet and you will not feel that you’re missing much. However, not all of us are willing to give up cable TV for good, but there is surely a way to lower your bill by giving up on premium channels that don’t add much value to you. Try to stick to the basic package.
4. Reduce your electric bill.
Lowering your heating and cooling costs is very feasible, without having to sacrifice your comfort. Just invest in a programmable thermostat that can automatically adjust the temperature when you’re not at home. A few degrees can make a big difference on your bill. You also probably have in your home devices that use electricity even when turned off, such as DVD players, cable TV boxes, and others. You can cut a good fraction of your bill just by unplugging these. Duke Energy, the largest electric power holding company in the U.S., revealed that these kind of devices account for up to 20% of your bill. Check your electricity bill and you can figure it out how much you can save monthly just by unplugging devices that consume power unnecessarily. Don’t forget to turn off the lights when you leave a room.
5. Stop eating out.
Surveys revealed that the average person spent more money at restaurants and bars than at supermarkets between 2015 and 2016. This suggests that most Americans don’t see cooking as proving enough value. However, from a financial standpoint, eating your meals at home and going out less can be a tremendous benefit for your monthly budget. An average $3, 008 of the American household income went for restaurant meals in 2014, according to Bureau of Labor Statistics, which only highlights the possibility to cut significantly your expenses just by eating out less.
6. Quit the gym.
Although this might seem counterproductive at first, the truth is that you can still get plenty of exercise outside the gym. A healthy lifestyle does not have to cost a lot, when you have many free alternatives that offer equal value as the gym. Depending on how many days per month you actually make use of your gym membership, it may prove an avoidable expense. Your free options to stay fit and healthy include walking, jogging, dancing, hiking, swimming, or hiking. Depending on where you live, you can take up one or more of these activities instead of going to the gym. Moreover, there are plenty of workout videos and exercise classes available online for free. Since the average monthly gym membership is around $60, this is how much you can save.
7. Check the possibility of a refinancing for your monthly mortgage payment.
Most probably, your house is worth much more now than when you bought it and if interest rates have dropped since your mortgage rate was set, you can seek refinancing to reduce your monthly mortgage payment. A 2016 study by Black Financial services discovered that 3.3 million homeowners could save $200 or more just by refinancing their mortgages.
8. Drive less.
This is a great hack to cut your monthly expenses yet few people actually consider it, especially since cars seem to be everywhere and have become a huge part of our lives. However, owning a car comes with many costs when you add up gas, repairs, washing, and insurance. Depending on where you live and the distances you have to cover daily, you may consider leaving your car at home more often. Public transportation is a good alternative to driving, especially since you can save up on the time spent on traffic. Just to give you an idea about much you can save, the American Public Transportation Association released a report which estimates that the average person living in 16 of the 20 largest American cities can save over $10,000 a year by using public transportation. If you don’t like public transit, walking and riding a bike add great value to your health, besides the financial merits.
9. Shop around for the best insurance deals.
Automobile and home insurance should not be taken lightly, but that does not mean you cannot be savvy when choosing your coverage. As your car ages, for example, insurance should cost less and that is why switching policies can be a great deal. You can also shop around for a better deal at another company. Make sure to choose a company that offers discounts for choosing more than one policy from their offer. The J.D. Power 2016 U.S. Insurance Shopping Study discovered that switching insures for a better auto insurance rate can help a customer save $356 on their annual premium.