The 5 Big Changes That Can Transform Your Finances

Whether you’re building an emergency fund, paying off debt, or investing to build a retirement nest egg, you know you need to save more money. But if you’ve been focusing on clipping 50-cent coupons or making laundry detergent by hand, you’re missing the forest for the trees. While those habits can save you some money, there are five areas you should focus on to make a real difference in your financial life. 

Your Job

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There are only two ways to truly change your finances: cut expenses or earn more money. While there’s a limit on how much you can cut from your budget, there’s no ceiling on how much you can earn.

Get a new job. The biggest way to increase your income is to switch jobs since you hold the most bargaining power before you’ve accepted a position.

Negotiate. If you like where you work, it’s time to negotiate with your boss. Make a list of your accomplishments, ways you’ve saved the company money and similar salaries at other companies. Always ask for more than what you’re hoping for — many supervisors will negotiate you down.

Find other ways to earn more. You can also earn more by asking for incentive-based bonuses, taking on overtime, finding a part-time job, or starting your own business.


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Your transportation costs can be a huge part of your budget, particularly if you own a car. And that means there are a lot of opportunities to save in this area.

Research before you buy. Between gas, insurance, regular maintenance, and other costs, owning a car can cost upwards of $9,000 a year. But those costs can vary wildly depending on the make and model. Before you buy your next car, research which ones have the lowest annual cost of ownership.

Stick to a regular maintenance schedule. Regular service jobs are expensive, but nothing is more expensive than delaying a necessary repair. You can find your car’s service schedule online so you know when to set an appointment for a new timing belt or brake line.

Find alternative forms of travel. The lure of the open road is tempting, but it’s also pricey. Riding your bike, using public transportation, or carpooling can all save you money — especially if you live in an area where you have to drive significant distances to get where you need to go.

Cut your commute. Commuting to work every day can cost both time and money. Try negotiating with your boss to work a couple days at home. Doing so will give your budget a boost; if you’re good at it, your boss may allow you to work from home more often.


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The biggest chunk of most budgets is housing. Whether you rent an apartment or own your home, decreasing your housing expenses will have the biggest effect on your total expenses.

Rent out your home on Airbnb. You can take advantage of a great home by renting it out on Airbnb. You don’t need to be gone to take advantage of this; if you have a spare room, you can rent it out while you go about your daily activities.

Take on a roommate. The easiest way to cut back on housing is to find someone else to divide costs with. Not only can you split your rent or mortgage with a roommate, but you’ll also pay less for utilities, Internet, ​and cable subscriptions.

Downgrade to a studio. The cost difference between a studio and one-bedroom apartment can be significant, depending on the size and area. Besides the reduced rent, you’ll also save by paying reduced utilities for less space.

Move outside of the popular neighborhoods. It’s great living near bars and restaurants, but if you’re located near the top attractions, you’re probably overpaying. Moving outside of those areas can save you a big chunk of money on housing.


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Learning how to decrease your insurance costs is even more important today, in an era where healthcare premiums rise more than 10 percent every year. Just make sure you don’t reduce your insurance coverage too much — a huge medical bill or an accident that isn’t covered by insurance could be a financial catastrophe.

Health insurance: The average healthcare premium for a single person with employer-based coverage was $1,255 per year in 2015. Switching to a high-deductible plan can save you money if you’re generally healthy and rarely go to the doctor. You can decrease healthcare costs by negotiating with providers, asking about financial assistance programs and applying for income-based discounts.

Car insurance: If you have an older car, you may benefit from foregoing comprehensive coverage to decrease your premium. Increasing your deductibles will also lower your premium. Don’t hesitate to compare different companies every year to see if your current plan still offers the best rates. If you need renter’s insurance, consider using the same company for that and your auto policies — you’ll often save with a multi-policy discount.

Food and Groceries

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Americans throw away more than $2,000 worth of food annually. That’s enough for a modest retirement contribution or a short vacation abroad. By learning to cut costs on groceries, you can minimize the impact food has on your budget.

Cook in batches. Instead of making enough food for one night, try making meals in batches. You’re more likely to use up ingredients that would go bad otherwise, and you’ll have enough food for lunch and dinner the next day. And it also makes it more likely that you’ll pack your lunch instead of getting take-out.

Freeze what you don’t use. Try freezing what you don’t eat before it goes bad. Not everything is freezable, but most meals and ingredients will be just as tasty when you reheat them. Label those meals by name and date so you remember whether that brown-and-red container is full of pasta sauce or chili.

Base meals on what you already have. Instead of buying five new ingredients every time you cook, use up what you already have. Websites like Feedly can provide ideas on what to make with the random assortment in your fridge.