10 Ways to Cut Your Monthly Spending
When looking for ways to stretch your pay a little further or build your savings, the first place you probably think to cut back is on all the little luxuries—daily lattes, dinners out, and the like.
And while keeping a careful eye on this kind of spending is certainly important, these savings are only one-time events. To maximize your efforts, you need to cut your recurring expenses. Make a few changes to your monthly budget, and watch the savings add up.
Though it might seem that the costs of goods and services only go up, there are ways to save on them if you know what you're doing. Competition and new technology often bring down prices for monthly services such as cable, telephone, and internet. This creates an opportunity to cut those monthly budgeted expenses.
Competition in this industry means that new money-saving cable and satellite TV packages are constantly becoming available. Television and phone/internet providers now bundle together services, so consolidating your phone, internet, and TV services at one company may save money.
New customers, whether bundling services or not, usually get the best deals, so it may be necessary to switch providers. But sometimes simply threatening to switch will net you a discount.
If you're serious about saving money, consider downgrading your package by cutting out pay cable channels. Take it one step further and ask whether you actually need cable or satellite. With streaming video services and a digital antenna, you may be able to get all the television you need without them.
So many people are dropping landlines, it's rare to find a household that still has one. However, if you work out of your home, especially if you're a home call center agent, a landline may still be necessary. In most cases, though, even a home business can operate without a home phone. With a scanner, you can email documents as PDFs instead of faxing; some programs will allow you to receive a fax as an email. If a landline for your business is essential, do you need a second one for your home?
If you do need all those phone lines, keep in mind that, like cable and Internet providers, landline phone service packages keep getting cheaper as competition increases. Consider VoIP or cable phone services. If you have to keep a landline, be sure you're getting the cheapest long-distance service and not paying for services you don't need.
Shopping around for a better package of telephone and/or TV services might also save you on your internet access, especially if you use DSL. There are many other options for internet services, including cable, satellite, fiber, and a host of wireless internet options. Research pricing and options in your area. And remember, the speed of your internet connection directly affects the price, so only pay for as much speed as you need.
The internet is a telecommuter's lifeline, so do your research first. Before you change service providers, be sure the new one will offer the services and reliability your business needs.
Cell phone companies love to offer free phones to induce you to sign up for another two-year contract. Before you renew, ask yourself a few questions:
- Do you really need a new phone?
- What is the hidden cost of getting one?
- Are you using all the minutes allotted, if your plan has limits? If you have an unlimited plan, do you make enough calls to make that worthwhile? The same goes for data.
- Are you paying for data and texting but not using them enough to justify the cost? Or are you using them so much that another plan might be a better deal?
- Would a cheaper plan or a prepaid cell phone serve you just as well?
By simply logging into your account, you may be offered a cheaper package. If not, try calling to ask for one.
Compare prices for auto, home, health, business, and life insurance. Consolidating your plans into one insurance company could lower your insurance costs. That might mean you'll need to take your business elsewhere to save money.
But before you do, be sure you're getting all the discounts you deserve at your current company. Consider raising your deductible for lower rates. Ask your agent what other discounts you might qualify for, such as safe driving rates. Often working from home could mean a discount on auto insurance.
Bank fees are often small but they add up month after month. Check to see if you are still paying a monthly fee even though your bank offers free checking. Particularly if you use direct deposit, most banks offer some type of free checking account.
Do you incur ATM fees because your bank's machines are not convenient? It might be as simple as reviewing your current bank's options, or you might consider migrating your account to a bank with more ATMs in your area.
Refinance Your Home
Refinancing your home could cut your monthly budget expenses significantly, sometimes by hundreds of dollars per month.
But refinancing involves many potential upfront costs (interest points, taxes, fees, etc.), so it may take several months (or even years) for you to realize these savings. The interest rates might not be as good as they were when you originally financed your home. And if you're not planning to stay in the house for long, you could actually lose money on refinancing. Carefully consider the pros and cons of refinancing your home before taking this cost-cutting step.
If you have a credit card with rewards points, use them. But use them wisely. Keep in mind that credit card companies offer points to induce you to spend more. So don't pay more (by racking up interest or fees) to get rewards points. To accumulate points faster, concentrate your spending on the one card that offers the reward you'll use rather than spreading your spending among several cards.
Saving rewards points for your dream vacation or another splurge runs the risk of the points expiring or going unused. Using points regularly helps you cut your monthly expenses. Consider using rewards systems that pay cash or offer gift cards for stores you frequent.
Like phone and cable industries, your utility company likely faces more competition than it once did. In some areas, you can change gas or electric suppliers for a better price while remaining a customer of the same utility company for billing and delivery purposes. Be sure to do some comparison shopping, though, as these other suppliers don't always have better rates.
Of course, the old-fashioned way to save on utility costs is simply to conserve energy usage or reduce water waste.
Monthly interest can be a huge expense for those with a large debt. Making only a minimum payment means the monthly interest eats up most of your payment. Reducing interest can leave more money for other expenses or enable you to pay off debt faster.
One way to lower your interest is to simply ask for a lower interest rate. Companies will often oblige to keep your business. If they don't, consider a balance transfer to another card with a better rate. Read the fine print, though; balance transfers sometimes offer rates that go up after a period and usually involve fees.
Avoid interest in the first place by saving for holidays and other known expenses in advance.