While it is still okay to look for several sources of income to maintain your lifestyle, sometimes the real problem is not how much you generate but how much you spend. A few changes to your daily habits can make a big impact, grow your money, and contribute to positive financial health. Below, we explore eight easy ways to cut expenses and save money.
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Keep a Close Eye on Your Spending Habits
There is no better starting point for cutting expenses than to determine where your money goes. Maintain a record of how you spend every dollar you make and track the spending for about 30 to 60 days. You will be shocked at how much money you incur on certain non-essential items.
However, this will be an eye-opener to help you know where precisely to adjust to save more money. Fortunately, technology has made it easy to track expenses. You can look at your statements if you usually make purchases using a credit or debit card. Consider printing the statement and writing down the costs under needs and wants. You can also use a money app or spreadsheet to track your expenditure.
Leverage Grocery Delivery Apps
Considering how costly daily travel has become, you can save money with grocery delivery apps. Rather than always paying for a bus ticket or using fuel to drive to a grocery store, you can save money and only pay a small fee to get the items delivered to your doorstep.
Besides that, you get to buy at larger quantities, which is often cheaper per unit, and you stay longer without the need to restock. Most delivery apps allow you to create a grocery list by selecting items one by one before making purchases. This enables you to select the items intentionally, avoiding impulse purchases.
Develop a Budget
When developing a budget, know your income, determine your monthly expenditures, and determine how you will prioritize spending to achieve your goals. One of the approaches you can adhere to when budgeting is the 50/30/20 budgeting rule.
With this, you allocate 50% of your income to your basic needs, such as housing, food, debt payment, utilities, and taxes. About 30% should go to your wants like entertainment and eating out, and save 20% of your income. This budgeting method requires discipline to ensure each amount strictly goes where it should be. However, you can as well reduce discretionary spending and increase the amount you save in your emergency fund.
Cancel Unused Subscriptions
If you have active monthly subscriptions for streaming services, publications, memberships, and weight loss programs you no longer use, consider unsubscribing from them. Furthermore, go through your emails and unsubscribe from the regular ads or newsletters from the source upon canceling the subscription. Also, drop any merchandise catalogs that can trigger you to make impulse purchases.
If there are subscriptions you still want to hold onto, you can downsize your existing plan or look for a cheaper plan from a different provider. Even so, avoid committing to an extensive range of streaming subscriptions.
Lower Electricity Consumption and Other Utility Bills
While you need water and power for everyday living, there are ways to lower your monthly utility expenses. It all starts with the simple things, like unplugging electrical devices when not in use, hanging clothes outside to dry rather than running the dryer, and turning off lights when leaving the house or room. You can check out comed rates to see how much you might be able to save.
Consider switching to energy-efficient appliances, including refrigerators, dishwashers, and cookers. Replace incandescent light bulbs with LED options and invest in a programmable thermostat to control your home’s heating and cooling system while away from home.
Consolidate Debts
You might be losing a big portion of your monthly earnings to high-interest debts. Through debt consolidation, you can combine several debts into a single monthly payment. This helps reduce your monthly payment and interest rate, enabling you to clear the debt faster.
One way to consolidate debt is by applying for a debt consolidation loan. With this, you take a large sum of money as a loan from a credit union or bank to settle all the smaller debts. You need a high credit score and a perfect loan payment history to get approved for such loans.
Alternatively, if you need a better way to manage your credit card debts, a debt management plan might be precisely what you need. This involves working with a nonprofit credit counseling program that helps you generate a monthly budget for paying off your debts. You only need to send a single monthly payment to the agency, which makes payments to individual creditors.
Look for Affordable Housing Options
Housing is among the biggest expenses. If you live in a rental property, consider moving to a less expensive area or apartment to save money on rent. You can also get a roommate to share costs, rent out the parking space at a fee, or request to do your own repairs for a reduction in the monthly rent.
On the other hand, if you already own a home, you can seek refinancing to reduce your monthly mortgage payment and interest rates. You can also rent out the house for the short term and opt to live in a rented property.
Your journey to lowering expenses and saving more money starts today. When you start early, you get to save more money. Identify which strategies to prioritize to get your finances in order and clear debts.