If you’re working on building up savings and reducing credit card debt, it starts with tracking your expenses to identify your biggest spending categories. You might be surprised at the results! Most people tend to overspend on their monthly expenses, especially if they aren’t carefully tracking them.
After you’ve established a good habit of tracking expenses, look into ways to cut back. One blogger shared her experience of cutting her monthly expenses in half simply by making a few changes to her monthly spending.
“We were ruthless, leaving no bill or expense unturned,” she says in her blog Don’t Waste the Crumbs. “In the end, we found a way to cut our monthly expenses in half AND start setting aside money towards an emergency fund.”
If you’re looking to put a little more cash in your pocket or build up savings, apply the following tips:
1. Cut Cable
Cable or satellite TV is a nice luxury, but it’s not a necessity. Cable bills average about $99 per month, and they tend to increase slowly over time.
There are dozens of free and affordable streaming services available to replace cable. Pluto TV, for example, is a free streaming service with more than 75 partners. You can still watch TV at the end of a long day without paying a cent!
2. Eat More Economically
How many times have you second-guessed buying a $50 pair of shoes, but had no problem spending nearly the same amount at a restaurant? The average American spends $6,602 a year, or about $550 per month on food.
You can’t cut out eating like you would cable, but you can cut the amount you spend by employing more economical methods. Start by minimizing eating at restaurants and buying pre-packaged meals.
“We can’t be doing the same thing the same old way,” Sheryl Garrett, author of the Personal Finance Workbook for Dummies, told Bankrate. “But what we need to do is try to remember two simple words: whole foods. Instead of buying prepared, frozen, twice-baked potatoes, buy a real live whole potato. It costs a fraction of the price, pennies per pound. And it probably even tastes better.”
3. Shop Around for New Premiums
Homeowners insurance, auto insurance, life insurance, health insurance, wireless services, and other regular monthly expenses can increase slowly over time. There might be more affordable premiums available.
When it comes time to renew your premiums every six months or so, shop for the best deal. Get quotes and use them to either negotiate with your current provider or switch to a new one. Switching is usually pain free, and you can save hundreds a month with your new premiums.
4. Walk or Rideshare
If it’s an option for you, leave the mechanical transportation behind and opt for walking or biking instead. Americans spend more than $2,000 per year to fill up up their gas tanks, and if you have a long commute, that amount can double.
If walking isn’t an option, take the bus or find co-workers who wouldn’t mind carpooling with you. You might be surprised how much you can save.
5. Turn Down the Thermostat
Gas and electricity bills don’t have to be as astronomical. Turning the heat down just three degrees can save you 15 percent on your heating bills. The same goes for turning up your air conditioning by three degrees.
You’ll reap even more savings if you continue lowering the thermostat. “The rule of thumb is that you can save about 3% on your heating bill for every degree that you set back your thermostat” says Bill Prindle, deputy director for the nonprofit American Council for an Energy-Efficient Economy.
6. Unplug Your Devices
Your electricity bills might be unnecessarily high. Your consumption of television and other devices will raise your electric bill significantly. Take a walk or enjoy other activities to limit the costs of electricity in your house.
“You can reduce your bill even more by identifying and unplugging ‘energy vampires,’ devices such as cable TV boxes and DVD players that use electricity even when turned off,” says Cameron Huddleston of Go Banking Rates. “They can account for up to 20 percent of your electric bill, according to Duke Energy, the nation’s largest electric power holding company. Since the federal Energy Information Administration found the average monthly electric bill to be $114 in 2014, you could save about $23 a month by unplugging all of your ‘energy vampires.’”
This process of cutting expenses and building more financial wealth can be cumbersome. Just remember to be patient. With time and discipline, you’ll find financial success. Someday, you could be living like a king because you had the patience and self-control to cut back and save more now.