In today’s economy, getting from month to month comfortably with so many expenses can be difficult. At times, you can barely keep your head above water. Or, maybe you just wish you had more spending money. In any case, it’s not uncommon to struggle financially. But it is common to assume that the solution to this problem is to make more money. While this could certainly help out, so could also lower your monthly expenses. It’s easier than you might think!
Here are five simple ways to lower your monthly expenses.
1. Create a Budget
Some hot tips and tricks can help you instantly cut down on your monthly expenses, and it’ll feel great. However, lowering your monthly expenses can require commitment and discipline; this is where a monthly budget comes into play. A monthly budgeting spreadsheet helps you see how much you’re bringing in every month and what categories you’re able to spend more or less on.
When being strict and sticking to a budget, you typically shouldn’t spend money on things that you don’t need. Monthly bills and basic living necessities come first, and only what is left becomes ‘fun money.’ When trying to stick to a budget, it’s helpful to create shopping lists so that you can avoid impulse purchases. If you’re trying to create a budget but need help getting started, a budgeting app can be extremely helpful. They can even connect to your bank account and track your current spending habits in various categories.
2. Shop for Affordable Insurance
Insurance is something that you need to have, but you don’t necessarily need to spend a fortune on it. By shopping around for insurance and finding the best deal, you can ensure that you don’t overspend. Start by listing all the types of insurance you have: medical, dental, vision, home, car, auto, etc. Then, look at all your bills to see what you’re spending every month.
One of the best ways to save on insurance costs is by shopping around and getting quotes. Compare rates from different companies, and you may be able to find cheaper insurance with the same coverage. It’s easy to get a car insurance or a home insurance quote online. Once you find the best deal, make the switch and watch your monthly expenses decrease.
Pro tip: Another way to potentially save on insurance costs is by bundling. If you really like one of your insurance companies, consider insuring more assets with them, if possible.
3. Update Monthly Subscriptions
It’s easy to overspend on monthly subscription services, especially when you aren’t keeping track of them all. When you initially sign up for a streaming service, monthly meal kit, fitness club, etc., the investment feels justifiable. As months go by, you may notice that you really like your subscription service and want to keep it. Or, you might not use your subscription and forget you’re paying for services you don’t use. It doesn’t hurt to revisit monthly costs.
When evaluating subscription services, list out your monthly costs from each provider. If you set up automatic payments, it might be easiest to look at your credit card statement. You may discover a subscription that you forgot you were even paying for. If you’re not going to start using it soon, cancel and save your money.
Another way to cut costs, if you don’t want to cancel, is by adjusting your subscription. For example, you can opt to have a streaming service play with ads and save $6-$10 a month (it adds up over time). You could also bundle services to save on multiple accounts. When it comes to monthly subscriptions, it’s worth the deep dive. It might be time to unsubscribe on overspending.
4. Cook at Home Instead of Eating Out
A recent study revealed that the average American spends more than $2,500 per year eating out. By simply changing your habits and choosing to eat at home, you can significantly lower your monthly expenses. Your budget will come in handy when tackling this task. You can set an amount for how much you want to spend on eating out and for groceries every month.
First, look at how much you’re spending on average eating out currently. Don’t forget that coffee runs, food delivery services, and fancy dinners for date night all count. Then, figure out how much you can afford to eat out based on your monthly income and budget. Chances are, you’ll have to scale back quite a bit. But remember, paying off debt and feeling more comfortable financially is the goal. You don’t have to completely take away what makes you happy. Just make goals and stick to them.
5. Look Into Debt Consolidation
If you’re currently carrying any form of debt, you may be able to lower your monthly expenses by consolidating. Yes, you’ll still have to pay off your debt, but you can potentially pay less in interest. This means paying off your debt sooner and avoiding unnecessary charges.
When considering debt consolidation, you have a couple of options. First, you could consider a 0% interest balance-transfer credit card. You need a good credit score to qualify, and you’ll get a break from paying interest for a set period. A debt consolidation loan is also an option. Use the loan to pay off your debt, then pay back the loan in installments at a lower interest rate.
Look into debt consolidation sooner rather than later because interest charges can add up quickly. In any case, remember that your spending habits need to change. Debt consolidation won’t help you if you fail to budget and don’t commit to making payments regularly and on time.
Get Your Finances on Track
Lowering your monthly expenses doesn’t have to mean sacrificing your happiness. It might just mean taking a closer look at your spending habits and getting creative with saving. You may think that you have no wiggle room, but you could be overspending without even realizing it.
When you get serious about budgeting and figure out ways you can feel more comfortable financially, amazing things can happen. Financial freedom truly is within your reach. You can achieve a sense of security and peace of mind that enhances your overall quality of life.
