5 Monthly Expenses That Can Be Reduced in a Single Afternoon

In order to make ends meet and save money for extras, you have to treat the family budget like a family business. That means keeping an eye on your finances month after month and regularly evaluating ways you can cut costs. Believe it or not, there are a number of things you can do relatively quickly to reduce expenses and continue to reap the rewards over the long-term.

Rack up significant savings over time by taking an afternoon to thoroughly assess your budget and make a few adjustments.

Monthly Expense: Utilities

The Fix: Find a Provider With Better Rates

More and more areas across the U.S. are transitioning to deregulated energy markets. A deregulated energy market is one where locals can choose their own provider rather than having to use a supplier that’s selected by the city. This is great news for budget-conscious families since you can get electricity for a lot less – if you take the time to research.

Folks that live in deregulated energy markets can go online, compare available plans and choose power providers with the best rates. Studies in Texas have shown that consumers that fail to comparison shop end up paying more than those that research rates before selecting a provider.

Monthly Expense: Television, Internet and Phone

The Fix: Bundle Services Together

Some will say that television and Internet service is a luxury and they’d be right. But if you work from home it could be a real necessity. Not to mention that TV and Internet entertainment is a lot more affordable than going out. If it’s been a while since you compared your current plan to available offers now is the time to see what else is out there.

One of the easiest ways to get the best deals possible is bundling the services together with a single provider. Typically, providers offer special rates when customers combine television, Internet and/or phone service. Even if you don’t want or use a home phone it could actually be more cost effective to bundle all three together. Another bonus of bundling is it makes bill payments easier to manage.

Monthly Expense: Insurance

The Fix: Keep Your Provider Up-to-Date

Insurance is an intangible expense. Each month you’re actually paying for peace of mind that you’re financially covered if something were to happen. You pay the bill and pray you don’t have to make a claim.

Getting insurance premiums reduced by as much as 25% could be as simple as updating your information. For example, installing a home security system can lower your home insurance premium. Other updates that can get your insurance premiums reduced include:

 

  • ·  Educational attainment
  • ·  Going an extended period with making a claim
  • ·  Improvements on your credit score
  • ·  Adding storm shutters
  • ·  Installing a interior sprinkler system
  • ·  Improving the electrical system
  • ·  Completing a drivers course
  • ·  Moving to a gated community
  • ·  Retiring at age 55
  • ·  Using gas and water sensors around the house
  • ·  Installing impact resistant roofing

 

Review your insurance policies at least once a year to make sure they’re still suited for your circumstances and as affordable as possible. If you use numerous insurance providers you may also want to consider bundling your policies together with one company.

Monthly Expense: Late Fees

The Fix: Set Up Auto Payments

Late fees have direct and indirect costs. You’ll be hit with an additional expense right off the bat, but your credit score could also suffer. When that’s the case it makes borrowing money even more expensive because you can’t get the best interest rates.

The easy fix for these problems is to put bills on auto pay. Almost every service provider and credit card company lets customers create an online account where they can include their bank’s information. Once the bank information is verified the provider can then automatically withdraw the payments. Bill management is much easier and you won’t have to worry about late fees.

Monthly Expense: Savings

The Fix: Use Auto-Debit Features

It’s a lot easier to save money if it’s never in your checking account. Ask your employer if the payroll department can set up an auto-debit so a small chunk of each paycheck goes directly to a savings account.

Another way to save without really trying is to use a roll over option. Many debit card providers will allow you to round a purchase up to the next dollar and put the difference in a savings account. It’s basically a virtual penny jar that’s even easier since it’s automatic.

 

The Easiest Way to Save Up For Your Annual Vacation

I’m constantly amazed how quickly we’ve replaced spending on things with spending on experiences.

One big reason for this is the rise of Facebook. As we scroll through our feeds, we see friends who have spent time in all sorts of exotic locales. Their pictures are beautiful, always filled with smiles. These same friends gush about their vacations when they get home. “The food was amazing! The scenery was breathtaking! The hotel was phenomenal!”

It’s little wonder people so desperately want to travel the world when they’re up against that. Some of us take it to a new extreme, quitting our jobs to pursue a life of full-time travel, even if it is temporary. Most do things a little more responsibly, choosing instead to contain our travel to a two-week window of allotted vacation time.

Many of us have trouble saving up for a vacation, so we finance it instead. That’s a terrible idea. Even a $1,000 vacation financed at regular credit card rates can cost $1,200…$1,500…or even more before it’s paid off.

That’s not what you want to do.

If you’re having trouble saving up for anything, try this trick.

Brown bag your lunch

It doesn’t seem like a big change, but packing your lunch can add up to some serious savings over the course of a year.

Say you’re currently spending $10 on lunch out every day at work, while you could pack something for $3. That translates into savings of $7 per day, or $35 per week. Based on a 50 week annual schedule, that works out to $1,750 in annual savings.

That might not be enough to finance an entire exotic vacation, but it’s a nice start. It’s definitely enough to pay for a week away that’s a little closer to home.

Even if you just eat in four days a week and go out with your office buddies each Friday, it still adds up to significant savings. You won’t quite end up with $1,750, but you’ll still save $1,400.

The powerful reason why

We’ve all heard about the latte factor, which states that little recurring expenses have a way of really screwing up your budget. The latte factor can mean different things to different people. Some people might drink a lot of alcohol. Some might buy too many clothes. Or some might go out to eat too often.

The solution is usually pretty simple. Figure out what you spend too much money on, and cut it out. Or at least reduce it quite a bit.

There’s a problem with that. Restricting ourselves doesn’t generally work. There’s a reason why we crave whatever our latte is. We enjoy it. If we start telling ourselves we can’t have it, guess what we’re going to want even more?

Brown bagging our lunch is a little different. Yes, you are restricting yourself when you do it. But you’re also giving yourself an opportunity to really think about the benefits of doing so.

If you sit at your desk brooding about how your lunch sucks, this plan has no chance of succeeding. You’ll talk yourself into going back to Wendy’s or Subway in no time.

If you take the opposite approach, it’s got a great chance of succeeding. Thinking about your next vacation while munching on your 132nd consecutive sandwich will make the sacrifice seem worth it. You’re making yourself uncomfortable for a specific reason, not because it’s the right thing to do.

Tricking ourselves 

The average person is terrible with money. They need tricks like this to get them to save.

It’s even valuable for those of us who already save a big portion of our income. Saving 10% is great. Saving 15% is even better, especially when you can do so without changing your life in any big way.

A big part of saving is tricking ourselves. Try it today and see how far it gets you.