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Do the expenditures you make to run your household eat up all of your paycheck or exceed your income? Are you living week to week and paycheck to paycheck? Even worse, have you lost your job, or are you trying to live on unemployment? This article can't help you replace that job or provide you with additional pay, but it can help you cut back spending in ways that are hardly painful, and that will mean extra money in your pocket.
With the economy in a slump, that looks like it may be with us for awhile, everyone can always use some extra cash. Many household expenses are fixed, but a number of them can vary from month to month. Continue reading for some ideas on how to cut household expenses in areas of importance, and find pockets of additional money to either put away for a rainy day or apply to current bills.
We've compiled 95 tips to show you how to curb your spending. This guide will show you how to reduce your household expenses on everything from utilities to groceries to gas. -
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Tips to Cut Expenses
- Eating out costs much more than eating in. Make restaurants an occasional outing.
- Rent movies, or borrow ones from the library, instead of paying for cable.
- Rent movies, or borrow ones from the library, instead of paying for cable.
- Make energy-efficient changes to your home, like unplugging unused appliances and using compact flourescent lightbulbs.
- Use coupons and buy in bulk at the grocery store.
- Don't let your car engine idle; it burns more gas than turning off the engine and then re-starting it when you're ready to go.
- Buy generic prescription drugs.
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Step 1: List Current Expenses
- In order to have a better idea of how you personally can cut household expenses, you need to determine what your current expenses are.
- Collect all the receipts, bills, and financial statements that you can find. If you haven't saved such things in the past, start saving now and take a look at them after a month or so.
- Create categories for your expenses.http://lifehacker.com/software/budget/hack-attack-time-to-budget-185935.php You don't want to make a separate budget amount for every possible expenditure. Instead, you should plan on spending a specific amount of money on areas of expenditure in your life.
- For example, group airfare, train fare, and gasoline for long trips under a single category: travel.
- Write down fixed costs. Bills fall into this category, as well as commuter passes and other items you spend a given amount on each month.http://lifehacker.com/software/budget/hack-attack-time-to-budget-185935.php
- Calculate the average monthly cost of other items. For instance, you may not buy clothes every month, and each time you purchase new items the cost differs. Try adding up how much you've spent on clothes during the year, if you have those records. Then divide by 12 to get the average cost per month.
Step 2: Examine Monthly Expenses
- Before you set a budget, try to find ways to reduce your monthly expense. By reducing the cost on your regular bills, you'll have an automatic way to save money each month, and a more accurate budget.
Telecommunications
- The Simple Dollar notes that most Americans should look to their Internet, telephone, and television services when they want to cut back on technology expenses.
- Bundle your services. Many telecommunications companies offer discounts if you get all your services (phone, cable, Internet) with them.
- Do you really need cable TV? Consider dropping it. Cutting the cord will force you to find other sources of entertainment, and can save you a lot of money.
- When you really need your TV fix, go online to sites like Hulu.com, Joost, or Prime Time Rewind to watch some of your favorite shows.
- If you mostly use cable to watch movies, consider signing up with a DVD rental service like Netflix or Blockbuster by Mail. The most expensive plans cost about $20/month, generally less than a cable subscription.
- Examine old telephone bills to figure out how you use your phone. Shop for the least expensive plan that meets your needs. If you're a cell phone user, you may find that you're paying a monthly fee for minutes or features that you never use.
- If you absolutely need a cell phone, consider using it as your primary phone as well and dropping the land line.
- The Simple Dollar recommends switching to VoIP for all your telephone needs. With a VoIP service, you use your computer's broadband connection to make phone calls. Most VoIP packages cost less than traditional land lines and cell phones.
- Choose carefully, though, as with some providers you can only call other users of the same service.
- Skype and Vonage are two popular providers.
Utilities
- Look into getting a free home energy audit from your gas or electric company.
- Use an online tool, like Energy Guide's Home Analyzer, to examine your energy usage.
- Consider living in a smaller house. If you get rid of things you've packed away in attics and closets, you may find you can get by with much less square footage. You can sell those things at a yard sale for some extra cash.
- Smaller houses cost less in utilities as well as when it comes to purchasing and mortgaging.
- Shop for a better deal on energy. Companies can now compete for your business in many states, so check out some of your local utility's competitors.
- Install a programmable thermostat to help regulate your house's temperature. If you have a set schedule, you can program different temperatures for different times of day accordingly.
- Buy Energy Star appliances.
- Use compact fluorescent light bulbs (CFLs). This is an almost universal recommendation for reducing home energy bills.
- Install energy-saving windows. They'll save you money on heat in the winter and AC in the summer.
- Unplug appliances and electronics. They drain electricity even when turned off.
- Plant shade trees to help cool your home.
- Wear clothes a couple of times before washing to save money on energy and water usage, as well as detergent.
- Dry your clothes on a clothesline or drying rack in your home. Believe it or not, that's the way everybody used to do it.
Student Loans
- You may be able to pay less each month on your student loans. Check if you qualify] for loan consolidation.
Step 3: Make a Budget
- Once you've got an idea of what you currently spend in different categories, create a budget for the future, choosing areas where you think you can cut back on expenses.
- Try to spot categories you can cut back, but be reasonable. If you set unreasonable goals, you'll get discouraged and may give up.
- Estimate what you'd like to spend on categories for which you don't have records. If you don't have records of what you've spent on things like clothes over the year, try to make a guess at how much you spend each month.
- Keep close track of all your expenses over the next couple months. Save all receipts and statements that you accrue during the week. Keep them in a safe place where you can find them to record later. Don't forget to note cash transactions.
- Compare what you thought you spend to what you actually spend. Hopefully, your estimates were on par. If not, make changes to your budget accordingly.
- Identify more areas where you think you should cut back. Adjust the budget for that category, and discipline yourself to stick to it.
- Come back to your budget at the end of each month to see how you're doing. If you have some extra money, make a budget category for savings or debt repayment and put that money to good use.
- For more on budgeting, see Mahalo's How to Make a Budget.
Step 4: Curb Your Spending
- One important way to cut down on your expenses is to take care of your stuff and yourself. The more quickly you wear your possessions out, the more money you'll spend replacing them. Similarly, if you take care of your body's health, you won't wear out or get sick as quickly. Fewer visits to the doctor is always good for the wallet. So follow these guidelines to curb your spending.
Save on Big Purchases and Clothing
- Buy used. Talk to your friends, scour Craigslist or eBay, and explore a few thrift shops.
- Pay with cash when you can to avoid paying interest on big purchases.
- A bank like Smarty Pig can help motivate you to save up enough to buy something outright, instead of on credit.
- Shop online. You might be able to get a better deal on purchases from a company that doesn't have to pay the overhead associated with a brick-and-mortar storefront. You'll also save on the gas it would take to go to the store.
- Discover thrift shops and the thrill of a great find.
- Buy during sales -- but only buy what's on your must-have list. Don't buy something only because it's cheap.
- Stick to machine-washable clothes to avoid dry cleaning expenses.
Groceries
- Cut back on your alcohol consumption. Alcohol is not a staple, and it's expensive. Try to wean yourself from it.
- Water, not soda. It's better for you and is much less expensive than soda, juice, and other store-bought drinks.
- Eat less expensive protein. Non-meat sources of protein, like beans, tofu, nuts, and eggs, cost less than meat.
- Find what's on sale at the grocery store and plan your meals accordingly.
- Buy ingredients rather than pre-made dishes.
- Compare prices rather than buy retail. One brand may look more expensive only because more comes in one package.
- Buy items that don't expire in bulk.
- Make big batches of food and then freeze it.
- Buy frozen vegetables rather than fresh on occasion. They're less expensive, and you won't waste as much money throwing out veggies that have gone bad.
- Learn the art of crockpot cooking. Depending on what you include, crockpot meals tend to be very inexpensive, and you can easily freeze many leftovers.
- Hunt for coupons and make sure to use them! However, don't get something not on your list just because it's on sale.
- Be creative with what you already have. Go to a site like Super Cook, type in an ingredient, and see what you can come up with.
- Watch that register! Make sure that everything rings up for the proper price, and that the cashier doesn't accidentally double-scan anything.
- Sign up for your store's savings card programs. Sometimes store discounts only apply to members.
- For more tips on saving at the grocery store, visit Mahalo's How to Save Money on Groceries.
Step 5: Find a Good Bank and Then Pay off Those Credit Cards
- Once you've got some money, it makes sense to put it somewhere that's safe and where it won't cost you anything just to keep it.
- Research banks to find ones with free interest checking and minimal fees and surcharges.
- Try online banking for a great interest rate and fewer fees.
- Kiplinger.com provides a list of their top ten E-Bank picks.
- Know what fees your bank charges so that you can avoid them. Try not to use ATMs that aren't part of the bank's network, and keep an eye on your balance at all times. You don't want to pay huge overdraft fees.
- Call your credit card company and ask for an interest rate reduction if you already have credit card debt.
- Or search for a card with a lower interest rate.
- Pay down your balance as soon as you have some extra money.
Conclusion
- If you can implement even a few of these changes into your habits, you'll be on your way to saving money and improving your financial outlook. Reward yourself along the way to encourage further money-saving practices. Once you're in the black, discover how to invest your money so that you can secure your future as well as your present.
