According to a recent survey, nearly half of all Americans live paycheck to paycheck and this trend goes across all salary ranges. No matter your income, reducing your expenses can improve your financial stability and help you plan for the unexpected. There are many ways to cut back spending and boost your savings – even if you aren’t great with budgeting or saving. Here are 10 easy ways to reduce your monthly expenses with very little effort.
#1. Adopt better driving habits
Gasoline for your car is probably one of your biggest monthly expenses. Did you know you can reduce monthly gas spending regardless of gas prices? You can actually save a bundle each month if you stop speeding. Driving 55 mph instead of 70 mph increases your fuel efficiency by 17%. You’ll only lose a few minutes of time, even on a long drive. You should also keep your tires properly inflated to boost efficiency by 1%.
#2. Stick to a grocery list
American households spend about $6,600 on food every year. Eating at home and focusing on lower-cost menu options can save you hundreds every month. Create a menu plan each week that incorporates leftovers and at least one no-meat meal. Create a list and stick to it. Research shows 2/3 of grocery store purchases are impulse buys.
#3. Unplug unused electronics
Even when they aren’t used, electronics that are plugged in still use electricity and drive up your energy costs. This is called “vampire power.” Unplug devices you aren’t using. Consider using power strips to make this easier.
#4. Maintain big ticket items
Many of your large and unexpected expenses are caused by a lack of maintenance. This applies to your car, appliances, HVAC system, plumbing, and more. You can reduce unexpected repairs and extend the life of these items with regular maintenance. Try to budget time and money to clean air filters, change the oil, and have your HVAC system serviced.
#5. Cancel unused subscriptions
There really is a subscription service for everything today. While convenient, these subscriptions can become an unnecessary and forgotten expense. Review your list of subscriptions and boxes and cancel any that you haven’t used in three months.
#6. Ditch banking and credit card fees
There are plenty of bank accounts and credit cards out there without monthly and annual fees. Don’t settle for service that comes with a slew of penalties, charges, and fees. Review your bank account and switch banks if you’re being charged a monthly fee. You can also get a credit card with no annual fee to reduce expenses and give you a source of money in an emergency.
#7. Review your car insurance
The average person spends more than $1,000 per year to ensure a sedan, but car insurance premiums can be much higher. If you haven’t compared rates for car insurance in the last year, it’s time to do it now. There are many ways to lower your car insurance costs:
- Increase your deductible, as long as you can afford it.
- Eliminate collision coverage that pays for repairs on an old vehicle with a low value.
- Bundle policies for a multi-policy discount.
- Ask about discounts. All insurance companies offer discounts, but they aren’t all advertised. You may qualify for a premium discount for low mileage, being a student, being accident free, installing safety devices, or being a teacher, for example.
#8. Install a programmable thermostat
Heating and cooling accounts for most of your home’s energy use. A programmable thermostat allows you to automatically adjust your temperature when you’re away to reduce your energy bill.
#9. Lower your water heater temperature
The water heater is the most power-hungry appliance in your home and accounts for 14% of your energy costs. Most people have their thermostat set higher than they ever need, burning more energy than necessary. Drop the temperature to 125-130 degrees to save money and avoid scalding hot water during your morning shower.
#10. Cut back on entertainment
If you’re like most people, a large share of your income goes toward entertainment. You can reduce your entertainment expenses in several ways:
- Reduce paid services like Amazon Prime, Hulu, and Netflix if you aren’t using them.
- Reduce or get rid of the cable package. You can watch most of your shows on services like Netflix and Hulu at a lower cost.
- Use free and cheap entertainment options like music festivals, the library, and the park.
These tips may help you save hundreds every month to build up your emergency savings fund slowly. Even so, sometimes in life you may find yourself facing a large, unexpected expense like necessary car repairs. If you find yourself facing financial difficulty, contact BMG Money to discuss emergency loan opportunities. Our new Loans For All program offers instant direct deposit loans for your convenience.