Saving money can mean the difference between being able to drive your car and putting food on the table for a lot of people. Fortunately there are several things the average person can do to cut their monthly expenses without drastically reducing their current standard of living.
1. First, find out where your money is going. You may be surprised at how you are actually spending the money you have every month. Take a small notebook with you and write down every purchase you make for at least a week. Then break down the purchases into groups, such as fast food and snack foods, gasoline, groceries, rent /mortgage, insurance etc. Then add up everything you have spent in each category and project each category’s spending into a full month.
Are you surprised? Most people never realize how much they spend on fast food and snacks every month. Buying these types of items has probably become a habit and it is easy to believe that habits are necessary, but see if you can start by cutting down on some of this type of wasteful discretionary spending. Remember, even saving an average of $25.00 a week translates to a $100 savings each and every month!
2. Cut back on your TV viewing. By this I mean do you really need the cable package you currently have? It’s nice. It’s fun. But do you really need it? And more importantly, can you really afford it? If not, try a more economical package. You’ll soon find that you hardly even miss most of the old programs. Remember what it was like watching TV before cable?
3. Do you need a standard telephone? Most of us grew up with a telephone that hung on a wall or sat on a table in the corner of the living room or the kitchen and somehow we still feel the need to keep a “home phone.” But if you have a cell phone, do you really need the extra monthly expense of a “house phone”?
4. Use energy wisely. It should come as no surprise that energy costs have skyrocketed. Now more than ever it is necessary to turn off lights every time you leave a room. Only do full loads of laundry and full loads of dishes. And by the way, were you aware that you can save money by washing your clothes in warm water with a cool water rinse? Many people use a hot water rinse, thinking that it makes their clothes cleaner. Studies have shown that a cold water rinse keeps your clothes just a clean and saves you money in the bargain!
5. Only drive when it is absolutely necessary. Gasoline prices are through the roof! The days when we could just jump into our cars without giving it any real thought are gone. Plan your trips. Try to get as many things done in one area as possible and combine as many trips as possible. Also look into taking the bus or other public transportation for as many trips as possible. Carpooling to work not only saves you on gasoline, it can also save you on car insurance as well. Tell your insurance agent if you begin carpooling.
6. Can you refinance your home? Interest rates are dropping once again and money for refinancing is available despite all of the headlines about mortgage problems. If current interest rates are at least half a point lower than your current mortgage rate and you plan to live in your home for at least another couple of years, refinancing to a lower monthly mortgage payment can save you hundreds of dollars a month in some cases.
7. Pay off high interest credit cards. Paying just a few dollars a month over the minimum payment on your high interest credit cards can make a huge difference in how quickly you can pay off your cards, saving a ton of money in interest and ultimately eliminating a monthly expense entirely. Put your credit cards in a drawer or cut them up. Buying on credit is a sure way to financial problems down the line.
8. Review all of your insurance policies. Sit down with your insurance agent and go over each and every insurance policy you have, from auto to health to home to life insurance. Most policies that you have had for a while are ripe for review. Between the two of you you are bound to find ways to save money while maintaining the coverage that you genuinely need.
9. Make meal plans. One of the major expenses for most households is food and one of the problems with the food budget is that often there is little or no advance planning. Make actual meal plans on paper. Know ahead of time what you need for each meal and plan to have leftovers more often. Not only will meal planning help you save money by buying only the food you really need, but knowing ahead of time what ingredients you need will save you from making unnecessary and expensive extra trips to the grocery store.
10. Cut down on shopping trips. If you are used to going to the mall once a week or twice a month find something else to do at least half of the time. Go ride a bike or take a walk instead. Each time you go to the mall, even if it’s just to “look around” or to “get out of the house,” is an invitation to spend money – and you know it. So fight the urge and your pocketbook will thank you!
Saving money every month may require you to painfully re-think your priorities – and to change some long-standing habits. Habits have a way of becoming “necessities” and it can sometimes be hard to convince ourselves that we don’t really need something that we’ve become accustomed to, but as times and our pocketbooks change, so must our habits if we are going to learn to save money every month.