One of the key steps to taking control of your finances is to figure out how to minimize your monthly expenses. Minimizing your monthly expenses allows you to reallocate money to meet your personal finance goals.
Take a look at a these seven quick tips to help you save money and cut expenses:
1. Know Where Your Money is Going and Where to Cut Back
Before you can get an accurate idea of where to reduce your spending, you need to know where your money is going. Review your bank and credit card statements from previous months to determine your spending habits. Figure out how much money your spending on necessities like housing, transportation, utilities, food, and insurance. Next add up all the repeat charges you see for the month to determine how much you’re actually spending.
Looking at your statements can help you calculate how much your spending on small things that may be adding up to big bucks each month. Look at how often and how much you spend in a week or a month. You should have an average of how much you spend on non-essentials like your daily coffee, lottery tickets, taking an uber instead of walking, or eating out for lunch.
Once you know where your money is going, figure out which expenses you can minimize or eliminate. If you’re spending $20 a week buying coffee everyday – that amounts to $80 per month. If you buy lunch four times a week for $9/day, you could be spending $36 week on lunch – that’s $144 per month or $1,728 per year! Buying your own coffee and bringing your lunch from home could easily save you over $200 in one month.
2. Evaluate Your Housing Situation
If you’re renting, look around to see if other apartment complexes are offering specials before you renew your lease. If you have been paying your rent on time and like where you live, ask your landlord if you can have reduced monthly rent in exchange for a longer rental lease.
If you own your home and have extra space consider getting a roommate for a short time period to help reduce expenses. Also take a look at the interest rate on your mortgage to determine if it makes sense to refinance.
3. Change How You Commute to Work
Riding a bike or walking to work is an ideal way to save money and get exercise. Unfortunately, for most of us that’s simply not possible or safe. Rethink how you commute to work each day. While it may take longer and be less convenient, it could save you money. Consider carpooling to work, using online tools like GasBuddy to find the cheapest gas prices near you, or take public transportation to avoid paying for parking fees. Can you leave earlier to avoid traffic or change your route to work to avoid tolls? Run the numbers to determine what makes sense for your situation.
4. Cut Unnecessary Expenses
There are tons of little expenses for things you don’t need each month that can add up. Take a look around you and figure out what you can eliminate. Are you still paying for the gym membership that you never use? Do you pay for cable only to watch HGTV – or a limited number of channels? Consider cutting the cable and opting for Netflix or Hulu. Cancel the home phone that you never use. Cancel the magazine subscriptions that you never have time to read. Check your cell phone bill to see if you need to adjust your minutes, text or data plan.
5. Save on Utilities
- Turn your thermostat down in the winter and up during the summer and close the vents in unused spaces like your guest room.
- Unplug appliances that you aren’t using – connect electronics using a surge protector to turn off multiple electronics at once.
- Even if you hate washing dishes as much as I do, try hand washing once or twice a week to save on water and give the dishwasher a rest.
- Evaluate how you do your laundry. Make sure you’re washing full loads of clothes or consider making your own laundry detergent.
- Switch out your old light bulbs with the energy efficient ones that can save you money on your electric bill. Learn more ways to save on your home energy bills.
6. Call to Lower Rates
If you’ve been paying your bills on time and have decent credit, call your credit card company to see if they can lower your current interest rate. You may want to transfer small balances to cards with zero interest. Be sure to read the fine print – some cards add a balance transfer fee or have a limited time period. Call your cable and internet provider to see if they can offer you a better deal on your services.
7. Cook and Eat at Home
If you find you’re spending too much money eating out, cut back to once every week or two. Save even more money by cooking at home or hosting a potluck with friends. When you do decide to go out, avoid overpriced and unhealthy sodas and order water to drink. Use coupons to save on your groceries. There are tons of websites – MyGroceryDeals, BasketSavings, KrazyCouponLady – that can help you save money on groceries and Facebook groups to help you with couponing.
Whether you’re looking to add to your savings, pay down debt, or have extra income each month – making a few small changes to your lifestyle can help you save big money.