Are you struggling with your monthly expenses? You aren’t alone. Last year, a survey by CareerBuilder found that 78% of Americans are living paycheck to paycheck.
Before you start looking for ways to increase your income, you should try to see how you can cut your monthly expenses. Contrary to the old adage “a penny saved is a penny earned”, you’ll actually stretch your budget further by saving rather than increasing your income. This is because you would need to pay taxes on additional income, while every dollar you save is like tax free earning that goes right into your pocket!
Here are some ways that you can save more money every month.
Downgrade to a cheaper vehicle
Many people love driving flashy vehicles. However, they can be more trouble than they’re worth. Even if you have paid your vehicle off, you may want to consider selling it to downgrade to a cheaper model. Here are a couple of reasons:
- There is a correlation between the cost of your vehicle and cost for repairs. This is mostly because parts for luxury and sports vehicles tend to be harder to find and more expensive.
- Insurance is also going to be higher for more expensive cars.
- More expensive cars are often less fuel efficient.
Downgrading to a cheaper vehicle will be less expensive in the long run. Of course, if the vehicle isn’t paid off, you will save the most money by reducing your monthly payments if you can sell your vehicle for more than you will pay for a cheaper one.
Become better at cooking instead of eating out
Eating out on a regular basis can be very expensive. You probably don’t realize how much until you add it all up. Tiffany, the blogger at Don’t Waste the Crumbs stated that her family reduced the money they spend eating out every month from $600 to $80.
There are a number of reasons that people eat out regularly. One of the biggest reasons is that they don’t feel they are good at cooking. They also may eat out for social reasons.
Try to improve your culinary skills. Also, it is a good idea to try having regular potlucks with your friends instead of eating out all the time.
Take a hard look at your Starbucks spending habits
Most people know what they get at Starbucks every morning. Far fewer people keep track of what they pay there. My sister used to buy a drink that cost $7 every morning. She would also purchase a small hot chocolate for my nephew, which meant she was paying $10 a day for those sugary drinks.
This obviously adds up fast. She was paying $300 a month or nearly $4000 a year just at Starbucks!
It is best not to go every single day. If you do want to indulge on a regular basis, at least try to find drinks that you can buy for around $3. This alone would save you nearly $1,500 a year compared to what you would have spent if you bought that $7 drink every day. The savings will exceed $2000 a year if you cut back a couple of days a week.
Look for new places to buy prescription medications
How much are you spending on prescription medications? If you have chronic medical condition, they can be extremely expensive.
Don’t assume that the pharmacy you are using is the most affordable. You may be able to get a better deal elsewhere. Make sure to shop around. Saving a couple hundred dollars a month is nothing to sneeze at.
Don’t put off refinancing your debts
Some debts have very high APRs. It is in your best interest to see if you can refinance for a lower rate.
The first place to look is your credit cards. Some credit cards have interest rates over 20%. If you transfer your balance to another card, you could reduce your interest by a third or more.
Refinancing your student loans may also be a good idea. Many college graduates have outstanding debt from student loans of over $30,000. Refinancing at a lower interest-rate could reduce the amount that you pay on interest by several hundred dollars a year.
Get a place with a roommate
I used to live in a community where the average apartment cost $1,700 a month. You could rent a place with a roommate for a third that price. Try seeing if you can find somebody that is looking for roommates. If you own your own home, you can also try renting a room out of your house. Either option will help you save a lot every month.