- Posted by NateKragness on November 9, 2009
I'm sure you've heard the old adage: a penny saved is a penny earned. This holds true because money that you don't spend can instead be invested -- which is sort of like giving yourself a raise, except you won't have to work any harder for it. Here's ten easy ways to lower your expenses:
- Ask your utility company to average your bills over the year. This gives you consistent and predictable expenses every month of the year, instead of having extra large heating (or cooling) bills for several months of the year. Statistically, having volatile bills from month to month can disrupt your budgeting, and may cost you money in fees or interest if a bill is larger than expected. Usually this service is offered for free, so inquire with your utility companies to see if you can sign up. This way, you will know exactly what your bill will be every month, and you can budget for it and forget about it.
- Scale back on non-essential bills. Do you pay extra for premium cable packages, frivolous features on your phone, expensive gym memberships, etc.? You may find some wiggle room in most of your non-essential bills -- for example, you might be able to watch your favorite shows online for a cheaper price than your cable bill, or start jogging regularly instead of paying for the gym. Be careful not to do anything too drastic here, though -- these things you pay for can contribute to your quality of life, so where applicable, try to scale back a bit instead of eliminating them completely.
- Familiarize yourself with your local library. Check out books from the library (for free!) instead of buying them, unless it’s something you're going to use on a very regular basis. If it's a book that you want to re-read a few times, keep in mind that you can always check it out again! Your local library generally has a very wide selection of books -- both leisure and professional -- as well as magazines and trade publications. You can usually even request that they purchase a book you want if they don't happen to have any copies, or they will obtain it from a nearby library too. Many libraries even carry movies you can rent for free (actual recent releases, too!). The library exists as a service for the community, so take advantage of it!
- Stop overspending on drinks. If you regularly buy coffee or bottled water, you can realize tremendous savings by investing in a coffee maker and a thermos, or in a water purifier and a reusable water bottle. Both options will give you the same result for pennies on the dollar, and by using reusable containers, you also help the environment by reducing waste.
- Always research purchases in advance. Impulse shopping notoriously hurts your wallet; spend some time to plan ahead and find the best deals. Do a quick online search to see if any coupons or mail-in rebates apply to your purchase, and always check for retailer cash-back programs too. It can also be useful to read some reviews on the product you're planning to purchase, in order to make sure that it is a quality product that won't need to be replaced soon. Sometimes, spending more money initially can end up saving a lot of money over time, and investing in a quality product is always worth considering.
- Stop overspending on your cell phone bill. The average consumer spends around $90 a month on their cell phone, but cheaper alternatives are beginning to permeate the market from multiple carriers. For example, you can get unlimited minutes, text-messaging and data for under $50 a month -- or if you don't use your phone much, you can get plans for under $10 a month, too. Even if you are currently under contract with your phone company, it might be worth breaking it and paying the early termination fee if the savings are large enough.
- Start a vegetable garden to save on groceries. For the price of buying a few tomatoes, you could instead buy tomato seeds, and give yourself a fresh supply throughout the year. Obviously this requires some planning, but the potential savings are definitely there. You also get the benefit of fresh and organic produce, instead of mass-produced crops with questionable additives. If you don't have room for a garden outdoors, try planting some herbs on a windowsill, or even cultivate some plants indoors under artificial lighting. It can be a fun hobby to maintain, while at the same time saving you money and contributing to a healthier lifestyle.
- Plan way ahead for large expenses. If you know you will need to make a large purchase, start to plan for and research it many months in advance. This will give you the opportunity to watch the market, and see whether a sale price is a good deal, or regularly offered. It also helps a lot if you don't have a specific date that you need to make the purchase. For example, if you need a new refrigerator, but the old one still works, you can become an opportunistic shopper -- you can hold out until a great deal comes along, and then buy it using a combination of cash-back credit cards, coupons and rebates, and retailer cash-back programs. However, if you wait until your old one conks out before thinking about replacing it, you will be forced to purchase one impulsively; this almost always means you will be overspending for the convenience.
- Review your insurance policies. Whether its car insurance, renter's insurance, homeowner's insurance, life insurance, disability insurance, or any number of other insurance products available, they are generally very competitive industries, with many companies looking to secure your business. Take the opportunity to shop around, and get quotes from a variety of insurers -- you will probably find one with similar coverage that can significantly reduce your expenses. You may also consider modifying your plan to save money -- increasing your deductible can oftentimes be a very prudent financial decision.
- Treat yourself to gourmet cooking at home. Instead of paying for a fancy dinner out, splurge on some quality ingredients and indulge in a great home-cooked meal. Most of your restaurant bill goes towards the ambience and not the food, so you can enjoy a high quality meal at home for significantly less than it would take to go out and eat. Plus, you can almost guarantee that it will be much healthier than a restaurant alternative, and you can make exactly the foods that you enjoy the most. If you really enjoy eating out, don't eliminate it completely from your budget, but do try to scale back a bit, and cook at home once or twice a month instead of going out. These savings can really add up over time.
Remember, while trying to scale back your expenses can be a fun and/or necessary project, spending money allows you to enjoy the luxuries of life, and your quality of life is important. Do what you can to cut back on expenses, but don't be too hard on yourself -- it's ok to indulge from time to time. Just be smart about your finances, and keep your long-term goals in mind!