Most people will tell you that they are aware of the importance of saving money, and living within their means. The sad fact is many people live well above their means, going deep into debt just to fund a lifestyle that they cannot afford. I used to be one of those people. Heck, I was in over $75,000 of debt trying to build a business and buy things that impressed my friends. I didn’t care what it cost as long as people thought it was cool. I’ve since changed my dumb way of thinking and it’s changed my life.
Now that I focus on saving money, instead of spending it, I’ve found there are many great ways to cut back on your living expenses. Don’t assume that you have a “fixed cost” that you have to pay a high price. I’ve cut back the amount I pay each month considerably (by over $400) just by asking questions, looking around, and most importantly, tracking my money!
Money Tracking Is Vital
You cannot effectively cut back on the amount of money that you are spending unless you are properly tracking where it is spent. You need to know how much you spend before you can effectively save any money. There are many awesome online tools out there to help you track your money, but the best (in our opinion) is Personal Capital, which is free and also helps you track your investments. You can check this out to see how Personal Capital compares to Mint.com. Perhaps you are not overspending at the grocery store in general, but are overspending on chips and snacks, which is money that could be better spent on healthier food. By analyzing you’re spending in-depth, you can find areas in which you are overspending, and cut them out completely.
Bundle Your Services
If you are paying for many different services for your home, such as phone, cable, and Internet separately, you can save some money by bundling them altogether with a single company. Sometimes, you will be able to save $20 or more per month through doing so. This will also consolidate these bills with a single company, making them much easier to manage and pay. Bundling also works wonders for insurance. They give specific discounts for those who have more than one service.
Don’t forget to check around to see who offers the best rates, but also tell them you’d like to bundle to see if they can provide you with a bigger discount. Obviously, don’t bundle a service you don’t plan on using unless doing so will actually save you more than what you spend now.
For example, one reader told me they reached out to Time Warner Cable to see if they could get a better deal on their internet/cable service. By adding phone, they were able to drop their bill by $25 a month from their current payment. That’s something you can certainly do and might be worth your time.
While you can turn to coupons to help you save more when shopping at the grocery store or using this browser extension to automatically save you more, the best and easiest way to save money on anything is by comparing similar services. You should always compare pricing on services, especially recurring ones on a regular basis. Did you know that I compare my car insurance prices every 6 months to make sure I’m getting the best deal?
Do you think this takes me a lot of time? NOPE…
With all the sites on the internet, you can find pricing for just about anything. If you can’t find it, you can submit for a quote. Every company is eager for your business, so let them fight for you. This typically runs to your advantage.
Most people just get complacent with their services. Heck, I was paying Verizon $150/month for years because I didn’t know any better. I never checked around. Now, I pay Republic Wireless $20 a month and couldn’t be happier. I wouldn’t step back to Verizon unless they really enticed me with something good.
Don’t get complacent as it typically hurts your money. Do yourself a favor and go out there and compare pricing!
Turn the Dial on Heating/Cooling
One of the largest portions of anyone’s energy bill is going to be the heating/cooling. Conditioning a home costs a great deal of money, and can significantly increase your living expenses. On days when it is just a little chilly and not freezing outside, you can save a great deal of money by turning off your heat, and simply wearing another layer of clothing. Although it might be uncomfortable at first, you would be surprised how quickly you can become accustomed to this style of living, allowing you to save up to $100 per month that normally would have gone into heating your home.
The same goes for your cooling costs. By turning up the thermostat by 2 degrees, you can save upwards of 10%. You might not really be uncomfortable doing so, but turn on a fan and let the air circulate. Here is a great article about dealing with summer cooling costs.
If you’ve never invested in a programmable thermostat, you should do so quickly. They can easily pay for themselves in a season or two depending on how much you change your settings. It’s great for both summer and winter.
Entertain Yourself Cheaply
How much of your budget do you actually spend on entertainment? Many people spend hundreds of dollars every month entertaining themselves, without ever looking for cheap ways to do so. Examine your entertainment expenses in depth, and look at ways in which you can cut down on your entertainment spending. If one form of entertainment, such as going to the movies, cost less than another form of entertainment, you could plan to start going to the movies more often.
Here are some great articles on how to keep busy on the cheap.
- 10 Cheap and Fun Summer Activities for Families
- 5 Ways to Entertain When the Budget is Tight
- 4 Frugal and Fun Things To Do (Besides Watching TV)
Just Stay In
When you are worried about the amount that you are spending, the best way for you to save money is just to stay home. Instead of going out to the bar with friends, stay in and watch a movie. By staying in, you do not give yourself the option to spend additional money, and having the willpower to do so will allow you to save a great deal of money over time. Sometimes your financial situation needs a little more stringent action. If you can’t afford to pay your bills, you shouldn’t be out on the town with friends.
Go rent a movie at the library, check out Netflix (if you have a subscription), or do something productive to expand your earning potential. I started a blog and it’s changed my life. Now I blog full-time and run a business helping other bloggers. Who knew that by substituting my “going out” time with productive actions, I could increase my income by 100% and work for myself? Think about that for a minute…
Do You Know How Much You Pay?
Do you know how many subscription services you have each month and how much money you are paying? Well, if you don’t, then it’s time to take a look at Trim. It’s a service to help you cancel unwanted subscription services with ease. The best part is it’s free!