There are very few of us who don’t feel the pinch at the end of the month. Even those who save a significant amount of their salary – and are strict about not dipping into it – would like to find ways to keep more money in their pocket. Expenses can easily creep up, even after a raise, and before you know it you feel like you’re living paycheck to paycheck.
So how can you break the cycle and lower monthly bills?
The best way is to take a hard look at your monthly expenses and put in the time to make some changes. With the holidays fast approaching, we’d all like to find some extra cash. Read on for 8 must-know tips for lowering monthly bills and finding some extra cash for the holidays!
1. Get a Smaller Vehicle
Yes, we’re going to talk about something you won’t like first, but unless you need that truck for work or absolutely love it more than you love your money (AKA an enthusiast), then it may not be worth paying for. According to AAA Texas, the average annual cost of car ownership is now $9,282 a year - $773.50 a month, and that’s about the same right across the country.
This cost largely comes from financing the vehicle, but don’t forget that larger vehicles often mean a worse fuel economy, higher car insurance, and higher associated taxes/registration costs.
If you’re paying a lot for a vehicle you don’t need, it may be worth “downgrading,” even if a down-size means an upgrade in terms of age. Even if you don’t shave money off your monthly car payment, you’ll save hundreds of dollars a year elsewhere. Of course, buying outright can be the right option for some!
2. Check You’re Not Overpaying for Utilities
Electricity, water and gas all contribute to our monthly utility bills, and most of us don’t think twice about the costs. However, the average electricity bill for a single American family is around $2,060 every year, almost 30% of that amount spent on heating and/or cooling.
If you’re in a deregulated area, shop around for a better deal. If you usually pay estimated bills, send in your reading. This can significantly lower monthly bills. Check if you are eligible for an Energy Assistance Program, too.
3. Consider Improving the Energy Efficiency of Your Home
Doing things like insulating your windows, installing a programmable thermostat, and investing in thick curtains to retain heat can reduce energy waste. In many cases, there are government grants, tax credits, and rebates available to help with these costs.
When you install a water meter, your energy company will only charge you for the water you use, saving you some extra money each year.
It also pays to be a little more energy efficient. Changing to energy-saving light bulbs, turning off lights when you leave a room, and unplugging cables when not in use all contribute to a lower energy bill. If you’re interested in saving money on your energy costs, Inspire Energy has a ton of tips here.
4. Plan What You Buy, Don’t Make Purchases on a Whim
How often do you head to the store and come out spending $20, $30, or even $50 more than you planned? We all do it, and it’s one of the biggest slip-ups for even money-savvy people.
If that’s you, it’s time to write a shopping list (this may mean meal planning) and stick to it. If you struggle in this area, consider taking only cash so you can’t overspend.
This definitely goes for buying holiday gifts, too. Wandering aimlessly around stores will often lead to spending more.
5. Got Savings? Make Sure They’re Working for You
The average interest on a savings account is less than 0.1%. That means if you have $5,000 in your savings account, it’s going to make you less than $5 a year. If you look at annual savings rates for major banks, you can get 0.6%, but even that’s only $30. The banks are getting a pretty good deal.
Saving money is essential, but you don’t need to keep all your money in an instant-access account. If you are, it’s time to rethink. Generally, it’s best to keep about one month’s expenses to hand and put the rest to work. Many high-yield savings and investment options offer better deals and only require about a week’s notice to withdraw, so do your research.
6. Save on Your Gym Membership
Has the pandemic got you used to working out outside or at home in your garage? If you don’t use equipment you can’t have at home, you may not need your gym membership. Consider investing in equipment to use at home, look into pay-as-you-go gym options, or move to a cheaper gym.
7. Go Through Your Expenses Thoroughly
Most of us have a dozen apps, streaming services and online services that cost us $5-15 each, and so we buy as a no-brainer. 12 of these at $10 each is $120 a month. Are you really using all of those? Most of these products and services are those you can pick up and cancel as-and-when, so consider canceling them until you are actually using them. Free budgeting apps that categorize your expenses can help make this task easier.
8. Consolidate Your Student Loans and Other Debt
It may not be possible to pay off your debt, but you likely can save money if you consolidate your student loans. If you went to university, you know the expenses that come along with it. Your student loans may be locked in at a high-interest rate, in which case you’ll want to figure out if it makes sense to consolidate some of them.
Most federal loans have fixed rates nowadays, but it could save you a lot of money on your monthly payments if you find a good loan consolidation option. The same goes for other debts, such as credit cards debt and loans.
Save Money in the Holidays: Shop Around for Deals & Get Cash Back
You’ve heard all the tips about selling surplus stuff on eBay or Facebook Marketplace before (if not, bonus tip), and the holidays are rolling around fast. Instead of selling, look to save. Shop around for deals on your gifts and use apps like Honey to check for discount codes and earn points for cashback. You can also use sites like Slickdeals to grab great deals that aren’t necessarily widely advertised.
You can easily have lower monthly bills with a little effort and extra thought. Plan ahead for family events by cooking meals in bulk, reconsider the monthly entertainment or fitness payments you take for granted, keep an eye on your utility bills and shop sensibly for a healthier number in your savings account this holiday season!