Wondering how to drastically cut household expenses? Here are 11 easy and effective ways to cut your costs in half!
Two-thirds of American consumers want to start saving more money. The only problem? It’s easier said than done.
If you want to know how to save cash, it’s not about making more money — though that certainly helps. The reliable method is to make the most of every dollar. With a few simple changes, you can say goodbye to high-interest debt and start saving for retirement.
Ready to stretch your dollar without affecting your quality of life? Discover how to drastically cut household expenses with these 11 tips.
1. Start Budgeting
The best way to start saving money is to start tracking it. Do you know how much you really spend every month on essentials and nonessentials? Tracking your expenses through a budget can give you a firm foundation for setting goals.
Before you try any of our following tips, be sure to set up a budgeting and tracking system now. That way you’ll be able to measure the success of your new financial tips.
2. Get a Cheaper Car
Most budgeting guidelines suggest you spend about 15% to 20% of your monthly income on transportation costs. That’s about a fifth of your taxed salary. By trading down to a used car, you stand to save thousands of dollars every year.
Not only are used vehicles cheaper to purchase, but insuring them costs less, too. Check out some used cars if you want to save on multiple fronts.
3. Refinance Your Home
Your home is one of the most expensive possessions you’ll ever own. By lowering your mortgage payments, you’ll slash hundreds from your annual home expenses.
Even if you have a good deal through your current lender, there could be a better one right around the corner. Take a look at other lending institutions, especially if your credit score has improved since you first bought the home. Over a 30-year payback period, the savings from a trivial rate change can add up.
4. Consolidate Credit Card Debt
The average credit card APR sits around 15% to 25%. If you’re loaded with credit card debt, it likely costs you hundreds of dollars every month. But there are some simple ways to get things under control.
The secret? Sign up for a 0% APR introductory card and transfer your current loans to the new balance. This will help you pay down the loan without accruing interest.
5. Audit Your Subscriptions
Whether it’s Hulu, Amazon, or something else, many Americans subscribe to monthly services. It’s easy to underestimate the actual expense. After all, it’s only $15 a month.
But when you make use of a dozen of these subscriptions, the financial burden is significant. Every month, get a handle on your services. Unsubscribe from anything you’re not using at the time.
You can always sign back up for the service if you later change your mind.
6. Create Homecooked Meals
A single meal from a fast-food restaurant will run you about $10. With moderate budgeting, that same $10 could cover groceries for two or three days. The fact of the matter is it’s cheaper to eat at home, albeit it’s a bit more work.
Try to limit your fast food intake to once or twice a week. Rather than wasting time in line or at the drive-thru, spend it over the stovetop in the comfort of your own home.
7. Rent Out Your Living Space
If you don’t mind the company, renting out your home or apartment can lead to some massive savings. Let’s say you pay $1,000 a month for your apartment. With a single roommate, you’d save $500 every month by cutting the costs down the middle.
Not bad, right? And as a homeowner, you have a bit more control over the rental situation. Maybe you just need to rent out the furnished basement. If you’re not using it anyway, that’s more money in your pocket.
8. Switch Mobile Carriers
You stand to save more by using a plan from smaller mobile companies. The thing is, many of these companies use the same cell phone towers. You’re basically paying more for no reason.
But if you don’t want to switch carriers, that’s okay. Consider downsizing your plan to something with less data.
9. Lower the Thermostat
Keeping your home at a comfortable temperature is a struggle in either the summer or winter. While it’s convenient to leave your heater or AC running all year long, it’s far from economical.
Lower the thermostat. Bundle up in the winter months to save big, especially if your heater is powered by electricity. During winter, set a box fan in an open window and create a draft to push the heat outdoors.
10. Use a Cheaper Health Insurance Plan
You likely spend hundreds of dollars on health insurance premiums every month. If you’re young and without serious medical conditions, you may be able to get by with a less potent health insurance plan. This means higher deductibles and less coverage, but it’ll take a chunk out of your monthly premium.
11. Enjoy Free Entertainment
Thanks to the internet, it’s easy to have a great time without spending a dime. Turn to Youtube and social media for guilt-free entertainment.
But if you’re looking for something a bit more memorable, check out the local museums, fairs, and festivals. Many of these are completely free to the public.
How to Drastically Cut Household Expenses
If you’re currently struggling to stay afloat, take a deep breath. There are always ways to stretch your current budget without affecting your current lifestyle.
Now that you know how to drastically cut household expenses, the hardest part is getting started. So what are you waiting for?
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