It's smart to always be on the look out for ways to lower your expenses. In fact, smart spending is a sign of being financially responsible. In tough economic times, reducing expenditures and creating new income streams can keep your family’s head above water. But while most people focus on less entertainment and shopping, reducing your monthly recurring expenses also saves money.
If you’re ready to give your finances an overhaul and reduce how much you spend on everyday expenses, here are four tips for success.
1. Compare auto insurance rates. Maybe you’re satisfied with your current auto insurance provider. However, if you’ve never compared other insurance rates, you may be paying a high premium. Cheap auto insurance is available if you have a clean driving record. But to take advantage of the savings, you have to check out other insurance providers and request a free quote. Quotes are available in a matter of minutes, and if you’re able to save, you can reduce your auto insurance premium by 15% annually. Think what you could do with the savings. This can create extra income for other household expenses, or provide an opportunity to increase your personal savings.
2. Lower your energy costs. Utilities are another big monthly expense, but there are ways to lower your cost and free up cash. To begin, compare electricity rates with various providers in your local area. Another approach: think of ways to conserve energy around the house. This takes discipline, but simple moves can reduce energy consumption and lower your cost. For example, you can use LED lights which emit less heat and use less energy. A programmable thermostat also reduces how much energy the family uses, and if you seal cracks or breaks around windows and doors, your air conditioning or heating system doesn’t work as hard.
3. Downside. Few people willingly move into smaller homes or purchase smaller vehicles. But if unable to pay your bills each month, or if you don’t have money for savings, reducing your expenses by downsizing can solve this dilemma. Selling your current home and moving into a smaller house can reduce your mortgage payment. And if your vehicle is paid off, avoiding an auto loan payment for the next few years provides an opportunity to build your personal savings. Remember: the more you spend, the less you have available for savings. Don’t keep up with the neighbors, do what’s best for your family.
4. Reevaluate spending habits. Entertainment and recreation provide family fun, but if you’re spending too much in these areas, this can impact family finances. Think of better uses for your money. For example, seek out free entertainment in your local area. Prepare the majority of your meals at home. Rent movies instead of going to the theater, and look for discount coupons. If savings is a priority, it is easier to identify poor spending patterns.
Keeping a firm grasp on your family’s finances puts you a step closer to financial independence. Personal finance lessons aren’t apart of the typical school curriculum and most people learn smart money skills on their own or from their parents. Be mindful of how you spend your money and make financial decisions that have long-term benefits.
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