How to Cut Expenses and Save Money
Who among us would not love to save more money? It is something that we all strive to achieve but often cannot accomplish. That is because the bills keep coming in every single month and our financial obligations grow every day. With these realities, it is tough to stash away some cash in a TFSA (Tax Free Savings Account) or a savings account as there usually is not any extra money available to do so. However, there are ways that most of us can save money: By cutting our expenses.
You might scoff at that suggestion and reply that there is not any extra money to be found but, for most people, a closer look at their budgets and what they spend their money on can lead to further expense cutting.
Here are some tips for ways to cut expenses so you can start saving some of your hard-earned money each month:
Tip #1: Cut Down Phone, Cable & Internet Services
One of the first places to look when you are trying to cut down your monthly costs is your telephone (home line and cell), internet, and cable bills (though cable is becoming less popular all the time as more of us switch to internet-based services). Most people do not switch these providers very often — so if it has been a while since you reviewed what you are paying for and determined what deals might be available to you, now is the time to do so. It is highly likely better deals (either from your current provider or from their competitors) are just waiting for you to take advantage of them.
It is also a clever idea to think about what you really use. Are you paying for channels, features, bandwidth, or data that you are not really using? Check to see if there is a cheaper solution available that meets your needs. For example, if you are not a sports fan you might consider cutting the sports channels out of your cable package to save some dollars.
Tip #2: Review your Subscriptions
Today, every service comes with a subscription. From Disney+ and Apple TV+ to Prime Video and Netflix, there are subscription plans galore. Each of them comes with a monthly fee, too. And those fees can really add up over time. Sit down and review your bills to determine what you are paying monthly. Many people subscribe to software or streaming services they rarely use. And for those who still subscribe to print magazine subscriptions, decide if you really need to keep receiving those publications. They can be costly.
If you are paying for a streaming video or music service (such as Pandora, Spotify, or Apple Music) that you do not really use, consider pausing the subscription or cancelling it outright. Most subscription services make it easy to cancel and restart your subscription later, so you can always come back if you deeply miss the service. For example, I signed up for a yearly subscription to Sirius XM just before the pandemic hit. Once I was no longer commuting each day, Sirius XM no longer proved useful to me. Cancelling it until the pandemic ends was the right choice. I can always reactivate it later on.
Tip #3: Bake & Eat At Home
One thing I have noticed during this pandemic: People are turning to their kitchens to keep themselves entertained and educated. The popularity of cooking shows over the past decade has paid off with millions of us baking our own bread and pastries, creating culinary masterpieces right at home and eating healthier than we did before COVID arrived. Try finding a package of flour at your local grocery store and you will understand what I am talking about.
Cooking for yourself rather than going to a restaurant or ordering takeout can also save you some money. Even if you do not have much experience cooking, it is a clever idea to look up some recipes online (or watch some of those popular cooking shows) and cook your own food most days. Not only will you save yourself some money compared to ordering from your local restaurants, you will likely also end up eating healthier!
Tip #4: Reduce Electricity Usage
Electricity usage is expensive, but there are ways to reduce your dependence on electricity and save some money. For example:
- Hang your clothes to dry instead of using the dryer. This may not be possible all the time (for example, in winter months) and in all situations but, if you can dry your clothes naturally, it will save you money.
- When you wash your clothes, use the cold-water setting. Heating the water uses enormous amounts of electricity.
- If your area factors “time of use” into your electricity costs, try to do energy-intensive activities during “off-peak” hours, when electricity is traditionally less expensive. Especially when using your dishwasher, washing machine or clothes dryer.
- Consider using LED lights instead of incandescent light bulbs. LEDs use a lot less energy and usually last for years before they need to be replaced.
- Adjust the temperature in your home so it is slightly warmer in the summer (and slightly cooler in the winter). You will barely notice the difference and you can save money on air conditioning (and heating, even if you have gas heating).
Tip #5: Walk, Bike Or Take Transit Whenever Possible
It may not be possible for all of us to do this, based on our physical abilities or location, but if you can walk, bike, or take public transit for shorter trips rather than driving you can save money. These modes of transportation are usually much less expensive, and they are often better for your health. Plus, you will avoid putting as much wear and tear on your vehicle.
Tip #6: Regularly Review Your Household Budget
What is that? No budget? Well, now is the time to make one. And if you have already created a household budget, when was the last time you reviewed it? A budget is not a static creation that we jot down once and then never look at again.
It is a smart idea to review your budget regularly (every couple of months, for example) to see if it still makes sense in the real world. If there are areas that stick out as unrealistic or in need of tweaking, adjust your budget to make it more workable. By regularly reviewing and adjusting a budget, you will find ways to reduce expenses, spend money more effectively, and stash more cash away in your savings account.
Tip #7: Track Your Spending
Tracking your spending is important. It helps you determine where your money is going. And once you do so you will start to see which expenses are unnecessary and remove them from your budget (more money for savings!). Choose a method that works for you (a handy app on your phone like Mint or KOHO can make this easier, or create a simple Excel file on your computer, jot things down in a notepad with a pen). Be sure to notate every purchase you make, even the tiny ones. These can add up over time, too.
Bonus Tip! Record your purchases right after you make them. That way you will not forget any and your budget will truly reflect your daily spending reality.
If you have found the tips we have listed are just not workable for your current situation, and feel you need to deal with your debt pressures first before you start putting aside money in your savings account, please reach out to our Farber professionals for assistance. Just CLICK ON THE FREE CONSULTATION BUTTON, below, or give us a call today. We are here to listen – and to help.