Six Ways to Lower Your Expenses
1. Eating Out Less
Eating out is expensive! Especially with the highest level of inflation in 40 years, but just in general, eating out can eat into your budget quite much. For example, if you eat out three times a week and it costs you around $50 per trip (that number might be low if you have a family), that’s $150 of expenses per week and around $600 per month, which equates to around $7,000 a year!
Now, there is nothing wrong with eating out once in a while. You can certainly include that in your budget, but this is a pretty easy way to save some big bucks over the course of the year.
If you plan to eat out, you can also look for discount deals. There are many restaurant that offers online coupons, Groupon deals, or discount through their apps on your phone. Some fast food restaurant such as Panda Express, Popeyes, and IHOP even offers deals and discount if you complete surveys on their receipts.
Some restaurants offer birthday rewards if you sign up for their rewards program and receive their promotions. The point is, look around for ways to save money if you do decide to eat out. You will be surprised at how much you can save or how much more farther your dollars can go.
2. Cut Down on Your Cable Bills
Some cable companies can charge $100-200 a month for their TV packages. If you have a monthly subscription with them, check to see if you can find a cheaper package that still has all the channels that you need. It’s also a good idea to shop around a little bit to see if rival cable companies have good deals for new customers or promotions.
I know of a friend who just switch back and forth between different cable companies, because usually after a year or two, the discounts goes away and the cable company makes you pay the full price. So by switching to a different cable TV provider, he continues to get the discount. Usually you are able to save between 30-40% or more with the discounts.
If you are spending between $1500-2000 on cable TV, you can probably do better and slice down that cost drastically.
3. Lower Your Phone Bills
Most people now a days don’t have landlines anymore unless it’s required for security. Although a few people still find it useful to have one. So most of the phone bill cost is for mobile phones. Cell phones have become an indispensable part of our lives now a days. But you don’t have to pay a ton to get what you need.
Most of the big time companies will charge between $40-50 for a single line, this can add up quickly. If you have a family, you definitely want to ask them about their family plans. If you are okay with using an alternative service, such as Hello Mobile, Visible, or Mint Mobile (there are a ton of them out there, so you want to do your research on their service capabilities), you can save quite a bit on this.
My wife and I use Hello Mobile as both of our cell phone provider and it only cost us $40 a month. She’s the heavier user, so she signed up for the unlimited everything service and it’s only $25 a month! So instead of paying $80-100 a month for the big companies, we probably save over 50% in the cell phone expenses and still get very quality services. We really haven’t seen significant service level drop from using Hello Mobile, we’ve been quite happy with it.
4. Get Rid of Credit Card Debts ASAP (Important one here!)
No, we are not talking about the rolling credit card charges that you pay off every month. Most credit card companies charge between 18-36% APR interests when you have unpaid balances from month to month. So DO NOT just pay the minimum because this is how your income gets eaten up very quickly, by paying interests to credit card companies. This is effectively high interest loans you are signing up for.
One billionaire once remarked that, one guarantee way of making 18-30% return on your money? Pay off your credit card debts. You never know what kind of return you will get on your real estate, stock market, or even bond investments, but you sure the heck will know for sure what kind of return you will get when you pay off your credit card debts because it’s always a set number.
Credit card debt is one of the worst, if not the worst form, of debt you can have. It is considered a bad debt since it only makes you poorer by eating into your assets and can never really generate wealth. I will cover the topic of growing your wealth in another article.
Here is an example of how crippling credit card debt can be. Let’s say you have a $5000 balance and you only pay the minimum of $50 a month for the next 12 months and the APR interest in this case is 25%, your balance would be $5000 (your balance) x 1.25 (your APR) – ($50 x 12 (your minimum payment for the next 12 months)) = $5650 (this is a rough estimate), but do you notice something? Your $5000 got bigger even though you paid $600 this year towards it. None of your payment went to pay for the principal (the $5000), they all went to pay the interest!
If you continue this pattern for a few years, the debit will never get paid off. And worse yet, the balance continues to get bigger and it will feel overwhelming if you let it sit. Get rid of this type of debt ASAP if you want to have any type of wealth growing potential.
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5. Eliminate Bank Fees
Are your banks charging you monthly banking fees for using their checking or savings account? If so,
find out why the account charge monthly fees and if you can instead sign up for accounts that does not charge monthly banking fees.
Most bank accounts that require fees are more premiere accounts and have conditions that can eliminate the fees. For example, my better banking account with my bank requires that I have $2500 in my checking account or have $5000 in combined checking, savings, and investments, or they would charge me $35 for having this account. So I always made sure I have more than $5000 in combined balance at any one point in time.
Also make sure you’re not paying other type of fees like overdraft fees, insufficient fund fees, ATM fees etc. These can add up to tens if not hundreds of dollars in a hurry. They are not a necessary part of using the banking system, so pay attention to how much money you have in the bank and how you are using them to avoid the fees.
6. Stop Paying for Mobile Apps You Don’t or Rarely Use
Did you sign up for a subscription on an app? Is that an essential app or service that you need and can’t live without? If it’s not, consider canceling it to save some money. One app may not seem like a huge cost, but if you have signed up for multiple subscription and have forgotten about it and don’t use the service that much, it makes sense to cancel the service and stop paying for something you don’t really need.
In Conclusion
This list is by no means comprehensive of how to cut out expenses. There are more ways to lower expenses that I will discuss in future articles. But the point is this, people that becomes wealthy or at least financially stable usually have very good spending habit and finance skills.
For example, I constantly think about how we can eliminate unnecessary expenses in household. If we want to sign up or buy something that requires some level of financial commitment, my wife and I will discuss and make sure it’s good use of our resources. So I hope some of the ideas discussed here can help shape you think more in that mindset.
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1. Eating Out Less Eating…