2020 has been a tough year for so many people, which is why it’s important to reduce your monthly expenditure wherever you can. If you’ve experienced a reduction in working hours or your income has been cut, for example, you may need to lower your monthly expenses too. Fortunately, cutting your costs doesn’t have to be as difficult as you think. With these handy tips, you can lower your monthly budget and ensure you have enough to make ends meet:
Cancel Unused Subscriptions
Take a look at your monthly bank statement and you’ll probably see a number of charges that you don’t immediately recognize. Often, this is because you’re paying for subscriptions you no longer use or even remember and that can’t be good for your finances! By canceling unused subscriptions and memberships, you can save a surprising amount each month. Whether it’s a gym pass or an entertainment passcode; if you don’t use it, why pay for it?
Remember – some subscriptions have minimum terms so do check that you won’t incur any cancellation fees by ending your membership early.
Switch Energy Suppliers
Your utility bills are an essential expense, but you might be paying more than you need to. Firstly, look at the type of energy you’re using and determine whether a cheaper alternative is available. Click here to take a look at the difference between propane vs electric, for example. Secondly, compare providers to see who can offer the best deal.
Top Tip: Some utility firms offer reduced rates to people on a low income. If you fall within this category, talk to potential utility providers before you sign up and find out what they can offer.
Take a Payment Holiday
Due to the unprecedented situation caused by COVID-19, many banks and lenders are allowing customers to take payment holidays. This means you can skip a payment for a month or two without incurring any penalties. However, it’s vital to make this arrangement with the creditor, rather than simply missing a payment.
Furthermore, you’ll want to ensure that you won’t be charged an excessive amount of interest. While you will need resume payments, taking a payment holiday can give a temporary break and allow you to use your funds for other essentials, like food or transport.
Sell Your Valuables
If you own items that are worth a significant amount, but you don’t use them often or they don’t have any particular sentimental value, you might be willing to part with them. Vehicles or jewelry can be worth thousands of dollars, so this can be an effective way to boost your funds. In addition to this, some items, like a car, require on-going maintenance, so selling them now could reduce your monthly expenditure too.
Learn to Cook
If you’re reliant on takeout or pre-packaged meals, chances are you’re spending more than you need to on your grocery shopping. By learning how to cook from scratch, you can substantially cut your costs and improve your health too. If you aren’t socializing much due to the current restrictions, learning to cook can be a great new hobby to enjoy at home too.
With plenty of cookery shows on TV and endless step-by-step recipes online, you can get all the guidance you need without spending a dime. Whether you’re a budding home chef or you’ve never cooked before, you’ll be surprised at how easy it is to create great-tasting dishes at home.
If you need a vehicle to get around, you may need to continue paying for monthly car costs, like insurance and gas. However, this doesn’t mean you need to use your vehicle all the time. By carpooling with colleagues, for example, you can minimize wear and tear on your vehicle, save on maintenance costs, and help the environment too.
Similarly, if you usually drop your kids at school using your car, why not see if other parents are happy to share the task? By teaming up with parents you know and trust, your kids can carpool to school and you could save a significant amount on vehicle maintenance and gas.
If you have multiple debts, you might be able to save money each month by consolidating them. This effectively means taking out one consolidation loan and paying off all your outstanding debts. If the interest rate on the consolidation loan is lower than the combined interest rate you’re already paying, then your monthly expenditure should go down.
Consolidating your loans is just one way of managing your debts. Before you make any major decisions regarding your finances, you may want to access independent financial advice. If so, there are plenty of debt charities and organizations that can help you to reduce your monthly expenditure and get your finances back on track.
Downsize Your Home
Selling your property and moving to a smaller home may seem like a drastic measure but it can free up equity and reduce your monthly expenditure. While you’ll need to assess house prices and determine whether now is the right time to move, it could be a viable option if you’re eager to drastically reduce your outgoings. Heating, lighting, and maintaining a home is costly, so moving to a smaller property could be just what you need to reduce your on-going expenses. Alternatively, you may want to consider taking in a lodger or renting out a room in order to boost your income.
Living on a Reduced Budget
Providing you can cover your essential expenses, living on a reduced budget doesn’t need to be stressful or boring. In fact, many people make budgeting a fun, family activity. By finding ways to reduce your costs, you can minimize your outgoings and your stress levels.
While cutting your monthly costs can be a great way to get back on track, there’s no need to despair if cost-cutting doesn’t solve all your problems. With plenty of help available from debt charities, community groups, and local councils, you can access the practical, financial, and emotional support you need.