During the pandemic and challenging economic conditions, many are operating on limited resources. For those of us who may find our bank accounts do not look as they normally do, now is a good time to revisit your monthly budget in order to find areas to improve. Here are four tips to help you reduce expenses and live on a tight budget.
1. Review recurring expenses
Take a good look at recurring monthly expenses. Monthly necessities typically take up a big portion of our monthly budgets, so trimming this category can lead to big savings.
Are there any monthly expenses you could reduce, possibly by switching to a new provider? For example, do any other insurance or cell phone providers offer identical products or services for a lower rate than your current provider? Consider shopping around for better rates on recurring expenses.
Another popular way of replacing providers is switching out cable tv with a less-expensive online streaming service.
Additionally, take a look at non-essential recurring expenses like music streaming services, media subscriptions and gym memberships. Are there other ways of listening to music, reading the news and getting exercise that do not require a monthly purchase?
2. Cut down on utilities
With the seasons changing, now is an easy time to save on your monthly utility bills. Open your windows and turn off your furnace and AC units. Limit your dryer usage by hanging your clothes when they are out of the washing machine. Unplug electronic devices when you are not using them.
3. Eat home-cooked meals
It is typically less expensive to eat at home than to eat take-out from restaurants. Cook from home as much as you are able and have fun with it. Now is a good time to try those recipes your friends and coworkers shared.
When you shop for groceries, particularly staple, non-perishable groceries, consider buying in bulk if possible. Buying in bulk allows you to pay less per unit and save on your groceries in the long run. Look for store-brand products too, as they typically cost less than name-brand.
4. Consider refinancing your debt
If you have high interest loans, investigate getting them refinanced at a lower rate. This could help lower your monthly payments and save you money long term by reducing how much money you pay in interest over the life of the loan. If you have debt that may not be considered “high interest,” it may still be beneficial to do some shopping around on interest rates.
Do not forget that continuing to pay down your debt is critical to maintaining your financial health, and loan payments are one category of your budget you should try not to trim. Be sure to continue making minimum payments even when you are on a tight budget.
While many may be experiencing a reduction or loss of income, it is more important than ever to take a deep look into every expense and every opportunity to cut costs. Small changes in each category of your budget can lead to significant savings and a quicker road to more financial recovery.