Many people struggle with utilizing their personal finances. Managing funds is especially a challenge for the millennial generation who is surviving on a shoe-string budget. However, the key to reduce your spending is to cut back a small portion in each area, as opposed to cutting back a large chunk of your overall budget. While trimming your household expenses is no easy task, with a little work, you will be able to save more and spend less.
Consolidate Expenses and Reduce Interest Fees
Many people make purchases with their credit cards, and end up paying more in terms of interest charges. In essence, Americans are spending millions each month to pay for interest charges while overpaying with their credit cards for luxury items such as flat screen TVs. The solution to this is to request for a lower interest rate from your credit card company. If you are overwhelmed with debts and bills, enroll in a debt management program. Credit counseling agents will propose a budget for you that will help you get out of debt.
Make Meals At Home
It is hard for many people to whip up a meal after working all day. Try cooking at least twice a week, and then build up to four times. You will eventually get used to eating home-cooked meals. Eating out is much costly than preparing meals at home, and you stand to make huge savings by adopting this habit.
Set a Shopping Limit
As much as it is important to set a budget before going shopping, you also need to set a shopping limit. Setting a fixed limit of the amount you are going to spend on a shopping spree will prevent you from buying things on impulse. Additionally, you can apply for shopping coupons to ensure you do not go over your spending target.
Reduce Electricity Use
Electricity is expensive, especially if you have many household electronics. The first step to cut back on electricity consumption is to switch inefficient light bulbs with energy-efficient bulbs. Look out for a vampire drain. This is power that is zapped by electronics that are not in use. Unplug these electronics to avoid this vampire drain. Air conditioners consume a lot of energy; therefore, ensure your AC’s thermostat is not at subfreezing levels.
Cut Your Cell Phone Bill
It is not all the time that you need to make expensive calls. You can easily cut down your expenses by reducing your cell phone plan. Evaluate what you are using your cell phone calls for, and find alternative ways of communicating for less money. For example, if you are using your cell phone plan to text friends, it is cheaper to use an online texting service like Facebook or WhatsApp.
Summing It Up
It is not easy to cut down on your usual household expenses at a moment’s notice. However, with practice, you can be able to adopt healthy spending habits and make huge savings.
Tom serves as the Financial Consultant for Heritage Bank. In partnership with LPL Financial Services, he assists individuals, families and business owners with all aspects of financial planning including retirement.
LPL Financial Consultant • 678-284-3302 • [email protected]