Easily Cut Costs
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One great way to cut your costs and loosen up your budget is to watch what you are spending on the little things - coffee, CDs, or eating out. If that isn't enough for you, though, it also makes sense to look at the big expenditures in your budget. Since the big expenditures likely eat up the largest part of your budget, it makes sense to closely look at them if you are trying to tighten your belt.
The first major expenditure is obviously housing. This can be either a place you rent or one you own. We'll look at both. If you rent, you night be able to cut your costs every month. Will your landlord lower your rent if you sign a lease for 6 months or a year instead of paying month-to-month? Will she give you a break in rent in exchange for mowing the lawn of painting your walls? Talk to your landlord and be creative. If you own your own home, the biggest savings can come from your mortgage. Is your interest rate the lowest that it can be? Could you have a lower rate by renegotiating with your current lender? Is there another lender who will give you better terms? Shop around and be assertive - you're the boss.
The second biggest expenditure is likely your car. Again, it is possible to save a lot of money here. Look at your car - does it meet your needs? Is it bigger than you need? Do you need one that is so new? If you are making payments, can you renegotiate for a better deal? Can you get lower payments by trading the car in and taking advantage of current deals? Is your car too inefficient? With fuel costing as much as it does now, a car that isn't fuel efficient can cost you hundreds of dollars a month.
Health insurance is a huge expense for American families. Again, it pays to shop around. Do you have the best program to meet the needs of your family? Are you over-covered? Would another type of product, like Flexible Spending Accounts, suit you better? The average family spends $4,900 per year on health insurance, so there is probably room to cut back.
Finally, look at the rest of your insurance. We have insurance for our cars, our homes, natural disasters, our property, our lives and many other things. Often, though, people have bought all these insurance products from different companies. By consolidating your insurance with one company (or two if one doesn't offer all the products you need), you can take advantage of the discounts and incentives which they offer and can save money every month.
By looking at your big expenses every month and shopping around creatively, you will be surprised how much you will save.
Posted by jonathan on October 26, 2005 at 08:01 PM