When budgeting, the hardest costs to reduce are your necessary costs, especially the recurring fixed costs. Here are some ways you can reduce your monthly and annual expenses.
1. Lower your Utility Bills
This step is easier than you think. There are many ways to lower your utility bills without changing your habits or lifestyle.
- Consider buying LED lighting. Look for the lowest Watt bulbs you can find.
- Switch to a low-flow shower head. You can save hundreds of gallons of water each month just by switching out your shower head.
- Invest in a programmable learning thermostat. My Nest thermostat goes into eco mode when we leave the house and adjusts the temperature when we are headed home, all automagically. The Nest Thermostat is available here on Amazon.
- Adjust the default brightness settings of your TV and computers and set a timer on your TV so that it turns off when it senses inactivity for a long time.
- Lower your water heater temperature by 10 to 20 degrees so that you would never notice.
- Shut off your outdoor water supply when not in use. You can lose lots of precious water when your water hose or bib is leaking.
2. Switch to an Affordable Phone Plan
Cell phone providers like Verizon, T-Mobile, and AT&T have taken over most of the U.S. It becomes very easy to forget that there are several cell phone companies that offer more affordable prices for the same services. I recently signed up for Mint Mobile for just $15 per month. Sign up using my referral link https://financethrottle.com/go/mintmobile and receive a $15 credit towards your bill and 3 months free. MintMobile uses T-Mobile’s 4G LTE and 5G network so you know the signals are strong. Mint Mobile’s unlimited 4G LTE and 5G plan is just $30 per month. An equivalent plan would cost 3 to 4 times that amount with Verizon or AT&T.
3. Cut the Cord / Consolidate Streaming Services
If you are paying for cable or satellite TV, don’t. Switch to a streaming service like Hulu, Netflix, Sling TV, Apple TV, Disney Plus, or Amazon Prime. Speaking of streaming services, try to stick with just one if possible. If you are subscribed to 3 or 4 of these services, you might as well go back to paying for cable. You can also share your subscriptions. My cousin lends me his Netflix account. My sister lends me her Disney Plus. I lend them my Amazon Prime and my sister-in-law gives us access to Hulu.
4. Cancel your Gym Membership
Sure some gyms are only $10 per month, but most gyms are at least $30 per month or $360 per year. Did you know you can buy a treadmill on Amazon for $350? A more expensive $80/month gym equates to $1000 each year. You can buy an elliptical and some weights with that cash. Even better, exercise for free outside or watch Zumba videos on Youtube and follow along.
5. Share
Share a car if possible. Share clothes for once a year events, borrow your wedding dress, and share toys between friends so you don’t need to buy more. Our friend let us borrow their trampoline and bicycle for our daughter since their son outgrew them. That saved us a few hundred dollars. A neighbor lent us their hitch platform so we can store more stuff on the back of our Subaru when we went camping. Share entertainment such as the streaming services I mentioned in #3.
6. Eat out Less and Consider another Grocery Store
You will find that more than half of your food budget will go to restaurants if you eat out as little as three times a week. Grabbing a coffee and sandwich on your way to work counts as eating out. My wife and I struggled with this as we liked to eat out all day on weekends. Food is the toughest necessary expense to reduce. Always start out with ordering one item at a time. Don’t order a full meal unless you are still hungry after that appetizer. I find that appetizers fill me up before the main course arrives, especially at chain restaurants like The Olive Garden. Leftovers could be forgotten and go bad before you get the chance to finish them up.
As for groceries, we shop between Wegman’s, Aldi’s, and Wal-Mart. We know that milk and eggs are cheapest at Wegman’s, fruits and veggies are cheapest at Aldi’s, and bread and cheese are cheapest at Wal-Mart. I pretty much crossed Giant, Weis, Safeway, Trader Joes, ShopRite, Target, and Acme off my list of places to buy groceries. They are too expensive in my experience. Once you find the most affordable places to buy the food you like, consider becoming a member for free to receive discounts and Coupons.
7. Buy in Bulk
Places like Costco, Sam’s Club, and BJ’s can save you money on car repairs, fuel, insurance, hotels, and other items. I shop at these warehouses for bulk items like toilet paper, toothpaste, medication, paper towels, trash bags, dog food, and bottled water as they are much cheaper than regular supermarkets. However I avoid buying food from these places as the unit cost per item is usually the same if not more expensive than what you can find in a supermarket. Going back to item #5, you can share your membership with family members and split the $40-80 annual fee.
8. Shop Around for Insurance
You don’t need to wait until your 6-month or 12-month insurance plan expires. You can save hundreds of dollars by spending no more than 15 minutes shopping around. It is easier to find cheaper car, home, and health insurance plans if you just take the time to look. I change insurance companies every 6 months, lowering my monthly expenses by $10-30 each time.
9. Consolidate your Loans
If you have student loans or a mortgage, refinancing or using a home equity line of credit to pay off your student loans is a great way to lower your monthly payments by hundreds of dollars.
By doing these 9 things, you can reduce your fixed expenses by as much as 50%, allowing you to save more than ever. Comment below to share how you lowered your fixed expenses. Want a budgeting spreadsheet to help you out? Click here.
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