Quarterly Newsletter

Four EasyWays to Cut Monthly Expenses

Ever notice how your monthly expenses always seem to equal whatever salary you’re making, even after you get raises? The phenomenon is called “lifestyle creep,” and it can keep you from reaching all kinds of financial goals, from paying down debt to saving for retirement.

Here are a few things you can do right now to cut your monthly expenses.

1. Make a Budget: The first step toward cutting expenses is to make a budget, so you know exactly where your money is going. Start with major categories, like rent or mortgage, utilities, transportation, meals, clothing, and entertainment. Then break it down even further to ferret out items that are ripe for reducing.
2. Lower Your Mortgage Payment: If you haven’t examined that loan since you bought your home years ago, it’s quite possible that you could save a lot of money – both now and over the life the loan – if you refinance at a lower interest rate. To know whether refinancing makes sense, you’ll need to add what you’ll spend on closing costs into the calculation of your new monthly payment.
3. Get an Insurance Checkup: If you have a decent emergency fund on hand in case of an accident, one way to lower your premiums is to increase your deductible. Also, be sure to examine your policy for “extras” you may not need. For example, you could be paying for roadside assistance both through your insurance policy and through AAA.
4. Examine Your Automatic Payments: Putting your regular bills on autopay can be a smart way to protect your credit rating by ensuring you’re never late with a payment. However, if autopay causes you to keep paying for items or services you don’t really need or use, it’s no bargain. A few common culprits include unused gym memberships, subscriptions to magazines that aren’t read, and cable or satellite TV plans.

Visit firstus.balancepro.org for more financial resources.