1. Keep Track of Your Expenses
I know you've probably heard this before. But here's the twist: it's now possible to do this with your computer, for free! And it's actually fun. There are both websites to manage your finances online and free software which you can download for Windows, Mac, or Linux. Alternatively you can use a spreadsheet, although the previous two options are better for most people.
Online Management:
Software Download:
2. Eliminate or Replace Daily Luxuries
Many people have regular habits of purchasing small 'luxury' items. At the time you don't feel like you're spending enough to matter. But that $10 coffee 3 times a week is $120 a month! If you have trouble eliminating these luxuries, try replacing them with something much cheaper. Bring a thermos, for example. Here are some other regular luxury items you can eliminate or replace:
- Smoking & Drinking: Chew gum, drink water, or find something to do.
- Theater & Movie Rentals: Use the library! Rent from Redbox. Visit a drive-in or older movies theater.
- Music CD's: Download online and burn to CD or mp3 player.
- Fast Food & Vending Machines: Yuck! Bring a simple meal.
3. Lower Your Driving Costs
As fuel becomes ever harder to acquire and refine, prices will continuously increase. This makes driving your car to work for money a losing proposition. Many people pay upwards of $600 monthly just to own one vehicle! Gas alone often exceeds $200/mo. Fortunately, there are many things you can do starting today to reduce this expense.
- Car Pool - Call a co-worker who lives nearby and ask for a ride.
- Public Transport - Or take a bus, train, or taxi.
- Buy a Bike - Bicycle or motorcycle, cheaper and more fun.
- Compare Gas Prices - click here for a list of websites.
- Optimize Your Car - Close windows, wash it, check tire pressure, air filter, and service engine light.
4. Lower Your Food Costs
Food is often the last thing we consider when we set a goal to reduce our expenses. We need to eat, so what's to reduce? The fact is, what food you purchase should be considered very carefully. Not only can you save tremendous amounts of money by eating at restaurants less often, but you can also save money by enjoying a healthier diet. Cut junk food entirely by planning meals ahead from the many thousands of unique recipes you can find freely online. Planning will also help you prepare meals that are filling yet not excessive or wasteful, especially if you count calories.
5. Reduce Shopping Expenditures
Along with lower food costs goes shopping for less. There are huge gains you can make by tweaking your trips to the store. Chief among these is again by planning ahead. Build a list over time of all the items you require. Then when you go shopping you'll spend less time searching and less money on impulse purchases. This really works, as modern stores are designed to make you spend more if you're unprepared. Also, see which stores are in your local area with a phone book or online and compare prices. You might be surprised as prices vary dramatically even between stores that are very close. Bulk stores, discount stores, and cooperative food markets usually offer the best prices. Other tips to save money when shopping include purchasing store brands (which are often made side-by-side with name brands), looking for discounts, not window shopping, and simply asking for a lower price! While no longer considered status quo, it was once very normal to communicate regarding the price of an item you were purchasing, and there is nothing inherently 'wrong' about it.
6. Reduce Household Service Costs
Believe it or not, household utilities such as water and energy can be reduced rather easily. You can now choose from several companies for each of your utilities, depending upon where you live. Use their websites or call directly to compare prices between them, it's possible to save as much as 15% on your energy bills. And form good habits around saving energy: Shut off lights & appliances, don't leave water running, turn the climate control down. Many utility companies will even provide a free home energy audit simply by calling them. See more ways to save on utility costs.. As the line blurs between phone and television service, many extra features are added to 'expand' your entertainment options. However, these can add up to literally hundreds of dollars a month. Consider reviewing your packages for features which are unnecessary - you can call and have them canceled in minutes. This is especially helpful with cellular service. Also, it is now possible to consolidate services to just one company with substantial discounts. The reliability of cell phone service has improved to the point that many people no longer keep separate land lines.
7. Cut Subscriptions
Speaking of service costs, it seems almost anything can be had with a 'subscription' these days. Cars leases, portable Internet access, music and movie rentals, and millions of other items. Really think about it: do you require these items for daily living? The answer is almost inevitably no. But of course we're facing the age old challenge of willpower. What to do? Cut back gradually. Fill the void created in your day with more healthy activities.
8. Buy Used
So many items today are purchased and replaced only a short while later. This almost always occurs before the product's useful life cycle ends. Cars are a prime example. Modern vehicles easily last more than 10 years with maintenance. And there are hundreds of others. Computers, televisions, appliances, furniture, bikes, almost anything considered expensive for a middle class income. Search ebay, Craigslist, Autotrader, or Freecycle. Go to resale shops. Check local classifieds. Even garage sales have very nice bargains. And while you'll undoubtedly experience peer pressure to have the newest items available, you can often acquire a nicer used item for the same price or much less. Think of all the extra money, or time, you'll have to spend as you want.
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