When it comes to improving your finances, reducing your expenses is usually the quickest step. By taking this step, you could improve your financial life in multiple ways. For example, it could free up money to put toward a dream vacation, emergency fund, business venture, investing or becoming debt-free sooner.
To get an idea of where you can cut some expenses, pull out your pen and write a list of your monthly bills. Your largest bills will likely be your mortgage or rent. While it’s more difficult to lower the cost of housing, it’s not impossible.
When it comes to other monthly bills, you can usually cancel the service, negotiate to get a lower payment amount or switch companies. Another way to reduce your monthly bills is to eliminate debt. We’ll discuss that and more ahead. Here are 10 ways you can lower your monthly bills.
Last updated: Oct. 8, 2021
Refinance Your Mortgage
If you’re a homeowner, your mortgage is likely your largest monthly expense. One way to lower this expense is to refinance your mortgage — which means taking out a new mortgage with hopefully better terms and a lower interest rate to pay off your existing mortgage.
However, when you refinance your mortgage, you’ll likely have to pay closing costs again. Because of this, it might not be a good idea to refinance your loan if you plan on moving soon. Before you choose this option, speak with a mortgage expert to see if refinancing makes sense.
Advice: How To Refinance a Mortgage
Pay Down Debt
If you have debt, another way you can lower its monthly cost is to get rid of it. Here are some popular strategies you can use to get rid of debt sooner.
Debt snowball: When you use this debt repayment method, you focus on paying off your smallest debt first while making minimum payments toward your other debts. After you eliminate that debt, you focus on paying off the second smallest balance.
Debt avalanche: With this method, you focus on paying off your debt that has the highest interest rate first while making minimum payments toward your other debts. Once you’ve repaid that debt, then you attack the debt with the next highest interest rate.
Get Started: 19 Ways To Tackle Your Budget and Manage Your Debt
Cook Your Meals at Home
Although eating out is usually more convenient than cooking your own meals, it’s often pricier. Last year, over 1,000 Americans reported saving an average of $245 by not eating out due to COVID-19 restrictions, according to a TD Ameritrade survey.
Tip: If you don’t want to cook a meal from scratch, using a meal delivery service like Blue Apron or Hello Fresh could save you some time.
Cancel Your Gym Membership
Americans spend almost $397 million on unused gym memberships, according to a 2021 Finder survey. Of those surveyed, 42.4% reported a monthly membership price of $51 or more. Although having a gym membership can help you stay fit, it’s not the only place you can work out.
Walking or jogging around the neighborhood, exercising to workout videos at home or investing in free weights could be a great way for you to save money.
Negotiate Your Bills
The cost of your monthly bills aren’t set in stone; you can negotiate with all types of service providers to get a discount. For example, if your internet bill rises after a promotional deal expires, you can call the customer service department and ask for a cheaper price.
You can also negotiate medical bills. If you want to pay a cheaper price for a medical bill, ask the billing department if you can get a discount for paying your bill in cash. Also, you can ask if there are any financial assistance programs available.
Shop Around for Auto Insurance
Since auto insurance rates vary, it’s a good idea to shop around for the best rates at least once a year. Around 76% of people who shopped around for auto insurance save money, according to a 2021 ValuePenguin Survey. This means that if you don’t take some time to compare rates from multiple insurance companies, you’re likely missing out on a savings opportunity.
Tip: When comparing rates, make sure the quotes include similar coverage amounts from each auto insurance company.
Cancel Unused Subscriptions
When was the last time you spent some time reviewing your monthly or annual subscriptions? Take some time to create a list of the services you’re subscribed to and circle the ones you don’t use. Keep the subscriptions you use and get value from but cancel all the services you rarely use.
Tip: If you want to save time finding and canceling unused subscriptions, you can use online services like Billshark for a small fee.
Eliminate Cable TV
A cable TV subscription can be pricey. The average American household spends $109 a month on it, according to data from doxoINSIGHTS. If you pay the average amount for cable TV, you would save $1,308 a year by cutting the cord. After you decide to cut the cord, you could choose a lower-cost option for watching TV.
For example, you could choose a low-cost option like SlingTV that has packages as low as $35.
Switch To a Cheaper Phone Plan
If you have a single-user unlimited cellphone plan with a major carrier, it can set you back $70 or more per month. This price is much higher than most prepaid cellphone options. For example, if you switched to a low-cost carrier like Mint Mobile, you could pay $30 a month for its unlimited plan. The downside is that you’ll have to pay your cellphone bill upfront, but you’ll save more money in the long run.
Alternatively, you could choose to switch to a less expensive plan with your current carrier if you prefer sticking with them.
Use Your Local Library
When was the last time you used your local library? Libraries often have several benefits for patrons, including access to DVDs and Blu-rays, e-books and physical books, magazines and web programming courses.
In addition, some libraries offer in-person activities and classes you can attend. If you’re looking for a way to lower your monthly entertainment and educational expenses, visiting the library could be a perfect solution.
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