No matter what their income may be, almost everyone could use a little more money each month for spending, saving, or traveling. If you have stable employment and a good budgeting system in place, you may be wondering what else you can do to increase your discretionary fund each month. Here are a few expenses you can reduce or cut out for good.
Credit Card Fees
Potential Savings: $50 and up
With the wide range of credit cards available nowadays, there’s really no reason to pay an annual fee. To have the fee waived, just call your card company and ask. If the customer service rep won’t help you, ask to speak to a supervisor. Persistence will usually pay off, but if they won’t budge on the fee, transfer your balance to a different card and close the account.
Cable or Satellite
Potential Savings: $50-150 per month
Cable and satellite bills can easily top $100 per month, but you may not be ready to cut out television just yet. Don’t worry—you don’t have to give up your favorite shows. There are tons of alternatives when it comes to entertainment. Most new shows come on regular network television. You can watch these live with an HD antenna. You can also invest in TiVo or Roku if you like to record shows. Of course, most programs are also available online; just use your internet service to stream them for free. To catch up on old shows, just purchase a Netflix or Hulu subscription. Some of these options charge a fee, but it’ll be much cheaper than your cable bill.
Potential Savings: $5 and up per meal
Almost everyone indulges in the occasional burger and fries, but if you’re grabbing lunch out every day and dinner several nights a week, you’re practically throwing money away. Try to limit takeout and fast food to one meal per week. To fight the urge to dine out when you don’t feel like cooking, stock up on groceries and make a meal plan each week. Both your budget and your waistline will thank you for the home-cooked food.
Potential Savings: Up to hundreds each year
Most financial advisors will tell you to purchase many different types of insurance, but sometimes it’s possible to have too much of a good thing. Everyone’s situation will vary, but you should check over your policies to see if anything seems unnecessary. For example, if you have health insurance, you might not need the additional medical coverage your auto insurance provides in case of an accident. If you always keep $1,000 in your savings account, it’s probably safe to increase your deductible to that amount and save a bit of cash on your policy each month. If you have any questions, ask your insurance agent to go over each item on your policy so you understand what you’re paying for exactly.
Potential Savings: $25 and up per gift
Nothing makes the heart happier than giving something special to a friend or family member, but sometimes a gift budget can get out of hand. If you have a large family or tons of weddings to attend, try scaling back on your presents. You can either cut back on gifts altogether or just reduce the amount you spend on each person. Chances are that no one will even notice that your gifting habits have changed, but your budget will definitely notice the difference.
Potential Savings: $5-50 for each missed payment
Late fees are one of the most annoying types of expenses you incur each month. If you’re habitually late on your payments, you might not even realize how much you’re spending on these fees each year. To get your finances on track, set up reminders on your phone or write down due dates in your planner. If your bills offer an automatic payment method, sign up for it (but make sure you check your bank statement regularly for errors). It’s easy to forget a due date, but each time you miss a bill or credit card payment, you may be charged $35 or more.
Potential Savings: Possibly hundreds or even thousands
You’re charged on interest on everything from credit cards to car loans to your mortgage. Try to cut back on this expense wherever you can. If you carry a balance on your credit card, pay it off. If your mortgage rate is higher than the current average, refinance the loan. Sometimes you can even call your loan servicer and ask for an interest reduction. It never hurts to try.
Bank Service Fees
Potential Savings: $10 and up per month
Don’t let your bank rip you off. If you’re still paying a monthly fee just to have a checking account or debit card, it’s time to open a different account elsewhere. Find a new bank—or even better, a credit union—that doesn’t charge these ridiculous fees each month. And whatever you do, never overdraft your account. You can avoid this by opting out of the overdraft service that your bank provides. That way, if you don’t have the funds, your card is simply declined, and you won’t pay a fee.
Potential Savings: $4-5 per cup
That vanilla latte you buy each morning may give you energy, but it’s also draining your budget. Instead of hitting Starbucks every day, try going once a week or less. In the meantime, you can make regular coffee at home and flavor it with specialty creamers. If you want to get really fancy, invest in an espresso machine. They’re a bit expensive, but this option is still cheaper than spending $5 every time you need a caffeine fix.
Memberships and Subscriptions
Potential Savings: $25-100 per membership
Think of all the subscriptions and memberships you currently own: magazines, gym, entertainment (XM radio, etc.), warehouse clubs, and more. If you’re not using these services regularly and getting the full value from them, cut them out. Instead of listening to satellite radio, try regular over-the-air stations. If your gym membership is too much, try walking or jogging around your neighborhood instead. These services may not cost much on their own, but they can really add up over time.
To find more ways to cut back each month, analyze all your bills and keep track of your spending for a while. You may be surprised at where your money goes. The sooner you get rid of unnecessary expenses, the sooner you can start saving for the things you truly want in life.