One of main barriers that prevents many people from saving money is having too many expenses. Some expenses are unavoidable, but they can often times be reduced. Listed below are 4 common expenses in which you can likely reduce your spending.
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While we all need food to survive, many people overspend on food. Here are a few ways to reduce your food expenses.
Stop Dining Out
One of the most common ways to overspend on food is dining out. When you dine out, you are paying a premium to have the food prepared and served. You may pay $20 for a meal at a restaurant that you could prepare at home for $10 or less. If you’re feeding an entire family or dining out multiple times a week this can really add up.
Be A Bargain Shopper
Bargain shopping at the grocery store is also a great way to reduce food expenses. Most grocery stores have some sort of free membership that gives you discounts on select items and often times money off gas if the grocery store has a gas station. Utilize these memberships and buy the items that are discounted. They tend to switch up the discounted items weekly, so it’s not like you’re going to be buying the same food every week.
Avoid Upscale Stores
In addition to buying items on sale, avoid shopping at high-end grocery stores like Whole Foods and Fresh Market. There is a reason you typically find Whole Foods and Fresh Market near expensive neighborhoods, they are upscale grocery chains that charge upscale prices.
Paying rent or a mortgage is pretty much an unavoidable expense unless you live with your parents or couch surf at a friends house. Although this expense is unavoidable, it doesn’t mean you can’t reduce this expense without drastically sacrificing your quality of life.
Sure, you can always cut down on your rent/mortgage by living in a crime-ridden neighborhood where home prices are depressed, but I’m guessing you don’t want to worry about getting mugged while you’re mowing your lawn, so I won’t consider this option.
Get A Roommate
One reasonable option to lower your rent/mortgage is to have a roommate who pays rent. This doesn’t mean you have to share the same bedroom. In most areas it cost more per person to rent a one bedroom apartment for yourself than it does to split the rent with a roommate on a two bedroom apartment. Although a two bedroom apartment is made to accommodate twice as many people as a one bedroom apartment, it is typically not twice the price.
From my personal experience, when I lived in a one bedroom apartment the rent was about $800/month. Prior to that I lived in a two bedroom apartment with a roommate and the rent was about $1,200/month, with my portion being $600/month. Therefore I saved $200/month by splitting a two bedroom apartment with a roommate. On top of splitting rent you are also able to split utilities when you have a roommate, which may help you to save an extra $50 or so.
Cable & Internet
Everyone, and I mean EVERYONE, I know complains about their cable/internet bill. We live in a world where you need to be able to access the internet whether it be for your job or to connect with friends and family. That being said, I am not going to go as far as to say cancel your cable and internet and try to find an apartment as close as possible to a Starbucks so you can freeload off their wifi. What I will say is…
Cancel Your Cable
Depending on your provider and plan, it may save you a lot or it may save you very little. Either way, it’s a luxury you can go without and save money as a result. If you think you can go without internet as well, more to power to you! Although I hope not everyone cancels their internet because I will have no one to read my blog.
Don’t Rent The Modem
Many cable/internet providers offer a modem you can rent. From my experience, they charge around $10-$15/month to rent it. Instead of renting, go out and buy a modem from Amazon or Best Buy. It will cost you $50-$60 initially, but this pays for itself in 4-6 months.
If you absolutely need some kind of programming consider Netflix, Hulu, or Amazon Prime. All of these offer a huge selection of on demand entertainment. The monthly cost is also much less expensive than cable in most cases.
Unless you live in an urban area with reliable public transportation or the ability to easily walk or bike to everything, you will likely need to purchase a car. Remember that a car is not an investment as cars always depreciate in value. Just like with everything else, you should shop around to get the best car for your money. When you purchase a car you want something that’s reliable, inexpensive, and practical.
Look For Reliability
To determine the reliability of a particular car, check out car reviews online or consumer reports (my personal favorite). Try to avoid cars that have low reliability and low overall ratings. If you have the budget to buy a new car in the $15,000-$20,000 range, you can often get a long term warranty.
Several inexpensive car manufacturers offer 10 year 100,000 miles powertrain and 5 year 60,000 miles bumper to bumper warranties. I highly recommend looking for brands that offer these types of warranties. Warranties like these give you a sort of guarantee that you won’t have to make any major repairs to your car for the duration of the warranty.
Buy Something Inexpensive
When I say to purchase a car that is inexpensive, that may be relative to the amount of money you make. For example, an inexpensive car for someone who makes $100,000/year will likely not be considered an inexpensive car for someone who makes $50,000/year.
Let’s say you make $35,000/year and want to purchase a car. Purchasing a car that is $20,000 or more is probably too expensive even if it’s brand new. If you want something brand new with a long warranty look for something around $15,000. At this price you will likely have to make monthly payments, but if it’s brand new and has a long warranty you won’t have to worry about paying for repairs for the duration of the warranty. Alternatively, consider something slightly used with good reliability ratings if it will save you even more money.
Unless you absolutely have to, try to avoid buying an old car that may be unreliable. Although it may cost less initially, you run the risk of having to invest major money into repairs and it could ultimately end up costing you more money in the long run than buying an inexpensive new car with a warranty.
Choose Something Practical
Lastly, you want to choose a car that is practical for your needs. What’s practical for a banker might not be practical for a farmer. When I say practical I am not referring to money, I am referring to what you will be using the car for. For example, a sports cars might be practical to get a banker to and from work, but a pick-up truck might be more practical for a farmer who may have to haul supplies around his farm.
In choosing a car that is practical determine how you will be using the car most of the time. If you are just driving to and from work choose something small and fuel efficient. If you have a family, choose something four door and fuel efficient. If you have to haul stuff regularly that won’t fit into a small car or if you live in an area that receives snow regularly choose something like a pick-up truck or SUV.
A Few Expenses Among Many
These a just a few common expenses that can easily be minimized. It ultimately comes down to being a bargain shopper for every expense in your life, as well as developing the ability to distinguish between your wants and needs. Next time you are making a purchase ask yourself, “do I need this?” If the answer is yes, look at all of the options available and make sure you are choosing the most affordable option.
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