Today we have a guest post from fellow blogger, Jon from Money Smart Guides.
Many of us know that the best way to get out of debt and put your financial house in order is by setting a budget. The idea behind the budget is to understand how much money you bring in every month and how much goes out, and the goal is to set it up so you don’t spend more than what you have.
In the process of doing that, though, you find that it might take you a month or two to line it all up where you have the right amount of money in each category. And now you see that every single dollar is accounted for. But is that all?
If you take a step back, you might be able to find some areas in which you could scale back your expenses and save yourself some money, stretching your budget in new and creative ways.
Well, maybe not so creative as just being able to think outside of your comfort zone. To get out of debt quickly or to save for a big-ticket item, you have to find areas in your budget where you can save some money, and with an open mind, you can find it possible to save hundreds of dollars a month, even when you think you don’t have any more money to squeeze. Let’s look at some of the more popular categories and discuss areas where savings can be had.
26 Ways To Ensure A Sound Budget
Getting to and from work or getting the kids to or from school can be expensive. With gas, maintenance, registration, not to mention any car payments, you could shell out $8,000 to $9,000 a year on average operating your car. But your car is necessary, so what can you do to save money in this area?
- Carpool a couple days a week.
- Use public transportation, keeping your car at home.
- Keep your tires inflated properly. That alone could add 1 percent of fuel efficiency.
- Get regular oil changes and tune-ups. Dirty fluids, spark plugs or filters will cost you gas.
- Consolidate trips. It’s easier and more efficient to run five errands in one trip, doing a loop around town, than to run three or four trips. If considering going out, make a list of all the errands you can run before you head out, and map your course.
Food is a vital part of life, so in no way would I suggest that you starve yourself or fast for a couple days every week. But, food is an area that can take up a lot of our budget if we allow it, simply because we can easily want foods we don’t need but we can justify them as helpful to our living. Here are some quick tips to save in this area without missing out.
- Get to know and love store brands. Eschewing brand names, especially with ingredients that are part of dishes (like beans for a soup or chili or a Mexican dish). Ingredients that are store-brand are much cheaper and are negligibly different in taste.
- Plan meals. Make a list of meals for the week, and buy only what you need to finish those meals. And make meals out of what you already have on hand in your fridge or pantry.
- Shop specials only. Look in your favorite supermarket’s weekly ad or check out the app and find items on sale. If you can plan meals around those specials, do so. Do not buy cereals or sodas at anywhere near full price.
- Don’t go out. Restaurants are expensive, even fast-food places. Even leftovers don’t work in keeping costs down. Avoid going out as much as possible, even at work. Pack a lunch instead. And when cooking at home, make plenty of leftovers for lunches or dinners the following day.
It can be tempting to head out every season and find the latest fashion trends and make sure you are wearing what is hot. But clothing, for all practical purposes, is about being modestly covered and comfortable. To save money in this area, here are some ideas.
- Avoid department stores.
- Find clearance racks.
- Shop only for what you need. If you work, buy only enough clothes to mix and match for five days a week. This can be five blouses and two or three skirts or two or three pairs of slacks or pants. No more, no less.
- Buy only to replace something that is worn out. If you wear out one blouse, buy only one blouse. From the clearance rack. At a non-department store.
Utilities? Really? How can you ave money on utilities without lacking some level of comfort? If you think it’s impossible, then skip this part. But there are some things you can do to keep your utility bills down and save some money.
- Stop phantom energy. Unplug appliances that you don’t use every day. If you use your clothes washer and dryer mostly on weekends, unplug them during the week. Every appliance that is plugged in but unused leaks electricity through the outlet, which added up can cost you a few bucks every month.
- Don’t stack up. Don’t run your air conditioning and dishwasher at the same time while you take a hot shower. Electricity is most efficient when it is focused on one thing at a time, so run appliances one at a time and have your heater/AC unit off during that time. This means running laundry or dish machines in the mornings during the summer and afternoons during the winter.
- Energy-saving bulbs. CFL or LED bulbs are on the market, providing 100 watts of light using less than half the electricity. Having these all over your house will save you energy in the long run. As long as you don’t leave them on all the time!
- Turn it up (or down). The heat and air conditioning are not about being warm or cold, they’re about neutral comfort. Each degree you turn your cooling up or heat down can save you as much as 3 percent on your bill. And you could easily adjust your temperature up two or three degrees without losing much comfort, and your body will adapt to the new setting.
- Use a broom. It might be easy to clean sidewalks and driveways with a garden hose, but it’s better for your water bill to use a broom.
- Calibrate irrigation. If you have a drip system for your plants, program it for the right frequency and time so that you don’t have to add water later. And check your system for leaks often so you don’t waste water and starve plants.
- Stream TV. Cut the cable and subscribe to services like Netflix, Amazon Prime or Hulu to get your entertainment. Even all three subscriptions would be cheaper each month than even a basic cable TV package.
- Borrow. If you enjoy reading or listening to audiobooks, you can get them from your local library.
- Can you hear me now? Find savings in your cell-phone plan. Get a slightly larger data plan than you would normally use, to avoid any overage charges. Find discounts for being military or an educator – ask your carrier. Buy a new cellphone with cash. Do not “finance” it by rolling it into your phone bill. And don’t upgrade your phone every year or two because you can. As long as you like it and it still works, keep it as long as you can – just like a paid-for car.
Entertainment, Vacation and Miscellaneous Expenses
This is perhaps the easiest part of your budget in which to save money, so I decided to save this for last. Sometimes it’s harder to pinch the “necessities” in a budget. But outside of that, there are very simple steps that can save a ton of money without really sacrificing your life much.
- Make theaters seem strange. Don’t go to a blockbuster movie in the theater. It’s better to be patient and wait until the movie comes out on DVD/Blu-ray. Or you can see it on your favorite streaming service (see above), or perhaps rent it from the library.
- Vacation close to home. Or even stay home and just hang out during your breaks from school and/or work. Or take day trips. Don’t save each month for a big vacation trip. Stay close to home to save money.
- Ditch the mags. You can probably cut out magazine subscriptions, and instead find articles online that fit your interests. If you have several months or weeks of magazines in your house that you have barely touched, you are wasting money with subscriptions.
- Gifts. Whether it’s Christmas or birthday, you don’t have to buy all your gifts, and you certainly don’t have to spend at least a certain amount based on how much you love the person. Keep your gifts simple, don’t give multiple gifts to a person, and add a handwritten card for extra personal touches. Hand-made gifts are appreciated just as much (if not more) than those purchased.
Using these tips as a guide, you can probably find a couple hundred dollars in savings every month, no matter how tight your budget is, just by being creative in locating opportunities for savings. And you can use those savings to knock out your debt, or save for something big later. Claim your freedom sooner rather than later, and be willing to sacrifice for it!
Jon writes for Money Smart Guides, a personal finance blog that helps people get out of debt and start investing for their future.