The cost of living is becoming increasingly difficult for many people this year. Prices are rising and financial resources are dwindling. Basic necessities such as food and gas are becoming more expensive, making it harder to make ends meet. In light of the potential recession, it’s important to find ways to save money. Here are some strategies to consider.
Debt
Making monthly debt payments can significantly impact your ability to save money. Debt can consume a large portion of your income, making it difficult to reach your financial goals. One effective strategy for paying off debt is the snowball method, where you prioritize paying off your debts in order from smallest to largest. This approach not only helps you make progress on reducing your debt but also encourages positive behavior changes that can help you continue to make progress on your savings goals.
Cut Down on Groceries
Many individuals are surprised to learn how much they spend on groceries each month when they create a budget. The average American family of four spends around $966.1 per month on groceries. It can be easy to make small, impulsive purchases while shopping, such as bags of cookies or chips, which can add up and ultimately lead to overspending. These small, impulse buys can become budget busters if they are not tracked and managed properly.
One way to save money on groceries is to plan out your meals for the week and take inventory of what you already have in your pantry before going shopping. This helps to avoid purchasing items that you already have, thus reducing unnecessary expenses. Additionally, taking children with you to the store can increase the likelihood of impulse purchases, so it can be helpful to leave them at home in order to stay on track with your budget.
Subscriptions and Memberships
Many people have multiple subscriptions, such as Netflix, Hulu, Spotify, gym memberships, subscription boxes, and Amazon Prime, which can add up quickly. To save money, it’s important to take a look at which subscriptions you are not using regularly and cancel them. Additionally, it is a good practice to turn off auto-renew when making a purchase to avoid unexpected charges. If you decide later that you want the subscription again, you can always re-subscribe, but only if it fits within your budget.
Generic Is The Best
One of the simplest ways to save money is to switch to generic or store-brand products. In many cases, the only difference between name-brand and generic products is the packaging and branding. Generic products such as medicine, food staples, cleaning supplies and paper products often cost less than name-brand alternatives and work just as well. It’s worth considering switching to these products to save money.
Cable TV
It’s well-known that cable prices have been increasing dramatically in recent years. The average cable TV bill has grown by 52% over the last three years. But, there are alternatives to cable that can help save money such as using network apps and streaming services. It’s important to be mindful and only subscribe to the streaming services you will actually use, as signing up for multiple services could end up costing more than a traditional cable subscription.
Automatic Savings
An easy way to save money without much effort is to set up automatic transfers from your checking account to a savings account on a monthly basis. This can be done through your bank. Alternatively, you can also set up a portion of your direct deposit to automatically go into your savings account every time you get paid. This way, you can save money effortlessly.
Tax
Another way to save money is to adjust your withholding on your paycheck if you are consistently receiving large tax refunds every year. By doing this, you will have more money in your paycheck each month. Additionally, it is important to avoid giving more money to the government than necessary.
Energy Costs
You can save money on your electric bill by making small changes to your home such as taking shorter showers, fixing any leaks, using cold water for laundry, and installing dimmer switches and energy-efficient lightbulbs. Although buying new energy-efficient appliances can be costly, budgeting for them and paying with cash over time is an alternative way to save on your electric bill.
Insurance
You may be surprised to learn that by working with an Endorsed Local Provider (ELP) to review their insurance rates, people typically save an average of $700. It’s worth exploring this option to see if you can uncover any potential savings on your insurance premiums.
Pack A Lunch and Eat At Home
An average household spends an estimated $3,030 on food outside of their home per year, which is equivalent to $253 a month. While buying lunch a few times a week may seem like a small expense, it can add up over time. Packing your lunch instead can save a significant amount of money. Additionally, purchasing groceries for the week can often cost the same as two dinner meals out, so preparing food at home can lead to even more savings.
Retirement Plan
If your employer offers a 401(k) match and you aren’t contributing enough to take full advantage of it, you are missing a great opportunity. It is recommended to speak with your HR department to set up an account, but it is essential to wait until you are debt-free except your mortgage and have a fully funded emergency fund of 3-6 months before you start saving and investing for retirement.
Spending Freeze
Challenge yourself by not purchasing any non-essential items for a week or even a month. This can serve as a contentment challenge. Keeping track of what you are grateful for each day can help reduce impulsive buying. To make this challenge more successful, prepare meals with what you already have, avoid stores where you usually make impulse purchases and only buy essentials.
Love, Bee xxx