6 Expenses You Can Cut To Save Money
If you’re in debt, the simple reality is that you have to cut back or you’ll live forever under the thumb of your creditors. Working your way toward financial freedom is a painful process; however, the journey is rewarding.
You’d be surprised by what you can live without to achieve a debt-free life – and sooner than you thought was possible. Here are 6 expenses you can cut to start redistributing a larger proportion of income toward paying off your debt:
Housing: Is it time to downsize?
For many, the idea of home is nostalgic. When you think of your house, you might recall pleasant family gatherings and growing pains or you may feel a strong sense of security. When it comes to the home, people consider it a constant. But what is your home really costing you, in money and experiences?
The general rule of thumb is to spend one-third or less of your income on housing, including mortgage, property taxes, and utilities. If you’re well above this threshold and your buried under debt, perhaps it’s time to consider downsizing.
Of course, if you just can’t bring yourself to part, there may be alternatives to consider, such as getting roommates or renting out extra space as an Airbnb.
Groceries: Don’t worry, you can still eat healthy on a shoestring budget.
The average US consumer spends over $7,000 on food each year – more than $4,000 on groceries and about $3,100 on dining out. You can cut your food budget almost in half just by eating exclusively home cooked meals.
But what about the grocery budget alone? If you’re like the average American, you might be spending more than $330 per month. However, following the USDA’s thrifty food plan would help individuals save upwards of $290 and a family of 4 more than $180 per month.
Shopping: Ask yourself one question…
Do you really need that? Do you really need the brand name clothing, a new TV, this year’s iPhone? 100 percent of the time, the answer is no.
And if you find your impulses tend to get the best of you, just don’t put yourself in situations where you can’t help but spend. Block those frequently-visited shopping websites and avoid your favorite stores, even if you’re just window shopping.
Entertainment: cutting the cord.
The average US consumer spends more than $100 per month for cable – and more than five hours each day in front of the tube. When you terminate your cable services, you’ll not only save a Benjamin, but have more time for other activities. And, of course if you’d like to keep informed, the local news is only a bunny’s ear length away.
Transportation: Are cars a luxury or a necessity?
Whether you need a car or not depends on your circumstances: Do you have a long commute? Is public transportation reliable and easily accessible? Do car payments fit into your monthly budget? And so on.
Owning a car is expensive, costing over $700 per month or just over $8,500 per year on average. This price tag may shift your perspective on necessities and make the alternative more appealing – or, at the very least, tolerable. Consider car-pooling, ride-sharing (i.e. Lyft or Uber), public transportation, or even riding your bike or walking if distance permits.
The Great Debate: Is the Internet a necessity?
Because we rely on the internet to search for jobs, pay our bills, access healthcare, educate ourselves, participate in civic life, connect with loved ones, and so much more, the internet is not a luxury but a necessity.
But do you think you could live without for a while? The average US internet bill is about $50. The cost of a library card? Free. We’re not trying to tell you to stop surfing the web and start reading more. We’re just saying that most public libraries offer access to free Wi-Fi. If the internet isn’t an integral part of your job or education, this might be a viable alternative.
These are just 6 ways to cut costs to help you start paying off your debt. But if your debt is primarily made up of unsecured debt such as credit cards, you might be able to cut your costs even further by allowing our team of debt settlement experts to negotiate with creditors on your behalf.
Since 1999, New Era Debt Solutions has helped clients settle over $200 million in debt. If you’d like to see if debt settlement is right for you, please contact us or fill out our form on this page for you free debt analysis.