If financial stress is what has brought you here I just want to tell you that you are not alone, and it is going to be okay.
Nearly everyday I talk with families who are uncertain about their finances and are hoping to find ways to keep their heads above water.
We have been there. Many times.
There was a time in the not-so-distant past when we were living on less than half of our current income. Dave was starting a new job and had not yet worked his way up to a better paying position; I was staying at home with our son and unable to afford childcare so that I could go back to work.
I’ve kept copies of hand written monthly budgets and meal plans from those days. Occasionally I look back at them as a reality check of a time when we had $300 left after bills to buy groceries and gas for the month.
It was during those times that I became engrossed in our personal finances and maintaining a strict and stringent budget.
I am hoping some lessons we have learned over the years will be helpful to you.
1. Put a limit on food spending
If you really want an idea of your food spending, take some time to look over previous bank statements (if you use a card to shop/eat out). Chances are you’ll be surprised with the number. It is also a good place to start when setting a budget, or a spending limit.
Once you know how much you spend regularly, set a realistic limit. If you normally spend around $1000 on food in a month, a limit of $100 is unrealistic.
The best way to save on food is to grocery shop and cook at home.
Think about this: you could order a $6 sandwich and upgrade to a combo with chips and drink for $2 for an $8 lunch for one day OR you can buy a loaf of bread, a pound of lunch meat, a half pound of cheese and a gallon of iced tea for about $18 and have lunch for the whole week.
Cooking at home takes some thinking ahead – planning out what you will need for a week’s worth of breakfast, lunch and dinner – but it is the best way to cut down on your spending.
Bonus Tip: On top of cooking at home, try changing where you shop.
Your regular grocery store may be familiar, but stores like ALDI have great quality products with lower prices. They reduce costs by saving you the markup on big-name-brand products, offering a smaller selection of products and skipping fancy merchandising setups.
Grocery discount stores are another option. They frequently sell overstocked items, products with dented or damaged packaging or seasonal products that did not sell before the next season. Some that come to mind include Big Lots and Ocean State Job Lot.
2. Try to lower your utility bills
Electric and gas companies will often offer payment plans that spread your bills evenly throughout the year. This can be beneficial during seasons where you typically see and increase in your energy bills – e.g. electric bill increases in the summer from AC use.
Contact your cell phone company to see if you qualify for a low cost plan or additional discounts. You may be able to switch your services to a more affordable plan.
Cell phone companies often have special discounts for corporate companies, unions or school affiliations. If you belong to any large group organizations, check to see if they qualify for a discount.
3. Consider trimming your cable and internet services
Forgo the tv bundles for internet-only plans and use a streaming service to watch TV. But be careful, with the growing number of streaming options, the costs can quickly add up to the equivalent of a fancy cable package. Many smart TVs have free streaming options already loaded.
While you are at it, check for any subscriptions you have, streaming or otherwise, that you’re not using frequently and cancel or postpone them for now.
If you’ve already kicked cable, consider shopping around for other internet providers in your area. If you have options (not every are does) you may be able to find a better deal with a competitor.
4. Shop around for car insurance
You may be surprised to find out how much you can save by shopping for new car insurance. You can visit insurance websites to get quotes on your own or find an insurance broker who can compare rates for you.
This is also another place to check for affiliation discounts. Large companies, universities and public services often have discount agreements with large insurance companies. If you are a member of a group, check to see if they have an insurance affiliation and request a quote from that company.
5. See about lowering your credit card interest rates
If you have consumer debt, a good way to reduce your bills and stay on top of payments is to try to find a lower interest rate.
Call the customer service number on the back of your card to see if they are able to lower your rate. Prepare yourself with information on offers from competing companies and let them know you’d prefer to stay with them if they can make a similar offer.
If you have been with the company for a long time, there is a good chance they will want to help you in order to retain you as a loyal customer.
If they are unable to help you, consider looking for a 0% interest card to transfer your balance to. Keep in mind that most offers will charge a transaction fee of around 3%-5% of the amount you transfer.
Use apps to find saving opportunities
There are apps our there that will do the work of negotiating credit card rates and utility bills and cancelling unused subscriptions for you.
One such service is Rocket Money.
They will contact your utility companies, cell phone carrier and cable provider and negotiate more affordable plans. They will work with you and your bank to reduce APRs and banking fees. And they will cancel your unused subscriptions.
You simply link Rocket Money with your accounts and they will go to work analyzing your spending.
The cost is a percentage of the amount they are able to save you on your bills. If they are unable to find you any savings, you pay nothing.
I hope these tips were useful and helped you to find at least one place to start cutting expenses. I know in uncertain times there can be a lot to worry about. It is important to find ways to control what you can right now. Whether you were brought here due to financial hardship or you are just seeking ways to regain a feeling of control, reducing your expenses is a great way to start.
