For me, January is a time to clean house, literally and figuratively. One way I’ve been trying to clean house this year is to have a comprehensive family budget. After we moved, I’ve been staying home with the kiddo, so we have a new house (and all the stuff that comes with it) to keep up on just one salary. We need to be diligent about making any cuts to the monthly budget to ensure all the numbers work.
Many budget posts focus on coffees and lunches (and rightly so, if these are a downfall for you). But in this overhaul, I’m focusing on my monthly expenses (the recurring, regular kind) for a few specific reasons. First, every dollar you save each month turns into 12 dollars at the end of a year! And once I fix some recurring monthly charges, I can “set it and forget it,” saving all that money without feeling the pinch of deprivation that every foregone latte can bring.
So to set yourself up to save money all year, here are
8 10 ways to reduce your monthly budget:
1. Insurance. The first of the year is a great time to review all your insurance coverages. If you have multiple providers, you can often combine your coverages with one provider for a “multiple line” discount that saves you up to 20% on each line of insurance. On your auto insurance, check to make sure that the annual mileage you report is accurate: if you’ve recently reduced your commute or retired, you can save a small amount by changing your coverage to reflect that. If your car is getting older, consider removing collision insurance or raising your deductible. Even if you want to keep your coverages the same for home, auto, and liability insurance, it never hurts to call and ask if you are eligible for any additional discounts.
2. Internet and television. Call your cable provider (or DSL, etc) regarding current deals for your internet and television services. Consider bundling, if your provider has a good deal, but only if you use and need all of the options offered in the bundle. And watch out for “promotional” deals that expire after 3, 6, or 12 months if you will be legally or emotionally locked into those services when rates rise. Call your competition too. Even if you don’t intend to switch providers, letting your current provider know that you are considering switching to get a better price can often lead them to offer you a better deal than you’re currently getting.
3. While you’re at it, ditch cable. With Netflix, Hulu, network websites, Redbox, and iTunes proliferating, you may find that you can watch enough of what you want to justify losing the rest (or recovering some time for reading, crafting, or socializing with family). Here are 35 ways to watch TV for free.
4. Cell phone. Review your bill, and drop any services you aren’t regularly using (such as a large text messaging plan, or a plan that provides more data than you need). Ask your provider if you qualify for a newer plan that offers all the services you do need and use for a better price, but pay attention to any contracts you may have to enter to get a better rate. Consider converting to a family plan and enrolling one or more family members or trusted friends; you may each be able to save $10-30/mo off of your individual rate plans. Also, I haven’t checked much into service providers like MetroPCS, who offer unlimited phone, internet, and texting for $50 month with no contract, but if their coverage in your area is good and you don’t travel frequently, you may be able to save significantly by getting service from a smaller provider (let us know in the comments if you have experience with this!).
5. Land line. It may be time to consider cutting the cord. This may not be feasible for everyone, and will be difficult if you don’t have good cell service at your home. If you have DSL service for internet and are required to have a home phone line, consider switching to cable internet if available. Also, make sure that you have enough minutes in your cell plan to cover calls. I got in trouble one month when I had to use half of my cell minutes trying to sort out a problem with the IRS (luckily, rollover minutes saved me)! If you can’t get rid of your phone line entirely, you may be able to drop a second line used for a fax machine, and purchase a low-cost all-in-one printer that will scan and email documents instead.
6. Bank fees. Are you paying a monthly or annual fee on your bank account? Call them to ask if they have any free accounts that will meet your needs; many banks offer free accounts if you utilize direct deposit, keep a minimum balance, or do most of your banking via ATM/online.
7. Energy audit. Getting an energy audit requires spending money to save money, but if your home and appliances are older, it could easily be worth the money to help you determine where you’re spending more than needed on utilities. Your utility company may be able to help you find a low-cost provider or offer a discount. If your home is newer, or you can’t afford an audit, at least go through a checklist of ways to save electricity or conserve water. Consider fixing or replacing items/appliances that will pay themselves off in 3-5 years. For example, according to Energy Star, a single CFL lightbulb can last 10 times longer than an incandescent bulb and save over $30 in electricity charges over its lifetime–and many energy companies work with local retailers to offer steep rebates and discounts for CFLs (I recently paid $0.99 for a pack of four bulbs at Costco, making them even cheaper than incandescents).
8. Gym membership. If you use it, great! It can be a wonderful way to work out for less than the cost of purchasing individual classes. But if you are spending money monthly on gym memberships or “unlimited” memberships at yoga/workout studios and you’re not going often, consider ditching the membership and trying some of these other ways to work out on a budget.
9. Storage unit. Reader Tracy shared that she’s reviewing her storage needs and reducing the size of her storage unit. This is a great way to save money monthy, and also to make some extra cash by selling furniture, clothes, or household items in a garage sale, Craigslist, or eBay.
10. Miscellaneous. Last, but definitely not least, the catchall category that will be different for each of you. Review your credit card statements to find budget items that are regular and recurring. A few years ago, we were members of a wine club that we could no longer justify paying $50 a month for once a baby came along. Maybe it’s a CSA for your vegetables, or a subscription to a paper that goes unread. The point is not to cut yourself off from everything just to save money–it’s to find those recurring costs and simply review whether you value–or even use–what you’re getting enough to justify spending that money 12 times over the course of a year. If not, it’s a good time to make a change!
What are your tips for reducing recurring monthly spending?