Want to cut your expenses? You're not alone. Most people want to spend less money—but then when it comes down to it, they can't seem to bring themselves to do it.
That's because we've been conditioned from a young age to expect certain things: a certain level of comfort, a certain standard of living. When you start trying to change the way you live your life, it can feel like an uphill battle and one that you might not be able to win.
But here's the thing: you can win this battle. You just need the right tools, and some help from someone who's been there before and knows what works. And today I'm going to share with you seven tips for cutting your expenses dramatically while still keeping your quality of life intact!
Refinance your mortgage
Calculate your savings with a refinance calculator. This will give you an idea of how much money you could save by refinancing your mortgage, which is one of the most powerful financial tools available to homeowners.
See if your bank can match a lower rate. Banks often advertise low rates, but it's not always obvious exactly what those rates are based on or how long they last. Your bank may offer better rates than what's advertised on their web page—you just need to ask!
Refinance for longer terms and lower rates (or vice versa). If you have enough equity in your home and qualify for a loan without putting any cash down, consider refinancing with another lender who can give you either lower monthly payments or extend the term length while still charging the same interest rate as before (or less).
Move somewhere less expensive
If you find that your current location is more expensive than it needs to be, consider moving somewhere less expensive. This can save you a lot of money in the long run.
Cost of living: Look up the cost of living in other cities and decide where it makes sense for your family to live based on how far away from work they would need to travel, what kind of lifestyle they’re currently living (big house with a yard versus apartment), etc.
Cost of housing: For example, if you want an apartment with two bedrooms and two bathrooms so that each child has their own room and bathroom, but that type of housing is too expensive where you currently live then consider moving somewhere else that has this type of housing available for less money per month (that way everyone gets their own space). Or if paying $600 / month on rent seems reasonable but not $800 / month then perhaps there are cheaper options out there somewhere else (like getting a smaller place).
Sell your home and rent for a bit
Renting can be a smart choice for you if you’re not ready to buy a home or have no desire to do so. Renting can save you money, especially in the long run.
You won’t be paying down debt on an expensive mortgage.
You can save up for a down payment and avoid paying private mortgage insurance (PMI).
You can pay off your credit card debt faster and stay away from late fees by living rent-free while saving up some cash to help with your monthly bills and expenses.
Renting also gives you time to build up your retirement savings without having to worry about home maintenance costs, property taxes, or unexpected repairs that could break the bank.
Rent out space in your home on a short-term rental site
If you have a spare bedroom in your home, consider renting out space on a short-term rental site like Airbnb or HomeAway. You can also rent out space in your home for as little as $10/night on VRBO, where people pay for the entire property—for example, if you're leaving town for vacation and want to rent out your house while you're away. If a guest cancels at the last minute, no worries—you'll still get paid!
These sites provide insurance coverage in case something goes wrong (like if there's an accident). They also provide rating systems so that potential guests can see what others thought of previous renters' experiences with them before they agree to stay at your place.
Cancel unused subscriptions
Cancel unused subscriptions.
Think of all the subscriptions you've signed up for over the years, and how many of those are still active. It's a lot, right? You might want to consider canceling some of them.
What is the value that you get out of each subscription? Do you use it often? How much are paying per month for it and what would be your cost if you bought a physical copy instead? Is this worth it to spend an hour every week on this service or product?
Cancel your gym membership and work out at home
If you can’t get rid of your gym membership, it may be worth considering canceling it. If you have access to a treadmill, a stationary bike, or a weight bench at home (or even just in your apartment building), you can work out plenty of ways without paying for an expensive monthly plan. Fitbits are also great because they encourage you to keep moving throughout the day and focus on getting in extra steps when necessary.
If none of these options work for you, consider taking up yoga or pilates classes at a local studio instead of spending money on an expensive gym membership that might not actually motivate you to exercise as much as possible.
Refinance Mortgage
Refinancing your mortgage can help you save money by lowering your monthly payments and interest rate. This is especially helpful if you have a fixed-rate mortgage.
A fixed-rate mortgage means that the interest rate will be the same throughout the length of the loan. This can be good or bad, depending on where rates are at when you enter into the loan agreement. If rates are low, then it's probably best to stick with a fixed-rate mortgage. But if rates are high, then refinancing into a new loan with a lower rate could save you thousands of dollars over time.
The process of refinancing is fairly simple: You apply for a new loan, which usually has lower interest rates and better terms than your existing one. Then once it's approved by the lender, they'll pay off your old loan (and any penalties for breaking it early) and give you the funds for the new one. The only thing left is for them to send out paperwork showing how much money was paid off so that you can keep track of it in case anything goes wrong later on down the road!
Make your lunch and coffee at home
Pack a lunch. Of course, this is the most obvious one. A couple of days a week, when you're not running around doing errands or meeting up with friends or coworkers, pack yourself a sandwich and head out the door with your lunch bag like you normally would. When you get hungry for lunchtime (it won't be long), eat your sandwich and drink water from the bottle in your bag. You'll save a ton of money on eating out and can even apply those savings toward buying groceries or other essentials instead!
Make coffee at home. If you like coffee as much as I do, chances are good that making it at home will be cheaper than buying it from cafes or convenience stores—and even if it isn't cheaper, who cares? Having coffee made by hand is so much more enjoyable anyway!
Takeaway
So, there you have it. The most important things to keep in mind when cutting your budget are to:
- Stay motivated by keeping track of where your money is going and how much you're saving.
- Make sure to prioritize the things that matter most to you—your family, your health, your hobbies—and cut out the rest.
- Cut out anyone or anything that isn't helping you achieve your goals (this is probably a good time to unfriend all those people on social media who just make you feel bad about yourself).
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