7 Easy Ways to Reduce Your Monthly Expenses

light bulb and coins

While the economy has shown strong improvement the last few years, many of us are still feeling the pinch of the recession. Even if you’re well off, there’s nothing wrong with putting a few extra dollars in your pocket. Here are a few easy ways to do just that by cutting your expenses.

Refinance

Interest rates are at historic lows making now the best time to refinance your home. This may allow you to reduce your monthly payments or pay off your home more quickly. Hurry, because the Fed plans to gradually increase interest rates as the economy continues to recover.

Many homeowners are refinancing to reduce their terms as well as their monthly payments. By refinancing to a mortgage with a lower interest rate, you can pay slightly more each month and pay your house off far more quickly. Your other option is to keep your term the same and reduce your monthly payments. In the following example, notice how the term and interest rate are both reduced.

Original mortgage: $300,000 loan, 30-year fixed @5.25%
New mortgage: $300,000 loan, 15-year fixed @4.00%

You can also change from a variable rate to a fixed rate. Fixed rates are attractive now because it is very unlikely that rates will improve in the next several years. Rates for a 15-year fixed mortgage can be easily obtained well below 3%.

Sell Your Vehicle

money car keys exchange

Americans have relied on vehicles for nearly 100 years. Expensive insurance and maintenance costs may be burning a hole in your wallet. Why not sell your vehicle and save money every month?

A car is not as necessary as you may think. Ridesharing services such as Uber and Lyft are excellent ways to get around. If you don’t have a daily commute you can rideshare to pay as you go. These services can save you hundreds of dollars every year and take the hassle out of driving and parking.

Whenever you’re out and about, bring your PAX mobile medical alert with fall detection to keep you safe. This great gadget from Alert1 can save you money over other medical alert devices. It’s worn comfortably around your neck, can be used anywhere in the country and will get you help fast in an emergency.

Reduce Utilities

adjusting water heater temerature

                Reducing heating and air conditioning costs can make a huge difference in your monthly utility bill. 

 Here are a few ways to reduce utility, heating and air costs:

  •  Install LED or incandescent lights in your home. These lights use only a fraction of the energy of traditional fluorescent light bulbs. They are also brighter and they last much longer. It’s a wise investment to bite the bullet to retrofit your home today.
  • Invest in an automatic thermostat. With an automatic thermostat you can set your heating and air to turn on and shut off at specific temperatures. For example, set your thermostat to 68 in the winter and 74 in the summer. By never overusing the air conditioning in the summer or the heating in the winter, you can save hundreds of dollars each year.
  • Turn the water temperature down three or four degrees. You won’t notice the difference in the shower or when doing dishes. But water heaters use a significant amount of gas to keep the water at temperatures over 125 degrees.
  • Buy a water heater blanket. to help insulate your boiler and reduce gas costs. Don’t let expensive heat escape from you water heater this winter.
  • Invest in a tankless water heater. This type of boiler heats water on demand and does not waste energy by continually heating idle water. It is also much smaller and heats water more quickly, so you won’t run out of hot water.
  • Insulation. The most efficient way to reduce energy costs is by insulating your home. Upgrade the insulation in your walls, buy double-pane windows, and upgrade weather-stripping around doors. This will help keep your home cool in the summer and warm in the winter. After the initial installation costs, your energy savings year after year will be free. Also, this is will help increase the value of your home as young home buyers are very conscious of energy costs and the environment.

Entertainment Expenses

cutting cable

We all love to watch our favorite television shows, but cable and satellite are expensive. Switch to a cheaper alternative such as Netflix, Hulu+ or Amazon Prime. At only $8/month, Netflix has nearly 6,000 titles in high definition, including dozens of original shows including several Emmy winners.

  Television shows and movies aren’t the only way the internet can save you money. Many of us subscribe to magazines for years without reading a single issue. Get your news online and cancel any newspaper or magazine subscriptions you don’t use. Old habits die hard, but once you cancel a subscription you won’t look back, except to wonder why you’ve got a few extra dollars in your pocket.  

Reduce Food Costs

lady holding veg basket

Food is often one of our simplest costs to reduce. Preparing your own meals can significantly increase the size of your bank account at the end of the month. It’s also a great way to eat healthier. Take a page from serious athletes and prepare meals in bulk. This will allow you to freeze enough to have meals already prepared for the week.

If you don’t mind getting a bit of dirt under your nails, plant a garden. It will add fresh vegetables and herbs to your kitchen for free. Make the best salsa in the neighborhood with fresh tomato and cilantro. Or make tasty side dish with a baked acorn squash.

Studies have shown that we can’t tell the difference between name brands and generic brands. Save on every item you buy and leave the grocery store triumphant with generic brand food items.

Raise Your Deductibles

Have you been in a car accident or caught your home on fire lately? If not, consider raising your deductibles. This is a great way to reduce your monthly expenses. You’ll likely never need to use your home insurance. And if you’re a safe driver, it’s a waste of money to keep a low deductible. With a simple call to your friendly insurance agent you can raise your car’s deductible from $250 to $500 and reduce your monthly insurance payments from around $30 per month. This strategy is best for those with a healthy emergency fund that will allow them to cover the higher deductible if there is a need to use the insurance.

Downsize Your Home

senior couple sitting on stairs

If your children have left the nest and you’re living in the same home, you’re paying for space that you’re not using. Consider moving into a smaller home with a more manageable mortgage and less space to clean and manage. Whether you decide to age in place or move somewhere new, remember to prepare your home for safe aging and always use your Alert1 mobile medical alert.

Live Smarter and Live More

If you would like to have a few extra dollars in your pocket at the end of each month, there are many ways to save and be better prepared for retirement. Switch from cable to Netflix, raise your deductible, and change your light bulbs. Once you make some money-saving decisions, you'll have more money to travel and do the things you love. 

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