If you’ve finally committed to cracking down on your budget, you may be thinking that you’ve already shaved your expenses as much as possible. But here are five great places to start cutting extra budget fat to help you get out of debt even sooner.
1. Food
Yes, you have to eat. But if you’re not careful, food costs can blow a budget fast. Financial planning coach Mindy Crary offers money-saving tips that range from no-brainers (plan meals in advance, eat in and eliminate take-out) to the not-so-obvious, like reducing trips to the grocery store. Pledge to go only once per week, she says, and expenses are sure to decrease. “I never tell my clients they need to do anything 100 percent of the time,” Crary adds, “but if
they do it 75 percent of the time, they will spend much less than when they
weren’t thinking about it at all.”
2. Media Bundles
Still paying upwards of $100 a month for a bundled TV-internet-phone package? Don’t be ridiculous. With an estimated adult saturation of 91 percent, cell phone ownership is at an all-time high and has already begun replacing landlines. If your budget is tight, it may be time for you to join the ranks of the wireless-only crowd.
And now, thanks to Roku, Hulu, Amazon Instant Video and others, cutting the cable cord has never been easier. You may have to wait until the following day to see new episodes of Scandal and Mad Men, but if it means freeing up an extra $40 or $50 in the budget, so be it.
3. Clothes
Clothing consignment stores are no longer confined to cramped, musty storefronts at local strip malls. The internet has allowed for a new high-fashion crop of resale outlets (like Shop-Hers and Walk In My Closet) to help the designer diva build her wardrobe on a budget.
Not down with used threads? No problem. Flash sale sites offer drastically reduced prices on brand-new pieces—albeit in a very limited inventory (hence the term “flash”). Try Ideeli for everything from women’s clothes and accessories to home décor, Rue La La for men’s and travel purchases, and Zulily for kids’ stuff.
4. Insurance
Like paying taxes and pretending to enjoy your mother-in-law’s meatloaf, purchasing insurance is one of life’s necessary evils. And between covering the house, the car and the kids—the costs can skyrocket.
Aaron Britz, President & CEO of Legacy Wealth Management, a financial planning firm in Tennessee, saved around $300 a year on his home insurance by updating the policy. He also reduced his car insurance costs by eliminating collision coverage on an older vehicle. Britt advises clients to review policies every two years to be sure that coverage is still relevant to their family’s needs. “No part of a financial plan is static,” he says. “As is in life, things are constantly changing, and new risks can be presented to a person or family.”
5. Technology
If it seems like Apple and other tech companies have a singular focus on coercing you out of a few hundred dollars every couple months, you’re absolutely right. “The technology sector is constantly releasing new products with awesome features and are making billions of dollars doing it,” says Jim Miller, accountant, blogger and author of Budgeting Doesn’t Have to Suck. “What people need to ask themselves is whether or not these new features are needs or wants and where they fit in their budget.”
Miller recommends that consumers buy everything used and shop for older models of certain gadgets. “You want an iPhone 5s?” he asks. “Not if your budget is tight. You can get an iPhone 4s for free.”
