A personal-finance expert I recently interviewed recommends that you live within your means and make periodic cuts to your monthly budgets, adjusting your living costs to your income level. Cutting an expense may be a good thing, especially when it comes to discretionary spending – the kind you could live without, such as vacation or travel. Costs you can slash from your monthly budget range from utilities and credit card charges to Internet access, phone, cable and insurance.
1, How Can I Reduce Utilities Expense?
Tactics to reduce utilities costs vary by technical sophistication, architectural implication, legal ramification and a pastiche of other elements that goes from personal preference to household comfort. Implement a tactic that works for you, fits within your budget and meets your goals, so that you're no longer shocked the next time you see your electricity bill. Here are some tips that can help reduce the price tag on your electricity consumption:
Convert some appliances from natural gas to electricity, taking advantage of the stable electricity prices that pale in numerical comparison with the natural gas prices, which have increased significantly in the last several years. Be mindful of the conversion costs involved here, but the overall benefits are worth it. Convert equipment like water heaters and gas furnaces.
Improve weatherproofing to reduce little air leaks, which could cause electricity bills to spike, especially when warm or cold air penetrates your house and forces heating or air conditioning units to work harder than necessary.
Go after wasteful usage. Believe it or not, not switching off that basement light for days or having the computer run continuously all year long – except the forced reboots resulting from software updates – invariably add up and produce the kind of high numbers you don't like to see on your electricity bill.
If possible, use alternative energy to save cash. The upfront costs, mainly for installation, for some alternative energy equipment may be high, but think long-term benefits and the ability to save cash down the road. Alternative energy uses include solar heating, wind-powered turbines and wood-burning stoves.
2, Am I Paying Too Much Credit Card Interest?
You're paying too much interest card if you carry a high balance, only make the minimum payment every month, or have a credit score that is lower than 640 – that is, in subprime territory, as financial analysts and debt advisers usually say. Contact your credit card company and ask for a lower rate. That's it: just ask. You'd be surprised the kind of positive feedback that diplomacy, politeness and decorum often produce. The company might grant your request, especially if you've been an exemplary cardholder in the last, say, 6 to 12 months.
3, Should I Put a Brake on Those Rewards Programs?
Rewards programs are designed to make you spend, making sure you get an incentive whenever you reach a specific threshold. But ask yourself whether you really need some of the items you regularly buy with rewards programs cards. Before jumping on the rewards programs train, make sure you understand the good, bad and ugly parts of the programs.
4, Can I Save Money by Refinancing My Home?
Stay in touch with your banker and constantly monitor interest rate information to determine the best time to refinance. Timing is essential in refinancing, so make sure you only apply when interest rates are significantly lower than the rate you're currently paying – say, from 8% to 5.5%. If the rate difference is too slim, you could end up losing because the monetary advantage that attracted you to refinancing in the first place would be absorbed by refinancing fees.
5, How Much Am I Paying for Internet Access?
Review your Internet bill and figure out what the competition is offering. The goal is to make sure you're not paying too much, so call your provider and ask for ways to slash your Internet. Also, reassess your needs and consider switching, if possible.
6, Is My Telephone Bill Too High?
The answer is yes, especially if you regularly make long-distance calls. Consider using alternatives like VoIP or computer-enabled video communication to reduce your overall phone bill. Most phone companies offer a flat rate for local calls and calls made within the United States and, sometimes, Canada.
7, Am I Paying Too Much for Cell Phones?
You might be paying too much for cell phone communication if you use the device for international calls or spend an inordinate amount of time browsing the Internet. Use Billshrink.com's comparison tool to see if your cell phone company is ripping you off or is within a reasonable range of competitors' prices.
8, Can I Reduce My Cable and TV Bill?
You can, as soon as you completely remove all or some of the premium channels you have but rarely watch. You also can put a dent in your cable television bill by watching fewer pay-per-view events, some of which charge top dollar. You also can call your cable TV provider and ask for discount programs or other ways to reduce your bill.
9, How Do I Slash Financial Fees?
Besides credit card charges, financial fees include things like overdraft fees, balance transfer fees, and IRS' penalties for late fiscal payments – not to mention those forgotten traffic tickets that silently accumulate interest over the years. Go through these charges and try to pay off those with higher rates, like tax debt and overdrafts.
10, What Insurance Coverage Do I Need?
Use this tool to calculate your life insurance needs and this tool to estimate your auto insurance needs. Some insurance companies reward consumers who display good behavior by way of reduced premiums or other forms of discounts.
The key to cutting expenses and savings money is to constantly review your living costs, being ready to seize opportunities that come in the form of discounts along with promotional and seasonal offers. You can slash expenses in areas as varied as telephone and Internet, insurance, finance charges and discretionary items like travelling and entertainment.