Whether it is your New Year’s resolution or just something you want to be more mindful of, it’s rarely the wrong time to make saving money a priority. After all, saving money has plenty of benefits, and can provide you with a great deal of flexibility.
But saving money isn’t always easy to do. You may not be up for a raise yet at work, or perhaps you’re not interested in leaving your existing job in search of a higher-paying job elsewhere.
Is all hope lost for saving money if you’re in this situation? Absolutely not. You can always work on lowering your bills, which will result in being able to save more money! How do you lower your bills? We’ll give some tricks and tips below.
Know Your Bills
Before you can start lowering your bills, you need to have a complete understanding of what you’re spending your money on. This is really broken into two different sections.
First and foremost, you need to think about all the bank accounts and credit cards you have. It’s not uncommon for someone to forget about a bank account or a credit card, and that account may have an expense associated with it, or a bill, that you simply forgot about. You can’t lower something that you forgot existed!
Secondly, you need to establish a trend. This could take a bit of work, but it’s nothing to be scared of. Simply put, you need to understand exactly what you’re spending your money on, and how much money, on average, is spent on such expenses or bills. A common practice would be to review the trailing 90 days and calculate your average expenses per month.
Analyze the Data
Now with all your bills identified, and with an understanding of how much money you spend on each bill per month, it’s now time to analyze the data and make adjustments. Categorizing your bills between essential and non-essential can also be done, but regardless of how essential the bill is, our goal is to work on reducing monthly expenses, and reducing monthly expenses is also possible on your essential expenses.
Once the bills are analyzed, it’s time to take action. Here are three ways you can take action to lower your bills.
Try Contacting the Company
Believe it or not, you may be able to lower your bills just by contacting the company the bill is for. For example, perhaps you are out of contract with your cable and internet company.
Give them a call and see if you can renew a contract for a lower monthly rate. If that’s not possible, see if there are any other options in the area that offer a competitive rate. The competition may offer you a great monthly package to earn your business.
Consider Refinance Debt
Refinancing debt is another great way to lower your monthly bills. Perhaps you are currently paying a 4.5% rate on your existing mortgage.
Contact a loan officer and see what the current mortgage rate is. If the existing rate on mortgages is less than the rate you are currently paying on your mortgage, you may be able to save a significant amount of money per month simply by refinancing.
This isn’t only true for mortgages either! You can refinance a car loan, personal loan, and even your student debt.
Eliminate the Bloat
Last but not least, eliminate the bloat. What bills are you spending money on each month that you may not need?
Perhaps your gym membership is $100 a month and there is a more economic gym in the area for $20 a month. Or, there may be services or subscriptions you have that you seldom use, yet pay for each month.
Cutting these out of your life can save you a lot of money without negatively impacting your quality of life.
Develop a Budget
One of the best ways to keep your saving on track is to develop a budget proactively. Allowing yourself a certain amount of money to spend each month and a certain amount of money to invest will help you stay on the right course.
Benefits of Budgeting and Saving Money
Of course, budgeting allows you to save more money, and saving money is always a good thing. The benefits of saving money are endless, but at the top of that list is the financial freedom that comes when you have enough money saved.
Instead of living paycheck to paycheck, or being forced to stay in a job you hate just for the money it provides, saving money gives you options and freedom. You can also make investments with the money you saved, and those investments can help diversify your cash flow and earnings.
Unsure Where to Begin
Even though the thought of lowering your bills may seem easy and straightforward, personally managing your finances can be difficult. It can be challenging to take an unbiased look at your financial situation, set realistic goals, and hold yourself accountable to those goals.
That is exactly where a financial advisor can step in and help you. Financial advisors not only help their clients make sound investment decisions but also help their clients build a strong financial foundation.
A key component of that foundation is evaluating your bills, identifying opportunities to lower your bills, and ensuring you have the right budget in place.