Everyday changes that you can make
Many people do not have a budget or any other guardrails to determine how they are spending. As such, they are unaware of the types of expenses that may be draining their monthly income and many times causing them to be in a deficit. The result is a domino effect, with less savings and unpreparedness for larger future expenses such as purchasing a home, college tuition for their children, and ultimately for retirement.
If you find yourself in this situation, there are a few things that you can do right now to reign in your monthly spending, and begin paying off debt, or saving for your future. Here are ten quick things to start doing now.
Ten Extra Ways To Find Cash In Your Budget
1. Reduce your daily meal expenses
Living in a big city, it is very easy to spend $20 – $25 daily on meals. If you are a big coffee drinker, you spend $5 on coffee, another $5 for breakfast, and $10 – $15 for lunch. This could result in spending in excess of $400 per month. A simple way to keep most of that money in your pocket, is to eat breakfast at home and pack your lunch. To avoid completely depriving yourself of Starbucks, you may choose to purchase coffee only twice per week, instead of five times. This change alone can save you over $300 per month.
2. Stop maintenance and overdraft fees
While many banks charge a fee and require a minimum balance, there are many free checking and savings accounts available. Some of these accounts will even pay you interest. You just need to do a quick online search to find these types of accounts. Additionally, instead of having an overdraft fee, keep a cushion in your checking account to cover any gaps that exist between paychecks, or apply for an overdraft line of credit. Lastly, do not use the ATM of other banks, as the fees can be high.
3. Avoid parking tickets and argue all fines
Getting unnecessary parking tickets is like flushing money down the toilet. If you are using a parking meter, always ensure that you put enough money that will cover the time you will be away. Do not put less and hope that you do not get a ticket. It is better to put your vehicle in a garage and pay a flat fee, than get a ticket, because it is highly likely that the fees for the ticket will be higher than the parking cost. To avoid tickets, you also want to ensure that you update your registration and inspection in a timely manner. If you do receive a ticket, you should appeal, as many times you may be able to get it reduced or thrown out.
Related article: 5 Tips for Reducing Your Debt in 2021
4. Buy second hand items
There are many websites where you can find second hand items at deeply discounted prices — sometimes in pristine condition or even new. You can purchase cars, furniture, books, designer clothes, etc., which can save you hundreds of dollars annually. Popular sites include Facebook marketplace, Ebay, amazon, and Craigslist, to name a few.
5. Use credit card points to reduce vacation expenses
You can obtain a points card, and use it to pay your monthly expenses where you will not incur a fee. Pay off the card within the 28 – 30 days time frame. The points you receive can then be used for your vacation or other purchases. To benefit from the points, be open to travelling to any destination. Once you find a good travel deal, purchase the ticket to lock in the price. You can also use the points on many travel sites to book villas or other accommodations at reasonable prices.
6. Shop with a list
We are all guilty of walking into the store for one or two items, and walking out with a shopping cart. A simple way to avoid this, is to go with your grocery list. A good app that you can use is Our groceries, which keeps all grocery items in one place for the entire family. This way you go in and out in a short time with exactly the items you desire.
7. Bring your own water
We could easily spend hundreds of dollars on bottled water each year. Bottled water is not cheap, and it can be found everywhere. Fill our water bottle at home and refill while you are out. There are generally many different places that you will be able to get refills at no cost.
8. Gym membership
For many people, they have very expensive gym membership which they do not use, but they are emotionally attached to it. You can significantly reduce your gym membership by getting an online membership, or evaluating your existing membership to get a lower priced one. For example, if your membership is costing you an extra $30 per month to give you the flexibility of going to any gym around the country, but you only go to your home gym. It is time to downgrade your membership. If you need to go to a gym while travelling, you can always pay a fee as a guest, for going to a gym in that city. Another way to reduce gym membership fees is to join an online gym class, which is generally much less expensive.
9. Personal Care
For laundry, use store brand detergent. If you read the labels, you notice that many of them have the same ingredients. Also use cold water to wash and hang your clothes to dry outside if possible, especially during the warmer months. For your skin and hair, you can opt to use products in your kitchen such as olive and coconut oil, as well as apple cider vinegar. They are natural and tend to get glowing reviews from people who use them.
10. Reduce your use of Uber
Because this car-sharing system is now at our fingertips, many times we forgo our regular mode of transportation to grab an uber. This could quickly blow up your budget, if you have not factored in the monthly cost. UberEats has a similar impact. Be very mindful of how much you are spending on both of these, and consider whether these costs are a necessity or if you would be able to find a more cost efficient alternative, such as the bus or subway, and cooking at home.
It is clear that none of these tips are original. They are more of a reminder or an agitator for you to begin making measurable and impactful changes immediately. These changes can have a very significant impact on your financial future as the cash identified from this exercise can be used to pay down debt, to build your emergency fund, or to invest.
If you have not yet created an emergency spending account, check out this video on How Much Emergency Fund You Need.
Tanya Taylor, CPA, MBA is the founder and CEO of Grow Your Wealth. Her mission is to empower women and BIPOC families with the tools to become financially empowered by meeting them exactly where they are – whether it is repairing credit, demolishing bad debt, investing and creating multiple streams of income, tax planning and protecting their wealth so that they can enjoy life, and leave a legacy for generations.