Trying to cut spending is a great goal. There are a lot of things you can do with extra money at the end of the month. But making it happen is often a different story.
It’s easier to stay on track if you have a goal and know why you’re doing it:
- Save for a first house, a new car, or a vacation;
- Starting a retirement savings fund;
- Paying down your debt faster;
- Saving for your kids’ post-secondary education;
- Starting a business or going back to school yourself.
But how do you get started? These are the 5 best ways to cut spending and save more on an everyday basis.
#1 Get Out of Debt
Debt is expensive. The true cost of debt is a big burden on your budget and it’s all because of interest. Every time you carry a balance on your credit card, the things you bought get more expensive than the price you paid. Revolving debt, i.e., credit cards that allow you to carry a balance from month-to-month, lets you stretch your spending now, but spreads your future income thinner.
Getting debt-free is really the best thing you can do for your monthly budget. Not only can it eat up much of your spending power, it also disincentivizes savings. Because interest rates are so high, paying credit card balances should always a higher priority than saving.
But if you’re looking to cut spending and save more money, paying down those balances may be the reason. It’s a great goal to have but not always possible. In cases where you’re too deep in debt to reasonably pay it back, it may be time to discover debt relief options.
There are several types of debt relief that you can access, including a consumer proposal and bankruptcy. According to licensed insolvency trustees G. Slocombe & Associates, one of the advantages of a consumer proposal is that you can keep your assets and still enjoy debt relief. Talk to a licensed insolvency trustee for more details.
#2 Start Making a Grocery List
It’s a simple thing, but it can make a huge difference when you’re out at the grocery store. Knowing what you need will help you stick to a plan and cut out impulse buys. You can also start meal planning for the week, planning on ways to use up leftover produce that might otherwise go in the compost.
#3 Bring Your Own Lunch
Eating out for lunch is one of those expenses that seems small but quickly gets out of hand. Even spending just $10 a day on lunch will cost you $50 a week. If you work 50 weeks out of the year, you’re spending $2,500 of your annual income just on lunch. Meanwhile, you’re probably throwing out leftovers!
#4 Wait 30-Days Before You Buy Something
New jacket caught your eye? Or maybe it’s a new video game? Whether it costs $1,000 or $20, instant gratification is behind a lot of our unnecessary spending. When you want something, wait out the urge to buy it immediately. Instead, wait 30 days. If you still want it (and you can afford it), you’re in the clear, but in many cases the urge to buy it will pass. It’s tough when sales encourage you to buy immediately, but zero dollars is cheaper than half off.
#5 Re-evaluate Your Bills
Do you really need three separate streaming services? Is there a way to bundle your phone and internet bills? How much data do you actually use, and could you get by with a smaller plan? There are a lot of ways you can save by re-examining your bills and reorganizing your monthly expenses.
Cutting spending can take a bit of creativity and discipline, but it doesn’t have to mean depriving yourself. Get budget smart and start saving today.