Archives for 2019

7 Easy Ways To Reduce Monthly Bills And Expenses

When you think about it, the majority of monthly bills run under $100.

That's probably why people often dismiss the idea of trying to save as nothing more than a waste of time. After all, keeping your lights on is a necessity, right?

Look at it this way, though — if you find seven ways to save $15, that equals $105 in monthly savings and $1,260 over the course of a year. Who wouldn't want that much extra cash in their checking account?

Plus, if it's this easy to save money on your monthly bills, you can start paying off your credit card debt or student loans sooner than you thought was possible. To get you headed in the right direction, check out these seven easy ways to save money on your monthly bills.

7 Effective Ways To Reduce Your Monthly Expenses

1. Cut The Cord

If you don't watch a lot of TV, or if you prefer movies and shows to live television, consider cutting the cord and dropping cable altogether. If you're currently paying $100 per month for your channel package, you could save a bundle with just this one step.

If you still want to keep some service, go with a streaming company like Netflix or Hulu Plus, both of which cost under $10 per month. And if you already subscribe to Amazon Prime, you can get your TV and movie fix from there, as well. Philo has 45 popular channels for only $16!

Each platform offers plenty of movies and TV series — check them out before making your final choice.

2. Save On Water

Even though your water bill might only cost $50 per month, that doesn't mean you can't save any more money on it. For instance, you can cut your showers down by just a few minutes, and only run your washing machine and dishwasher when they're full.

Put a brick wrapped in aluminum foil in your toilet tank to reduce the amount of water needed for each flush. When brushing your teeth or shaving, be sure the water isn't running.

3. Adjust Your Thermostat

By adjusting your thermostat a mere three degrees in either direction, depending on the season, you can reduce your energy bills by close to 10%, according to the Department of Energy.

To make the transition easier, adjust the thermostat one degree at a time and see if you still feel comfortable. Paring down your household attire to shorts and tank tops in the summer or an extra sweater in the winter also helps make the transition easier.

4. Get A Home Energy Audit

Another way to cut energy bills is to get your home audited for energy leaks. For example, you may need more insulation in your attic or you might have to stop up your chimney to avoid drafts.

Contact your energy provider to see if you can get an audit for free. Even if the fee is nominal, it's well worth it to have a representative come to your home, perform an inspection, and give you a list of the many ways you can save.

5. Review Smartphone Usage Plan

Whether or not you're on an all-unlimited data plan, call your provider and ask for a breakdown on your usage. Once you see how much data you're using each month, find out if there is a more cost-efficient program available.

If you can cut costs without altering your lifestyle, go for it. And if you're using a lot of extra data for social media, cutting down your usage can benefit your life in multiple ways.

Even better, find a better low cost cell phone plan.

6. Use Grocery Coupons

Use the Sunday paper to snip grocery coupons, then download grocery saving apps like Honey, Fetch Rewards or Saving Star for digital coupons and discounts.

This is such an easy way to save — you may be surprised how many of your favorite brands and items are available via coupon each week.

7. Bundle Services

If you're not already bundling your smartphone, Internet, and TV services, consider doing so. You can save a few dollars on each, and you get billed in one single, convenient statement.

If you switch over to a new company, you may be able to take advantage of plenty of teaser discounts and perks, as well. Try to avoid signing a long-term contract if possible, so you can switch again when a better deal comes along.

Final Thoughts

Once your savings are in the bank, don't let them go to waste. Figure out how much you're saving every month and make an extra contribution to whatever area of your finances needs the most help. For example, you may want to put those funds toward credit card debt, retirement savings, or your emergency fund.

Cutting the cost of your monthly bills is great, but using that money intelligently will make all of your money saving efforts worthwhile.

What other ways can you think of to save on monthly bills?

Mitch Brookfield is a personal finance writer and accountant. He writes about making, managing and saving money for a variety of sites. He lives and works in Boston, Massachusetts.

Blogging Bigwigs Enforce Idea That Financial Stability Comes From Living Below Your Means

By Mr. Money 9 Comments

In a recent post on his site, online marketing guru John Chow got into a discussion about money and frugality, and why he chooses not to live beyond his means unlike so many of the other folks out there spend as much or more than they're raking in.

For those people he offers the best piece of financial advice that he ever received.

John Chow

It’s Not What You Make, It’s What You Keep
It really doesn’t matter how much money you make. What matter is how much you get to keep at the end of the day. There are tons of people who make a lot of money and spend every cent they make and more. They drive all the fancy cars, go to the fancy clubs and live a “millionaire’s lifestyle”, only they’re not millionaires. In Miami, they’re known as $30,000 millionaires. They make $30K a year but live like they make a million.
Thanks to low-cost leasing and zero down financing, anyone with even a modest income can project the image of a millionaire. The only problem is, the debt will eventually catch up to them and that’s when it’ll all come crashing down. This was what caused the US financial meltdown. Too many people were spending more than they make and leveraging their debts to the hilt.

In the comments of that same post Darren Rowse of problogger.net fame agrees with John completely.

Darren Rowse

One of the best things you’ve written John.
Financial stability has more to do with what you spend than what you earn.

I’ve had people over the years ask me why I don’t drive a better car, living in a better suburb, wear better brands etc too – but I guess ultimately for me it’s about living within my means – which for me means not only spending less than I earn but also about thinking about the future and using what we don’t spend in a way to produce income.

Of course you can take this principle to the extreme where you never spend any of your money on nice things and live like a scrooge – for me it’s about balancing things. We try to enjoy life by taking some good holidays, eating out in a nice place from time to time etc without going over the top.
Of course not everyone has the luxury of being able to earn enough to invest – but many people could certainly cut down spending.

To me it's encouraging to see these two blogging bigwigs talking about personal finance in such a responsible way. They are displaying the true attributes of those with a millionaire mindset, people who live like true millionaires, and not those who are pretenders.

Why encourage people to live a high-flying lifestyle when you know it isn't the way to true success?

What Do People With A Millionaire Mindset Look Like?

So what does a true millionaire look like? In his book The Millionaire Next Door Thomas J. Stanley takes a look at things that millionaires have in common.

“In the course of our investigations, we discovered seven common denominators among those who successfully build wealth..
The Seven Factors
1. They live well below their means..
2. The allocate their time, energy, and money efficiently, in ways conducive to building wealth.
3. They believe that financial independence is more important than displaying high social status..
4. Their parents did not provide economic outpatient care..
5. Their adult children are economically self-sufficient..
6. The are proficient in targeting market opportunities..
7. They chose the right occupation..
Thomas J. Stanley

John and Darren have the right idea in mind.

They're living well below their means, allocate their time efficiently (I'm sure they have to being as busy as they are), they don't really care about displaying social status, and they definitely chose the right occupation. And of course they're both extremely good at targeting market opportunities.

I feel like I'm on the path to do the same as well, and I feel like I know what it takes to truly succeed.

It all comes down to the execution, however, and I just hope I can continue doing well as these guys are.

Do you feel like living below your means is one of the best pieces of financial advice you could give someone? What advice would you give, and where do you think people should focus in order to be successful?

How Much Money Are You Saving In Your Emergency Fund? Have You Ever Had To Use It?

By Mr. Money 15 Comments

Earlier this week there was a discussion at getrichslowly.org about a poll they had done about emergency funds.

One of the findings was that the amount people were saving in their emergency funds seems to be dwindling over the past 5-6 months.

After reading that post I started looking for other polls to find out how many people are actually saving up an emergency fund in the first place, and to see what they believe is a good place to get their emergency money.

Poll About Emergency Funds

The numbers seem to vary a bit depending upon the source, however, I found a Gallup poll from a few years back that found only about 4 in 10 Americans say they actually have cash on hand in case of an emergency. Only 10% say they have $1,000 in cash available in case of an emergency.

When you dig a little deeper you find that a lot of people aren't depending mainly on cash savings to bail them out in case of an emergency.

Three in four consumers say they would use their savings account as a money source in case of an emergency. Fifty-six percent say they would use credit cards and 50% would borrow from a relative. Thirty-nine percent say they would use their 401k retirement account and 37% say they would use their home equity account.

So besides cash savings (75%), people say they would use these sources to help pay for an emergency:

Credit cards (56%)
Borrow from relatives (50%)
401k retirement account (39%)
Home equity loan (37%)

Based on the fact that only 10% say that they have $1,000 in cash on hand for an emergency, and the fact that so many are depending upon other ill-advised sources of emergency money, I'd have to say people are in general woefully under-prepared.

How Much Money Are You Saving?

So the question is this – how much money are you saving in your emergency fund? Most experts (like Dave Ramsey) will suggest that you save at least 3-6 months of expenses in an accessible cash account.

Personally I think that's a good start, but at our house we usually fall more on the conservative side of things because of the large number of emergencies we've experienced in the past 3-4 years (hospitalizations, baby, car troubles).

We're currently sitting on a nice 10 month cash reserve in our online savings account, and we're building it to 12 months. With the economy as it is, and with one spouse staying home to be with our son, we just feel more comfortable having a bigger cushion in case something were to happen. And something WILL happen.

Money magazine says that 78% of us will have a major negative event happen in any given 10-year period of time.

Have You Had To Use Your Emergency Fund Yet?

Another question for commenters: Have you had to dig into your emergency fund at any point yet? I'd be curious to know what types of expenses count as an emergency, and just how big those expenses were.

For us we've been in a state of continually renewing our emergency fund over the past few years. First my wife was in the hospital for several weeks, which ended up costing us several thousand dollars after insurance kicked in. Our emergency fund covered it, and we quickly refunded it.

We also had a car that died on us – when the engine decided to give up the ghost. Luckily we had saved up a car replacement fund, and only a small amount of our emergency fund was touched.

Next we had another hospitalization for my wife – again covered by insurance, and then by our emergency fund.

So as you can see – major negative events can and will occur – even frequently sometimes!

How much are you saving for your emergency fund? If you don't believe in having a large cash reserve, how will you be paying for any emergencies that crop up? Have you had to use an emergency fund yet? If you have, what was the emergency? Tell us your thoughts in the comments.

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