July 14, 2024
8 Tips To Cut Hidden Expenses That Could Save You $830 a Month

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People talk about cutting expenses to save money all the time. But it’s hard to imagine the actual benefits until you start doing it yourself. Even then, taking the necessary steps to start saving is tricky — especially if you don’t know where to begin.

Among the many regular expenses you’re likely paying each month, there’s a good chance that there are some hidden ones in there as well. This could be that subscription service you signed up for during a free trial but forgot to cancel and are now paying for via automatic payments you don’t know about. Or it could be your monthly phone plan that you definitely do know about but might not have realized has gone up in price.

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If you want to save money, the first step is to look for those hidden expenses and see which ones you can cut out. GOBankingRates spoke with Stoy Hall, CFP, CEO and founder of Black Mammoth, to learn the best ways to cut those hidden expenses. Here’s what he suggested.

Audit Your Subscriptions

“Go through all your subscriptions — streaming services, magazines, apps — and cancel any you don’t use regularly,” he said. You could save anywhere from $20 to $50 a month.

According to C+R Research, consumers estimated that they spend around $86 a month on their monthly subscriptions. After a deeper dive, however, it was found that the average cost of these services was $219 — $133 more than previously thought.

If you’re actively using certain subscriptions, you can of course keep them. But if you have redundant ones — like two subscriptions to music streaming services — getting rid of the extras can save you money.

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Switch to Energy-Efficient Devices

The average residential household’s electricity bill is $135 a month, per the Energy Information Administration, though it can be higher or lower depending on where you live, how many people live in your home and your specific habits. To save money, look for ways to optimize your energy usage.

“Use energy-efficient appliances, switch to a cheaper energy provider and unplug devices when not in use,” Hall said. One option is to get a smart thermostat. The device and installation can cost a couple hundred bucks, but your long-term savings could well be worth it.

Hall estimated that you could save anywhere from $30 to $100 a month by doing this.

Eat In More, Go Out Less

This isn’t a hidden expense if you’re watching your monthly expenses closely. But if you’re like most people, you could be spending more on dining out and coffee runs than you think. That daily $5 latte at Starbucks is $100 a month if you go every workday — and that’s assuming you never get any extras or pick up a bagel while you’re out.

“Brew your coffee instead of buying it daily,” Hall said.

As for dining out, he suggested cooking more at home and going out only for special occasions — think birthdays, graduations, anniversaries or romantic dates. Between cutting back on dining out and skipping coffee runs, you could save $100 to $200 a month — if not more.

Look Over Your Insurance Policies

When you add up all the different types of insurance policies you probably have — auto, home or renters, pet, health, etc. — you could be looking at hundreds of dollars a month or more. And while you can’t exactly get rid of your insurance policies, or at least not most of them, you might be able to pay less.

“Shop around for better rates on car, home and health insurance,” Hall said. “Bundle policies where possible to get discounts.”

Even just bundling things like your car and homeowners insurance could net you $50 to $100 in monthly savings.

Consolidate Your Debts

Debt consolidation is the process of combining two or more high-interest debts into one loan or credit card. This new debt should ideally have a lower interest rate, which is in and of itself a potentially huge savings opportunity.

“Consolidate high-interest debts or transfer balances to lower-interest credit cards,” Hall said. “Make extra payments to reduce the principal faster.”

You could save around $50 to $150 a month this way. Be sure to do your research and compare your options before choosing this method. You’ll also want to check your credit score — if you don’t already know it — to ensure you qualify for the best rates and terms.

Review Your Phone and Internet Plans

As with your insurance policies, you could potentially negotiate a better deal on your phone or internet plans. And if that doesn’t work, you might be able to switch to a new provider with a smaller monthly fee.

“Check if you’re on the best plan for your usage,” Hall said. “Downgrade or switch to a more affordable provider if needed.”

Even if you save only $20 to $50 a month, that adds up.

Use Rewards and Cash-Back Programs

Hall also suggested using credit card rewards programs, cash-back apps, loyalty programs and anything else that gets you savings on everyday purchases. Most major grocery stores, for example, have free loyalty programs with automatic discounts on in-store or online purchases. Cash-back apps like Ibotta automatically give you cash back on groceries at certain major retailers.

This could save you $10 to $30 a month.

Wait Before You Buy

It’s all too easy to pick up a bag of chips at the checkout counter or add a couple of extra goodies to your cart as you browse. But the average person spends around $150 a month on impulse purchases — that’s $1,800 a year of unnecessary purchases.

Hall suggested implementing a 24-hour rule whenever you shop. Essentially, if the item wasn’t already on your list of must-haves, wait for an entire day — or two — before getting it. If you still want it, then you can go back and buy it.

Total Monthly Savings Potential

By implementing these eight simple tips, you could save anywhere from about $430 to $830 — or more — each month. In a year, that’s $5,160 to $9,960 in savings.

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This article originally appeared on GOBankingRates.com: I’m a Financial Planner: 8 Tips To Cut Hidden Expenses That Could Save You $830 a Month

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