Change Your Habits to Slow Down Spending
The perpetual cycle of earning and paying repeats over and over for modern consumers, driving spending on everything from housing to entertainment. Spending habits are dynamic, changing with time and circumstances. Irrespective of income level or wealth, spending has a tendency to chase earnings, until there is little left after completing each payment cycle. The fact that bills are paid on time and family members live comfortable lives are silver linings for those fortunate enough to keep pace with financial demands, but it is also natural to strive for more. Savings, investments, and contingency funds, for example, add to your overall financial health, so carving out reserves from your household budget helps build security. Unfortunately, these strides are hard to make, when living from paycheck to paycheck.
Relatively speaking, some living expenses are set in stone. Your monthly rent or mortgage payment, for example, is established – at least for the near-term, so you must account for this immovable piece of your household budget. Car payments, monthly phone contracts and student loan repayment represent additional fixed expenses you must account for each month. At the same time, a great deal of day to day spending is dedicated to discretionary purchases. While you may not be able to shave savings from your basic monthly costs of living, your elective buys may show room for savings, when put under scrutiny. If you are committed to holding on to more of your money, take a close look at your spending habits and make sensible adjustments.
Minor Spending Habits Adjustment Yield big Savings
Maintaining the lifestyle you’ve earned and grown accustomed to is a reasonable expectation, but when cash flow isn’t meeting expectations; small adjustment to your spending habits will help you reach your financial goals.
Turn off Your Television – There is more than one money-saving reason to log fewer hours in front of the TV. For starters, cable services and other TV subscriptions cost money, so this recurring expense quickly drains household budgets. TVs and associated hardware add to the cost of viewing, so family entertainment centered on the television includes costly sound systems, receivers, cabling and adapters. The passive nature of television entertainment also makes it less appealing than other forms of entertainment. Stepping away more often makes your family more productive, which is like money in the bank.
Evaluate Your Use of Credit – Borrowing money is a natural aspect of personal money management. Loans are used to cover everything from major real estate purchases to daily expenses. Although they seem distant, credit cards and mortgages both represent consumer lending options – sharing the distinction with dozens of other types of financing. With so many choices and uses for credit, it pays to evaluate household spending on loan payback, interest, fees and other related expenses. You may find cost-effective alternatives that make more sense than your current arrangements. Consolidating high-interest credit card debt into a loan with a better APR and payback terms, for example, can save on interest costs and lower your monthly payment obligation. Even without strong credit, alternatives like guarantor loans open doors to financing, using a cosigner to boost your credit score. The list found here compares competitive rates.
Your home mortgage is another major credit commitment worth analyzing. If your interest rate doesn’t reflect prevailing standards, it may be worthwhile to refinance to a better APR. Closing costs and other expenses should be taken into account before making commitments, ensuring you’ll quickly recover costs and start drawing savings from the new loan.
Entertain at Home – Shows, concerts and other attractions are well-earned rewards for your hard work, but the cost of outings adds-up quickly. Instead of arranging for expensive excursions with friends, try organizing a dinner party or game night at home. With others on-board, the hosting home revolves, so everyone in the group takes a turn as host or hostess. There are no tickets to buy and potluck-type gatherings can be selected to further spread costs. Even if the host provides a meal for everyone, spending equalizes as free-riders enjoy others’ hospitality at future gatherings.
Learn to Cook – Fine-dining and special meals out are mainstays of entertainment. The privilege of enjoying well-prepared food, without cooking or cleaning-up is also a strong lure, drawing families to restaurants out of convenience. Unfortunately, relying on carry-out, delivery and restaurant meals comes with a price tag. If you are serious about cutting household spending, change your dining habits to include more home cooking.
It may be hard to find financial relief from fixed expenses, like mortgages and other ongoing payment obligations, but adjusting your spending habits leaves room for discretionary savings. To get your financial house in order, look closely at the types of credit you use and adopt low-budget habits – including home-based meals and entertainment.