Whether you rent or own, there is a lot of room to save on most peoples budget. And, since this part of your budget represents such a huge portion of your budget, you can make some mighty big cuts.
If you rent, you can have several options to save money each month.
Move To A Smaller or Cheaper Place
Since you are not tied down to a home as a renter, you are free to move just as soon as your lease is up. Rents vary quite a bit depending on where you want to live, the age of the property and the size of the property.
Get A Housing Voucher
If you qualify, you might be able to save money on your rent with government assistance. If you need the help and you qualify, why not take advantage. Find out if you qualify for aid and then go shopping for a landlord that accepts it.
The best thing is that Section 8 housing is everywhere so you will not be confined to low income areas.
For Home Owners
If you own your home, you have even more ways to save but they get a bit more involved.
Refinancing your home will take a lot of paperwork and can be a bit tedious but it may be worth it to you if you want to shave several hundred dollars off of your payment.
This might be an option for you if you meet one of several different conditions.
- Interest rates have dropped.
If interest rates have dropped at least .75%, it may be worthwhile to go through the time and expense of a refi.
- Your credit has greatly improved.
If your credit has improved to such an extent that you can save .75% or more on your interest, a refi might be good for you.
- You have 20% equity and want to escape FHA mortgage insurance.
FHA mortgage insurance does not automatically drop any more unless you put over 10% down on your house. Even then, it takes 11 years to drop. If you have enough equity to go conventional and ditch mortgage insurance, refi should be a good option.
- You have been paying on your home for many years.
If you have been paying on your home for five years, you may want to save money by stretching out the payments to a longer term. If interest rates have not increased, this might be a good option.
Cut Your Escrow Expenses
Your escrow payment goes up and down based on the expenses that come along with your mortgage. You can reduce the escrow payment and your total payment by cutting these expenses, mainly home owners insurance and property taxes.
- Home Owners Insurance
Shopping around for another insurance provider could yield you some nice savings because rates very quite a bit. Raising your deductible can also lower your annual premium.
- Property Taxes
There are ways to lower your property taxes, believe it or not. First is to dispute the value of your home. You usually have a several month period every year where the Appraisal District will hear disputes. If you believe they are overvaluing your home, this might work.
Another way to lower your taxes is with exemptions. You may qualify for homestead exemptions, exemptions for military, for disabled, etc.
2) Auto Expenses
Another huge drag on your budget is your car or truck expenses. This can also be lowered if you are willing to do a little work. Here is how you can trim the fat.
Refinance Your Loan
Unlike a home loan, it costs nothing to refinance your car loan in most cases. If your credit has improved since you last received a loan, you should be able to qualify for a cheaper rate.
The good thing about refinancing a car loan is that it is pretty easy to do. You might have to submit a few documents but the rest of the work will be done by the company refinancing your loan.
As an added benefit, you can probably skip a payment when you refinance.
Get A Cheaper Car
If you really want to make a big cut, perhaps you should sell your car and get a cheaper one. This can be a hard pill to swallow but sometimes you need to make these sacrifices if your budget isn’t working.
Selling your vehicle only works of course if you have equity or very little negative equity and can qualify for another auto loan.
Speaking of equity, if you have enough equity, consider selling your car and cashing it out. Then buy a used vehicle for cash and avoid having a car payment at all.
Change Auto Insurance Companies
Just like with homeowners insurance, rates for auto insurance are all over the board. You can save in several ways.
- Call your existing provider and see if they offer any other discounts.
- Shop around for a new insurance company.
- Raise your deductibles to a higher amount to cut your premium.
Your food budget can be altered quite a bit if you are smart about what you buy and can make some sacrifices. Here is where to make the cuts and save some money on food.
You can save a lot of money by shopping specials. Get a deep freezer for a couple of hundred dollar bills and freeze meat until you need it. Meat will last several months or more in the freezer, so buy it when it is really cheap.
For your greens, shop at farmers markets and go right to the source. You will get a better product and save money.
Staples like rice, beans, canned goods and more are best bought at warehouse stores, they are very much worth the membership price.
Try to cut back on meals out in general. Bring your lunch to work and cut your number of dinners at restaurants in half.
When you do go out, be sure to take advantage of Groupon deals and restaurant email clubs.
Also, when you go out to eat, take the leftovers. With the size of most entrees these days, you can easily get a lunch out of your leftovers.
4) High Interest Debt
Your credit cards and other high interest revolving debt can take a toll on your budget. You might have as much as $500 or more in monthly credit card payments and that is just the minimum due. Here are some ways to cut down on those payments.
Consolidate Your Debt
The average credit card interest rate is 17% although you could be paying interest as high as 29%.
Consolidate these loans into one with lower interest and reap the advantages. You could cut the monthly interest you pay in half and make the bill easier to pay. One payment is much easier than 3, 4 or more.
As a side benefit, if you consolidate, you will have a bunch of paid of cards. Don’t close them and don’t use them and your credit rating should increase.
Lower Your Interest Rates
Your credit card company may be willing to work with you if you have been paying on time. Call them and ask for a reduction in your interest rate. It never hurts to ask.