Let's face it, times are tough right now. Really tough. It's more important than ever to watch every dollar (and penny) that you spend so you either have additional money to put towards other expenses, or even better put in a savings account. But how? When it seems prices are rising for just about everything, there are still plenty of ways to save on household expenses. Some techniques involve cutting back but others just mean you spend your money more wisely. Here's how.
Consider refinancing your mortgage -- if the price is right. When home interest rates go down, you will often hear a lot of folks talking about refinancing their mortgage loan. That can be a smart move. By taking advantage of a lower interest rate, you can often lower your monthly mortgage payment by hundreds of dollars every month and even receive cash if the old loan is smaller than the new loan. However, it is important to look at the whole picture before you run to the bank to restructure your loan. Refinancing your mortgage isn't free. There are a host of closing costs associated with completing the transaction. You need to figure out if what you are spending in closing costs (often thousands of dollars) will cost you more money than what you are saving.
Shop around for utilities. Some utility costs, like electricity or water, you are locked into because there is only one provider in your area. But others like home heating oil, natural gas, telephone and cable have many options to choose from. Spend some time researching costs of the different companies in your area to find what the best rates are. For some, it may mean switching from a telephone land line provided by the phone company to a cell phone plan or even a VoIP (Voice over Internet Protocol), a technology that allows you to make calls through your Internet connection. Many companies ask you to sign on with their company for a year, during which time you can take advantage of special pricing. When that promotional price expires, start shopping around again to see if you can find another good deal. While it may mean your are changing companies and sometimes equipment frequently, you are also saving yourself a good deal of money each month.
Lower your utility usage. While it's unlikely you can negotiate a lower rate with your electric company, you can lower the amount of electricity you use each day with simple, common-sense steps:
- Turn off lights when you leave the room and unplug any unused, non-essential appliances -- even appliances that are switched to off that are plugged in still use a certain amount of electricity.
- Take shorter showers and don't run the water needlessly while you are brushing your teeth.
- In the cold-weather months, lower your thermostat. According to the Alliance to Save Energy, you can save 5% off your heating bill for every degree you lower your home's temperature. And the opposite is true in the summer if you use air conditioners.
- Wash clothing in cold water and be sure to run only full loads of clothing and dishes in the washer. Make sure your dryer is set to the moisture sensor and not the timer
- Make sure your heating and cooling units are in good shape -- a yearly or every two years tune up might cost money, but in the long run they will save you.
Audit your grocery bill. In my house, a huge portion of our household spending goes towards grocery shopping. The amount that we spend can fluctuate too, depending on if it is the summer and the kids are home from school (and eating more) or if it's a birthday or a holiday and we are having company that needs to be fed. While using coupons certainly is helpful, there are plenty of other ways to save money in the supermarket without having the clip a thing. First off, make sure you have a savings card for whichever store you shop at. And read the circulars each week. Even if you don't need an non-perishable item, but it's something you use often and it's on sale, consider picking one up and keeping it in your pantry. When comparison shopping between brands (and brand loyalty isn't necessarily a good thing), pay attention to the unit price of the item. This is the price that shows how much you are paying per weight. A 16 ounce package of frozen corn might be cheaper at $1.29, but it might be worthwhile to spend $1.99 on the 32 ounce bag and freeze what you don't use. Planning your menu each week will also help you save money and cut down on impulse buying. (For more grocery store tips, click here.)
How much do you pay for fun every month? Do you rent a lot of movies through a mail-order service? Try the library where movies are free (as long as you return the on time). Same goes for books. Take advantage of "Discount Days" offered by many museums, zoos and art galleries that offer a reduced or even free admission. If you want to have a "date night" with your significant other, try having a "date afternoon" instead -- lunch portions at restaurants are often much less expensive and movie tickets are usually cheaper during the day. Explore memberships like AAA that not only provide a service, but offer discounts to many entertainment venues.
The key to reducing household expenses is to take a good, honest look at what you spend money on and see if there are ways to either spend less or eliminate the expense altogether.