Whether you are fresh out of college and just landed your first job or if you have been working for quite some time now, the one thing that you cannot get away with is not paying your monthly bills. If you’re single, you would have to pay for your rent, food, car, gas, credit card bills, phone bills, utility bills and insurance premiums.
If you are raising kids, you would have to add the kid’s tuition fees, clothes and other expenses to the list. It’s also recommended that you save money for your retirement fund or the kid’s college fund so that you won’t have to scramble for these expenses in the future. If you’re an average earner, how are you supposed to pay for all these?
It’s all about managing your finances well and living within or below your means. Let’s say that you are a married couple with three kids. Both you and your spouse are earning, and you have a small business on the side that is also earning extra income for the family. In order to make an effective monthly budget, you need to add all the income coming into the house. Set aside this figure for a minute.
Next, make as detailed a list as possible of all the monthly bills that you are paying for: credit cards, utilities, insurance premiums, amortization, car loans, premiums for the kid’s college education and your retirement fund. Add to this the other expenses in maintaining the household, your food budget for the month and your clothing allowance.
When you subtract the overall expenses from the total income, how much is left? If there’s quite a lot, it means that you are living within your budget and you have some funds left to maybe put into a savings account. If the resulting figure is negative or zero, it means that you need to make certain adjustments so you can stop living on a paycheck-to-paycheck basis.
The best way to slash off your monthly budget is to look for ways to save on your utility bills which you are probably spending a fortune on right now. In the next section, we will take a look at how you can save money on your monthly expenses on a bill-to-bill basis.
Ways to Save Money on Your Individual Monthly Bills
As years go by, the amount that you are paying for everything – from food to utility bills – unfortunately increase. There’s nothing you can do about inflation but what you can control is your actual spending. This way, your earnings can suitably pay for all your daily needs and monthly expenses.
Now, if you would like to cut back on your individual monthly bills, here are a few suggestions on how you can slash the price depending on which bill you have to pay:
For your mobile phone or wireless subscription
Even teenage kids find a mobile phone to be a necessity these days, which adds up to the overall expenses that you have to allot money for.
If you’re a parent who is looking for basic mobile phone service for your teenage kid, look for package plans that will let you pay for two mobile phone subscriptions per month. Ask your wireless carrier what your options are – when you buy any plan in twos or threes, you will usually be given a discount or additional perks.
If you are looking for individual plans, make a comparison of the rates offered by different phone carriers. Those who like owning a different model of a smartphone or mobile phone on a regular basis may want to look at plans which already include the handset. These will typically tie you down on a one-year or two-year contract, but you do get the handset for free.
You can go online to make a side-by-side comparison of the plan inclusions, rates and mobile phone models offered by different carriers. The ideal plan for you depends on whether you are a frequent caller, if you always send out text messages instead of calling, or if you are a heavy data user.
To check on your individual data usage, check out Android apps like My Data Manager or iOS apps like My Data Usage. These applications will let you know how much data you actually use – so that you can compare that with the data cap offered by wireless carriers. Let’s say that you only use 2 to 5 GB of data per month but your plan lets you use up to 10 GB of data, you may want to downgrade to a cheaper plan.
If your purpose for buying a mobile phone is to simply have a way for people to get in touch with you and you’re not really a heavy phone user, the most basic and cheapest calling plan should do.
For your home’s utility bills
If you have a big house, you might be spending a lot on utility bills. A good way to save money on this monthly bill is to make sure that you have an efficient home heating and cooling system. To maintain a comfortable temperature inside the house during summer and winter, the air conditioning unit or the heater needs to operate effectively.
To make sure that no draft comes in during winter or no cooled air escapes during summer, make sure to seal all the gaps between the ceiling and the walls. Use heavy drapes on rooms which you frequently use. During the summer, only use heat-generating electrical appliances at night.
Get rid of phantom electricity by turning off appliances when they are not in use instead of simply putting them on standby. Use a programmable thermostat and adjust it by a few degrees during summer; then down one or two degrees during the winter.
Even this simple act can save you a lot of money on utility bills. When doing household chores like washing the dishes or cleaning dirty laundry, only run the machine when it’s on full load. Not only will you save energy this way, but also water and detergent. Finally, make use of energy-efficient light bulbs and appliances whenever they need replacement.
For your water bills
Apartment dwellers usually do not have to worry about paying water bills because they are usually included in the lease. However, if you are receiving a water bill every month, there are plenty of ways that you can cut back on your water usage. This includes installing low-flow toilets, showers and other water fixtures.
If you don’t want to spend a lot of money on hiring the services of a plumber, make sure to always check for minor leaks and address them before they get worse. Cut back your shower time in half and when brushing your teeth, make sure that the tap is off. Teach your kids these water-saving tricks as well so that everyone can do their share in lowering your monthly water bills.
For your entertainment expenses at home
If you are still using your landline phone, ask a service provider if you can bundle this up with Internet and cable or satellite. Most people actually live with only Internet service – effectively ditching their cable and landline phone bills.
This is because there are plenty of online services that allow you to place calls for free, watch streaming shows on cable, and do pretty much everything that you are paying your land line phone company and cable service provider to do.
For your insurance premiums
Paying for insurance plans in the first place allows you to prepare for those unexpected events. Health insurance, car insurance and life insurance are necessary if you are the main financial provider in the family. To save money, you may want to check on umbrella packages so you can get discounted rates on different insurance plans from the same provider.
It also pays to review your insurance plans every year – because the competition is stiff enough in the industry that there should be an insurance provider who’s more than willing to offer you what you are getting for the same price or even lower.
If you haven’t switched insurance providers for years, do not hesitate to ask for a discount. Otherwise, switch to a lower-priced plan with another provider but make sure that the comprehensiveness of the coverage will not suffer.
For your credit card bills
Ideally, credit cards should only be used for emergency purposes. If you must swipe that piece of plastic on the cash register, make sure that you can pay for the full amount of the purchases. Otherwise, you would have to pay for interest and lots of extra charges. Worse, you can easily fall into a debt trap where you keep on using money that you haven’t earned yet – which is a big no-no if you want to manage your finances properly.
For your grocery and other expenses
Naturally, you need to put food on the table but the amount of money you’re spending on groceries may vary each month. For instance, your grocery expenses will definitely increase once the kids are out of school during their summer break because they are always taking their meals at home.
For this, you will save a lot of money by preparing a weekly menu. You can also slash your grocery bills by taking advantage of coupons, membership cards and online discount vouchers.