Most of us work very hard and earn enough money to pay our bills, and maybe even have a little left over. So, cash flow and related financial issues are often a function of too much money going out rather than not enough coming in.
Likewise, most of us know about the importance of budgeting to lower our expenses, or at least manage them more proactively. But rather than give a responsibility lecture that most of us have already heard, we think it’s a better idea to empower you and enable you to trim your expenses each and every month.
Reduce Credit Card Interest Payments
Average credit card interest has remained relatively constant over the past ten years at around 18 percent, even though the prime lending rate has gone down over that same period. In other words, credit card interest rates are very high and not likely to come down anytime soon, if at all.
Nevertheless, it is still possible to reduce this huge monthly expense, because you can get help with a debt consolidation loan with a better rate. Even a two or three-point reduction will most likely result in hundreds of dollars of savings per year, and that money can make a big difference to families who are living on very tight margins.
While a debt consolidation loan is almost a sure fire way to save money, it’s best to tread lightly with regard to generic or off-brand petrol or groceries. Not all these consumer alternatives are created equal, particularly in terms of quality.
However, if you find a source that provides quality consumer goods and your family consumes them at the same rate as more popular brands, generics can substantially trim expenses, especially over time.
Trim Energy Costs
Some of these ideas require a small upfront investment, but they will cost more than what you pay for themselves over time, due to the substantial savings they bring:
- Turning the thermostat up or down during the day when no one is home reduces monthly heating and cooling costs by up to 15 percent.
- Although energy-efficient light bulbs cost a little more than standard bulbs, they use less energy and may last ten times as long.
- Reduce your water heater to 55 degrees. That’s still hot enough to kill germs. Moreover, wash clothes in cold water.
Some small changes on the road will yield big savings as well. The biggest thing is drive the speed limit in order to maximize fuel efficiency.
Watch Banking Fees
In the wake of the financial crisis, many banks stopped offering free checking accounts, so it’s necessary to shop around to find the best deal. Once you find a bank, be faithful. The average ATM fee for non-account holders is $2.77, and those nickels and dimes very quickly add up to quarters and dollars.
Furthermore, pay cash as much as possible. Such a move not only eliminates the possibility of overdraft fees, but also helps you budget your money.
Believe it or not, it is possible to legally reduce the amount of taxes that you owe. Many people overlook key tax credits, perhaps because another household member qualifies for the credit instead of the taxpayer. Similar to energy reduction, a visit to a tax preparer in the spring could more than pay for itself in terms of a lower obligation.
Small, incremental changes like these are the best way to make a big difference in your bottom line.