When it comes to handling your finances, it may seem like you have to make tradeoffs. This philosophy may be true, but you can still have fun while doing it. Here are some of the techniques that will help you to reduce your annual expenses without impacting your lifestyle.
Bundle Services
Bundling your services is one solution when it comes to how much it costs you for those same items. This could mean that you receive a discount on your car, home, or renters’ insurance. Another common practice for utilities is to offer a discounted rate for when you bundle things like Internet and cell phone plans. Make sure that you need the services that are being offered so that you aren’t spending more on a monthly basis than you would have been without the plan.
Eliminate Debt
Having debt means that you’re paying interest on it. Working to eliminate your debt is a good way to stop those interest payments. For example, reducing your credit card usage or only spending as much as you can afford each month stops this destructive cycle. Your home is another source for which your interest payments start to add up. Focusing on eliminating your debt will save you a ton of money over the life of your anticipated loan. One of the best ways to eliminate debt is called the “Debt Snowball” although there are several variations the easiest method involves paying off the smallest debt you have first. So if you have 3 credit card debts of $1000, $2000 and $3000. And you are currently paying $100, $200 and $300 a month on each. You take every extra penny you have and put it toward the $1000 debt. When it is paid off you take the $100 that you were paying on the first debt and put it towards the second debt. So now you are putting $300 toward the $2000 debt (plus every extra penny you can find) and before you know it the second debt will be paid off. Then you are able to put $300 extra toward paying off the final debt.
Unload Frivolous Expenses
Frivolous expenses can include a variety of items. This could mean that you stop and get a morning coffee at Starbucks, or eat out several meals a week. Also look at any monthly subscriptions whether they are games, movie channels, or old fashioned magazines. Another common expense that falls into this category is your timeshare maintenance fees. Timeshare selling will reduce the amount of money that you’re throwing away each year. All of these little things can add up and could be put to better use for eliminating your debt load or saving for retirement.
Purchase Smarter
Waiting to buy the latest flash in the pan could save you a lot of money. This is because it may come down in price or you may be able to find it on the used market. Another way that waiting helps you is that you can make a better-informed decision about the item in question. You may find that it wasn’t all that you thought it was or that it went out of style very quickly. Making an informed decision and thinking about the bottom-line will work to your financial benefit.
Limiting your expenses doesn’t mean that you aren’t allowed to buy things or have fun. Use these tips so that you can work towards your goal of reducing your expenditures.
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