While looking at your budget you may feel at a loss of how to cut down your spending. You’re not alone in this, and with our help you can find some solutions to cutting down your spending.
Where Americans Spend Their Money
Looking at where the typical American spends their money may help you to see some areas you can cut down in. CNN Money has a helpful tool that shows the breakdown of spending by category; you can filter this by year, income, or age to see how you measure up to other Americans. Unsurprisingly, the biggest expense is housing costs, followed by transportation and food.
Large Area Cost Cutting
One of the easiest ways to trim your spending is by cutting your large costs by a little bit. Trent Hamm on The Simple Dollar gives 40 Ways to Cut monthly expenses,1 a lot of which focus on the top categories of housing and transportation. One big cost-saving tip, if possible, is to use public transportation instead of owning a vehicle; Hamm mentions that AAA claims car ownership costs over $8,600 a year for car payments, insurance, gas, and maintenance costs. If you can cut those expenses out of your budget, money will be freed up for other items.
There’s also several great ways to cut down on energy bills. From unplugging electrical outlets, which stops vampire energy2 (energy used even when a device isn’t in use), to switching out your light bulbs3 for more energy efficient ones, there are many cost cutting measures you can take. All these small measures can add up to significant savings that don’t take too much effort to do. Another thing you can do is to lower the temperature on your hot water heater since it accounts for 14 percent of the average home’s energy costs, according to Hamm. Unless you are constantly running out of hot water, chances are you don’t need it as high as it is. Look at Hamm’s other tips to find areas you can cut your spending in housing, transportation, and even entertainment.
Smaller Area Cost Cutting
Entertainment, although smaller than some of the other categories, still takes a big chunk out of the average American’s money. Entertainment is necessary in life, and shouldn’t be cut, but instead of looking to expensive entertainment options look at cost effective ways to have fun. Don’t buy books–rent them from a library; WorldCat lets you look up libraries by your zip code so you can find one that’s close to you! Renting instead of buying books and movies can save a significant amount of money. Doing a movie night in instead of going to see the latest movie is a fantastic option! Wait a few months for a movie to be available to rent and spend only a couple dollars total instead of the typical $10-20 price for each movie ticket. Canceling your cable subscription and going with cheaper alternatives like Netflix can save a large amount of money. Since many things can be streamed online through services like Netflix and Hulu, or for free a few days after the original air date through a TV channel’s website or app, keeping a cable subscription can be an unnecessary cost. Alternatively, if you’re looking to reduce entertainment costs outside of those areas, take a look at this list of 50 Cheap, Creative Ways to Have Fun4 including at-home karaoke, ugly cake contests, and geocaching.
Never be discouraged if you feel like there is no way to slim down your spending more than you already have. With creativity, you can always find an area you can cut costs, even if it’s something as simple as unplugging cords to save on your energy bill!
The views expressed by the articles and sites linked in this post do not necessarily reflect the opinions and policies of Cash Central or Community Choice Financial®.
1Hamm, Trent. (2020, Mar 2). Retrieved from: https://www.thesimpledollar.com/save-money/trimming-the-fat-forty-ways-to-reduce-your-monthly-required-spending/?pr=1
2Lamb, Robert. Retrieved from: https://electronics.howstuffworks.com/everyday-tech/vampire-power.htm
3NOPEC. (2019, Apr 11). Retrieved from: https://www.nopec.org/blognewsroom/blog/comparing-led-vs-cfl-vs-incandescent-light-bulbs
4Deschene, Lori. Retrieved from: https://tinybuddha.com/blog/50-creative-cheap-ways-to-have-fun/