You feel like you’ve cut your budget to the bone, yet you still aren’t saving or paying down debt as much as you want. Maybe you’re still struggling to make ends meet at all. However, you might not have cut as much out of your budget as you think. If you’re like many people, you’ve probably accepted certain expenses as unchangeable when the truth is you could save substantially more with a little investigation.
Review Your Insurance
You probably have the same car and homeowner’s insurance you’ve had for years, and you dutifully pay it without thinking too much more about it. In fact, you should spend a couple of hours each year when it’s time for renewals shopping around for lower rates. Call the companies and let them know you’re doing this. Some companies will offer a big discount if you bundle your insurance with them.
Talk to Your Creditors
Ideally, you won’t carry a credit card balance. If you do, you should be paying it down as fast as you can. However, did you know you might be able to lower your interest rate? If you have good credit and a good payment record with the company, give them a call and ask if they can lower your rate by a couple of percentage points. In many cases, they will agree to do so.
Use Credit Responsibly
Speaking of credit cards, although some financial planners advise to avoid them, if you’re someone who travels or eats out a lot, they can actually save you a lot of money. This is not the right tip for anyone for struggles with impulsive spending, but if you have a good handle on what you buy and when, look for cards that offer rewards. The trick here is not to spend money you wouldn’t ordinarily, either in a bid for points or as part of claiming your reward.
Moving and Refinancing Loans
If you get a credit card offer for zero interest on balance transfers for six months, it might be worth moving a high-interest card balance onto it although you should be aware of both annual fees and a very high interest rate once the six months are up. If you are paying off student loans, check with a private lender to see if they can offer you a more attractive payment plan. You might be able to cut back on your monthly payment. You could also look into refinancing your vehicle loan or your mortgage.
Take Big Steps
It’s worth considering whether it would be feasible to move to a less costly home, trade in your vehicle for something less expensive or switch your expensive smart phone contract for a cheap dumb phone one. For some people, steps like this are the right idea, but watch out for a false economy. For example, if your cheaper vehicle needs more maintenance or your lower rent payments are consumed by higher commuting costs, you might end up spending even more. Look at the big picture before you make the big leap.