Living on a budget can be challenging – especially when you have a slew of fixed expenses that you have little control over.
Between rent, a mortgage, insurance payments, utility bills, phone bills and car payments, fixed expenses can quickly seem like they are piling up. In fact, according to the U.S. Department of Labor’s annual Consumer Expenditure Survey, roughly two-thirds of the average American family’s household spending is for basic necessities, as opposed to discretionary expenses.
While we often focus on variable expenses to reduce expenditures and save money, sometimes fixed expenses can be cut, too!
Here are five ways to reduce your fixed monthly expenses.
1. Review your current expenses.
Take a close look at the last six months of your fixed expenses. Analyze the existing services you are paying for and determine if you are truly using those services or if you can make adjustments. For example – look at your cell phone bill and determine how many minutes and texts you are using. If it’s significantly lower than what you’re paying for, perhaps you can switch to a lower plan.
2. Don’t get too attached to one vendor.
If you’ve been buying car insurance from the same vendor for the past 10-20 years then it may be time to see what else is out there. While it’s certainly easier to remain with the same company year after year, it can pay off to do some competitive shopping. This is especially the case for car or home insurance policies. Who knows – you could end up saving a lot of money every month!
3. Identify ways to bundle services.
Bundling services – such as your cable and Internet, or car insurance and homeowners insurance – can often lead to reduced costs. However, make sure you fully understand the policies that go with bundled services before you make the switch. It can be tricky and can even sometimes end up costing more.
4. Eliminate things you don’t need.
This is an obvious approach to reducing your costs. However, it’s not a bad idea to ask yourself once in a while if you really need the premium channels in your cable lineup that you rarely watch. If you can take certain charges off your monthly bill – especially if you have add-ons that you rarely use – it can reduce your monthly bill dramatically over the long run.
5. Ask for a better deal.
Finally, consider asking your service provider for a better deal. There may be discounts or promotions you can qualify for. Likewise, you may be able to find ways to make adjustments to your plan that will reduce payments. It never hurts to ask!