2020 Savings: 10 Ways to Cut Expenses

January 14, 2020

How to cut expenses

The start of the new year is a great time to cut back on spending and set financial goals for the future. One of the best ways to save money is to change your actual spending habits. There are various ways to reduce expenses and save more money throughout the year. Here are 10 ways we recommend cutting back on spending to start your new year off right.

1. Track your finances

The first step to reducing your expenses is to take a comprehensive look at your spending habits. Figure out where most of your monthly budget goes to find areas where you can save. Everyone’s situation and spending habits are different so closely examining yours is the best way to start saving. Once you have the whole picture of your monthly expenses mapped out, you can determine areas where you’re overspending and opportunities to cut back.

2. Cook at home

Though you’ve probably heard this advice before it’s worth repeating; you will save money by bringing lunch instead of eating out. Eating out every day is much more expensive than packing a lunch and other seemingly small expenses like coffee can add up quickly. Instead of going out to dinner, make a nice meal at home. Limit the takeout orders and learn new recipes at home for less.

3. Meal plan and prep

Similar to our last tip, planning and prepping your meals will ensure maximum efficiency from home cooking. Going into the grocery store without a plan can lead to unnecessary food purchases and food that spoils without getting eaten. Make a specific grocery list with your week’s meals in mind so that you have everything you need and don’t overspend on items you don’t need. With your meals planned out, you’ll know exactly what to cook and be less likely to go out.

4. Be electricity cautious

Become more electricity-aware and make sure you’re turning off lights and unplugging appliances when they are not needed or in use. Leaving lights on when you aren’t using them is not only wasting energy but wasting your money as well. It’s better for the environment and your wallet to turn the lights off.

5. Install energy-efficient lightbulbs

Another thing to consider is installing energy-efficient lightbulbs so that when you do use your lights, they require less energy. These are not only good for the environment but can save you money over time. Saving a few cents here and there can add up, especially on a utility you use every day.

6. Lower your water heater temperature

Hot water is a major energy cost in most homes, accounting for around 14% of your monthly bill. Most of the time the temperature is set higher than you would need it, meaning you are using more energy than you need to. Drop your temperatures to around 125-130 degrees Fahrenheit and consider insulating your water heater with a water heater blanket to retain more heat. If your hot water pipes are exposed, insulate those as well.

7. Cut back on smoking or drinking

A daily smoking habit is expensive as well as bad for your health. Reducing the packs of cigarettes you buy will leave you money you can spend elsewhere or put into your savings. Drinking can also be an expensive habit, especially if you go out for drinks at bars and restaurants. Cut back on your weekly alcohol consumption or enjoy a bottle of wine at home instead to save money.

8. Ditch Uber

Uber rides add up and can become a large monthly expense if you’re not careful. Of course, there is no price for getting home safely, but if you can walk or take public transportation safely instead, you’ll save yourself a lot of money over time. Get into the habit of taking public transportation or walking – even if it means you have to leave a little earlier.

9. Cut the clutter

Go through your home and set aside any clothes, items, or furniture you no longer want or need. You can make extra cash by selling your unwanted items on Craigslist, Facebook Marketplace, or other local listings. Parring down your closet means you are minimalizing your wardrobe, which can actually lessen the urge to buy new clothes. When you’re overwhelmed with options, you tend to stick to the same few outfits. However, having fewer clothes means you are more likely to get creative with how you wear individual pieces.

10. Switch to store brand

When deciding between name brand and generic, make the switch to the cheaper one, especially with cleaners, over the counter medications, and cooking ingredients. The store-brand items are of the same quality, you just aren’t paying extra for the name.

 

Looking for more money-saving tips? Don’t forget to check out our blog for more answers concerning retirement, debt, and tips to maximize your money.

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