Nehemiah, international photographer.
Putting him first since 2012.


5 easy ways to cut monthly expenses

If you've noticed that your monthly expenses always seem to equal what you're making each month, it might be time to make a change. Here are 5 easy ways to cut your monthly expenses and start saving money.

How to Cut Your Monthly Expenses


If your monthly expenses always seem to equal what you're bringing in each month, you're probably not able to start saving for important things like retirement, vacations, or emergency funds. 

If your expenses match what you're making even after a raise, you might be experiencing a phenomenon called "lifestyle creep."

Lifestyle creep happens when you increase your spending each month because you have more income coming in. It's a fairly common phenomenon, and one that can hurt your financial health. 

Lifestyle creep can prevent you from reaching all kinds of financial goals from paying down debt to saving for retirement. 

One way to prevent lifestyle creep is to move the extra income from raises directly to a savings account

If lifestyle creep isn't a problem for you, but you're still finding it hard to save each month, here are 5 simple things you can do to cut your monthly expenses.



1. Make a budget

The first step toward cutting expenses is to make a budget, so you know exactly where your money is going.

Start with major categories, like rent or mortgage, utilities, transportation, meals, clothing, and entertainment. 

Then break it down even further to find out items that are ripe for reducing. Many people, for example, are surprised to learn just how much they pay for pricey lattes, snacks, and impulse purchases.



2. Lower your mortgage payment

The biggest monthly expense for many people is their home mortgage.

If you haven’t examined that loan since you bought your home years ago, it’s quite possible that you could save a lot of money – both now and over the life of the loan – if you refinance at a lower interest rate.

To know whether refinancing makes sense, you’ll need to add what you’ll spend on closing costs into the calculation of your new monthly payment.



3. Get an insurance checkup

If you have a car, you absolutely must have car insurance. But it pays to shop around periodically to make sure you’re getting the best deal.

If you have a decent emergency fund on hand in case of an accident, one way to lower your premiums is to increase your deductible.

Also be sure to examine your policy for “extras” you may not need. For example, you could be paying for roadside assistance both through your insurance policy and through AAA.



4. Examine your auto-payments

Putting your regular bills on auto-payment can be a really smart way to protect your credit rating by ensuring you’re never late with a payment.

However, if auto-pay causes you to keep paying for items or services you don’t really need or use, it’s no bargain.

A few common culprits include unused gym memberships, subscriptions to magazines that aren’t read, and cable or satellite TV plans that include loads of premium channels that are rarely watched.



5. Cut the cord

If you’ve already ditched your land line, good for you! If not, doing so is one of the quickest and most pain-free ways to trim your expenses.

Most all of us have our cell phones with us all the time anyway, and if you really like the feel of a traditional phone in your hand, a VOIP (Voice Over Internet Protocol) plan that provides phone service over the Internet is a lot cheaper (free in some cases) than traditional land line service.



It's never too late

Even if you haven't been able to cut expenses in the past, don't worry! And don't give up!

It takes most people a few tries to find a budget that works for them and stick with it!

These 5 simple steps could help you cut some of your monthly expenses, so you can start saving for the important things in life. 

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