Last week on my post about money, time and values, I talked about things that I do that would save me a few cents and take a lot of time. I still chose to do them because my values dictated it, however, if the main goal is to help you get more breathing room in your budget, this is where you should start.
Refinance your mortgage
This is the biggest one of all. If you are making efforts to save money, by cutting your grocery bill, or lowering the thermostat but haven’t looked for a cheaper mortgage rate, you are doing it wrong. A few hours of research could land you a better deal and save you thousands of dollars. Be aware that if you are late on your taxes there may be a tax lien on your house. You can check what is a tax lien and how it can affect you in the process.
Negotiate your debt
You can call your credit card providers and your bank to try to negotiate the interest rate on your debt. Explain why you think you deserve a discount, remain polite and calm, and there is a good chance you will get what you ask for. Know what the competition offers, and ask to talk to retentions. If you consider switching to a lower rate with someone else, your company will probably match it. You can use an online loan repayment calculator, or do the calculations yourself, debt consolidation can be an option as well, but only if you are serious about repaying your debt, and not taking more on with your newly acquired budget breathing room.
Reduce your bills
Review your expenses and try to compare prices to make sure you get the best deal on utilities, cable, and internet. Every year I call my internet provider and ask to be left on the half price discount. That 10 minutes phone call saves me $120. By doing that, I keep my broadband provider, which I am happy with, at a 50% discount. I am not changing my comfort, just the price I pay for the same service. You could be more drastic and opt for the low cost companies for an even bigger saving.
Organize your driving
Instead of taking the car out three times a day for a small errand, try to group all activities that require a car together. Get to the supermarket and the dry cleaner on your way to pick up the kids at school. Go to your gym class with your friend. If you can, give up a second car altogether. Getting rid of a car and insurance payment is the biggest win.
Consider your annualized expenses
If you have a regular habit, good or bad, such as drinking or getting expensive haircuts, consider the annual expense you are incurring. A $5 bottle of wine once a week won’t ruin you, but if you spend $100 per month on wine, that is $1,200 every year. Are you ready to own your decision or would you rather throw the $1,200 at your debt, or save them for a holiday?
By tackling the bigger items first, you can save thousands of dollars per year, with very few changes to your lifestyle.
What other big item can you think of to get more breathing room in your budget?