Researchers tell us that by now, most people have already abandoned their New Year’s resolutions. If one of your resolutions was to spend less money in 2018, consider this a little nudge to “stick with it.”
Sure, it’s challenging to curb spending, especially with the many financial demands most people face. But if you stick to a solid plan, you can fulfill your resolution to cut spending this year. This, in turn, could lead to a less stressful new year and more money in your pocket this time next year.
5 Cost-Cutting Tips
There are many different ways to cut your spending. Here are a few ideas to get you started:
- Create a Budget
Lots of people cringe at the word “budget,” but budgeting isn’t as painful as it sounds. While it isn’t always easy, budgeting should be manageable for most people. It’s simply a matter of being aware of how much money is coming in to your household and how much is going out each month.
By creating a budget now, you’ll have a financial blueprint for the rest of the year that can help you cut spending. Practically speaking, budgeting is as simple as determining your monthly income and expenses and then subtracting the latter from the former. If the result is a positive number, you’re on the right track. If it’s a negative number, it’s time to get serious about cutting spending.
- Stop Wasting Money
Simply put, stop paying for services you don’t use or need. Cable TV is a good example: With a plethora of streaming services, many people are saving big bucks by ditching cable. If you’re watching more Netflix than cable TV, consider cutting the cord.
Streaming services are often less expensive than cable, have few or no commercials and feature content tailored to you. There are many different packages and plans to choose from, so pick the one that works best for you.
- Avoid Buying Deprecating Assets
Spending money on things that decline in value is one of the biggest financial mistakes many people make, which presents a great opportunity to cut spending. A good example of this is new cars. Automobiles start depreciating the minute they’re driven off the car lot, making new cars one of the most indulgent purchases many people make.
Instead of buying a new car, you can cut your spending by purchasing a quality, low-mileage used car. This strategy could reduce or even eliminate your monthly car payments. You can then save this extra money, invest it or maybe use it to pay off your mortgage early. You might even lower your car insurance premiums, cutting your monthly spending even more.
- Don’t Pay Bank Fees
Miscellaneous bank fees may seem small and insignificant, but they can really add up. Take checking account fees, for example, which can reach $15 a month or more. Most banks offer free checking accounts if you maintain a minimum balance or meet other requirements.
ATM fees are another bank fee you can easily avoid by simply using ATMs that are in your bank network. Scout your area and if your bank doesn’t provide enough convenient fee-free ATMs nearby, think about switching to one that does. This can make a big difference in your monthly spending.
- Don’t Overcharge Just to Get More Rewards
You probably carry one or more credit cards that offer rewards, whether airline miles, cash back or statement credits. While these rewards are an incentive to use your credit card to make purchases, you must be careful not to overspend just to rack up rewards.
One way to cut spending is to start making most or all of your purchases with cash. You won’t get any rewards, but handing over physical currency instead of just swiping or inserting a card makes many people think twice before buying things they might not really need.
Resolve to Cut Spending Now
It’s never too late to resolve to be smart with your money and cut down on your spending. By implementing these and other cost-cutting ideas now, you can lay the groundwork for a more prosperous year to come.
Please contact us if you have more questions about these and other strategies for cutting spending in 2018.