Greg Harmon, Executive Chronicles | It can be disappointing to see how much cash you actually have left to spend after taking out expenses and taxes from each paycheck. Though some costs are unavoidable, you’ll find plenty of small outlays that add up if you take a closer look at your budget. Try adjusting some of these expenses to increase the amount of discretionary income you have at your disposal.
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Everyone has to budget for groceries, but you might be spending more in this category than you realize. One of the most obvious culprits is eating out. Whether you swing by fast-food joints on the way home from work or order takeout a few times a week, dining out is expensive. Cook your own dishes at home instead. Also, prepare coffee and tea at home rather than getting cups from local cafes and coffee shops — the markup on these drinks is quite high.
You should also look at how much you’re spending at the grocery store. Many food items are far more expensive than other items you could pick from the shelves, like pre-cut and canned foods versus purchasing your own fruits, veggies, and other ingredients to prepare at home. Joining a warehouse club, such as Costco or Sam’s Club, can also help you save. Note that buying in bulk isn’t a good idea if the food will expire before you can prepare it. You should also go by the lowest cost per ounce for an item rather than the lowest sticker price.
If you have credit-card debt, a mortgage or car payment, or student loans, part of the money you pay every month pays down the capital, and part goes to cover interest. You can reduce the interest you must pay each month by paying down the total amount, but you can also look at options for securing better rates. A few strategies include:
- Transferring the balance: Taking out a new loan or credit card with a lower interest rate to pay for higher-interest debts can be an effective strategy.
- Consolidating loans: Do you have several high-interest loans? Consolidating those debts under one loan that offers a lower interest rate can help reduce your monthly expenses.
- Shopping around for the best rates: Before performing a balance transfer or consolidating debts, try refinancing your student loans and compare rates to ensure that you get the best deal possible.
If you commute to work or school every day, you likely have to set aside a good chunk of cash for gasoline. You can manage this expense, however, with some simple maintenance. For example, cleaning the air flow sensor, changing the air filter regularly, and keeping the tires properly inflated are a few tasks that will improve your vehicle’s gas mileage. Plus, these tasks are easy to do on your own, can be done in less than an hour, and are affordable. Good day-to-day maintenance will also help keep your vehicle out of the shop.
From food to gasoline, you’ll find plenty of expenses you can reduce with a few simple changes. If you’d like to have more disposable income at the end of each month, try out a few of the strategies outlined above.