How to Reduce Your Household Spending & Save More Money Than Ever
The holiday season has come to a close, and your bank account looks a little worse for wear. Fortunately, the New Year is the perfect time to rebound from holiday overspending with some money-saving resolutions. Here are a few practical tips for learning how to reduce household spending.
How to Lower your Household Expenses
Track Spending Habits
Before you can cut costs, you need to determine where your money is going. This means tracking your spending habits over the course of several weeks.
If you pay for everything using a debit or credit card, comb through your statements to analyze your spending. Looking at these numbers can be a huge eye-opener. Small splurges here and there add up. Who knew so much of your paycheck was going towards Amazon purchases or entertainment splurges?
While you might be surprised by how much you’ve spent on certain items, this process helps you determine which purchases are wants vs. needs. Check out expense tracker apps like Mint, Goodbudget, and You Need a Budget to get started.
Create a Household Budget
Once you know how much you’re spending, you can create a household budget (i.e., a plan for where your money will go moving forward).
Keep in mind, there’s no need to overcomplicate this step since you can make budget categories rather than spelling out every single purchase. Common household budget categories include things like: rent, food, transportation, utility bills, student loans, and insurance (car insurance, health insurance, etc.).
Anything that has a monthly payment (whether fixed or flexible) can be a category within your monthly budget. Creating a plan you can monitor and adjust is a great way to take charge of your personal finances so you can pay off debt in less time.
Use one of the previously mentioned expense tracker apps (i.e., Mint or Goodbudget) to build a budget. Or, make a copy of this personal monthly budget template from Google.
Lower Housing Costs
Housing costs (rent or mortgage) likely makes a big dent in your earnings. According to a report published by the U.S. Bureau of Labor Statistics (BLS), housing expenses increased by 5.6% just in the year 2021 alone. And that’s precisely why you should look at how to lower these costs.
Renters have a lot of options for saving money, like:
- Getting a roommate (or two)
- Letting go of a paid parking space
- Moving to a cheaper apartment
Alternatively, if you own your home, you can try:
- Refinancing to get a lower interest rate
- Removing private mortgage insurance
- Using an extra room as a short-term rental
- Renting out empty spaces in your home for other people’s storage (Check out websites like Stash or Store At My House)
If you’re able to implement any of these ideas into your current living situation, you can save a good amount of money (while still having a comfortable place to call home).
Cut Down on Electricity Usage
While utility bills should already be included in your monthly budget, your electricity usage is a big enough topic to mention on its own. Even though you have to heat/cool your home — and you need power to turn on your lights and other appliances — there are still tons of ways to lower your overall usage.
Some things you can do to reduce electricity usage are immediate:
- Not leaving your electronics plugged in when they’re not in use
- Not running the dishwasher unless it’s full
- Hanging up your laundry rather than using the dryer
Then there are other options that are almost as easy (but require an extra step or two):
- Switching to energy-efficient light bulbs
- Upgrading to energy-efficient appliances
- Installing a programmable thermostat
If this feels at all overwhelming, just remember that any effort to replace old appliances is sure to reduce your electric bills in both the short- and long-term.
Prep Your Meals for the Week
Preparing (and eating) meals at home can save you a lot of money. And thankfully, weekly meal planning makes this a whole lot easier, too. Look up recipes online or get inspiration from Pinterest, and then head to the grocery store with a set shopping list. This way, you grab the exact items you need and are less tempted to add all sorts of extras to your cart.
Even if you don’t have time to prepare meals during the work week, you can still cook something on the weekend (like soup or casserole) that’ll provide several meals for the next few days. Divide each portion into a container, freeze them, and you’ll have quick meals to heat up on a busy day. Convenient and cost-effective at the same time!
Cancel Unnecessary Subscriptions
Many people have several monthly subscriptions for things like cable, internet, streaming services, cell phones, supplements — you name it! Once you set up a subscription, you likely don’t think about it very much. And yet, that money keeps coming out of your account every month.
While canceling some subscriptions will save you money, first ask yourself:
- How much do I use this subscription?
- Do I really need to subscribe to this?
- Can I live without this subscription every month?
If any of your subscriptions turn out to be unnecessary or excessive, you can unsubscribe right away. Even unsubscribing to something small can help boost your budget. The journey of saving money begins with a single step, right?
Reduce Household Spending with Rent-A-Center
Do you have an old appliance contributing to your high energy bill? Rent-A-Center can help! We have all kinds of products and appliances to help you furnish your home on a budget. But the best part? Rent-A-Center also has flexible payment options and free repairs on all our rent-to-own items — so you can save even more money down the road.
So, what are you waiting for? Start the New Year on solid financial footing by shopping at your nearest Rent-A-Center location today!