Sometimes after I go through the process of developing a spending plan with someone I’m working with I hear that they’re having trouble making ends meet. Sometimes they’re not able to save. Sometimes, they can’t even cover their monthly expenses or need help with budgeting. Sometimes, they’re not able to throw as much money as they’d like against their credit card bills or other debts. Other times they’re just feeling as if there isn’t enough money to give them any wiggle room.
This feeling of living paycheck-to-paycheck is very uncomfortable. It causes trouble in relationships (marriages are much stronger, research has shown, when you accumulate assets including savings rather than debts) and it causes individuals to feel stressed, anxious and sometimes even develop physical symptoms like headaches and insomnia.
One way to clean out your finances is by coming up with ways to reduce your monthly expenses bills to make ends meet and allow yourself to breathe. And cutting those bills you get month in and month out is a good place to start. I’m talking about phone, internet, wireless, insurance, etc. How?
Start with a bill audit. This week, pull out the last few months of those bills (or if you receive them electronically, look at them online) and really look at them. You’ll find add ons you didn’t know you were still paying for or services you no longer use. In my case, I found I was still paying for one channel on demand ($4.95 a month, close to $60 a year) though my teens stopped watching it years ago. And that’s just one example. If you only watch a premium channel half the year because your favorite show is in season, cancel it the other half.
Ask for a better deal. It’s worth your time to check in with your providers every six months or so and ask them if there are newer, better deals available. Doing this with your cell phone company can, for example, alert you to the fact that if you were using the friends-and-family option, which allows you free calls to ten people on your list (no matter who their carriers are), you could scale back and buy fewer minutes a month. You can do the same with your cable/television provider. When another provider came to my neighborhood, I used the sheer fact of more competition to get my current provider to lower my bill. It took a single call.
Finally, think about unbundling or going without a contract. Yes, in the past it’s often been cheapest to buy your communications services from one provider and to get a low cost phone by signing a one- or two-year contract. This is not always the case anymore. So shop around and look at as many alternatives as you can palate, then make the call that’s right for you.
Can you think of any ways to reduce your monthly expenses?