5 Easy Ways to Cut Monthly Expenses

Ever notice how your monthly expenses always seem to equal whatever salary you’re making, even after you get raises? The phenomenon is called “lifestyle creep” and it can keep you from reaching all kinds of financial goals, from paying down debt, to saving for retirement. One way to get lifestyle creep under control is to have any future raises you get direct deposited into savings – like a 401(k) account through your employer, or an Individual Retirement Account (IRA). But here are five things you can do right now to cut your monthly expenses.

1. Make a Budget

The first step toward cutting expenses is to make a budget, so you know exactly where your money is going. Start with major categories, like rent or mortgage, utilities, transportation, meals, clothing, and entertainment. Hanscom FCU offers a free Money Management Planner download that includes worksheets to help you get started. Then break it down even further to ferret out items that are ripe for reducing. Many people, for example, are surprised to learn just how much they pay for pricey lattes and snacks from restaurants and vendors that would cost a fraction of that amount if they were made at home or purchased at a grocery store. To find these little expenses that fritter away your money, use this downloadable Fritter Finder for a week – and be amazed by what you discover!

2. Lower Your Mortgage Payment

The biggest monthly expense for many people is their home mortgage. If you haven’t examined that loan since you bought your home years ago, it’s quite possible that you could save a lot of money – both now and over the life the loan – if you refinance at a lower interest rate. To know whether refinancing makes sense, you’ll need to add what you’ll spend on closing costs into the calculation of your new monthly payment. Learn more here.

3. Get an Insurance Checkup

If you have a car, you absolutely must have car insurance. But it pays to shop around periodically to make sure you’re getting the best deal. If you have a decent emergency fund on hand in case of an accident, one way to lower your premiums is to increase your deductible. Also be sure to examine your policy for “extras” you may not need. For example, you could be paying for roadside assistance both through your insurance policy and through AAA.

4. Examine Your Auto-Payments

Putting your regular bills on auto-payment can be a really smart way to protect your credit rating by ensuring you’re never late with a payment. However, if auto-pay causes you to keep paying for items or services you don’t really need or use, it’s no bargain. A few common culprits include unused gym memberships, subscriptions to magazines that aren’t read, and cable or satellite TV plans that include loads of premium channels that are rarely watched.

5. Cut the Cord

If you’ve already ditched your land line, good for you! Over 50% of American adults live in households that are "wireless only" according to a recent survey If not, doing so is one of the quickest and most pain-free ways to trim your expenses. Most all of us have our cell phones with us all the time anyway. Another cord you might be able to cut to save money: cable and satellite, especially if you find yourself tuning in to YouTube, Netflix, Amazon Prime, and other subscription services instead. Why pay for programming you aren't watching?

Learn how to take control of your finances! A sound spending and savings plan is the foundation for your long-term financial success. You'll find the plan you need in our free Money Management Planner!