When it comes to paying bills each month, you probably are just hoping that more money is coming in instead of going out, but if I asked you how much your utilities were, how much you spend in food, or gas, would you be able to say? If you can free extra money each month you can start asking whether a 401k vs ira is better and really start building your nest egg for when you finally walk away from work and in to retirement.
Take a Look at All Expenses
A great way at taking a look at every dollar that is going out is taking last month’s credit or debit card statement and actually go line by line for each expense. You can take it a step further and put into two or three categories, which would be necessary monthly bills, purchase, and then the third could narrow down to those you probably could have avoided. Just for fun, add up that third category and see what you could have left in your bank account if you had been a little stricter with your spending.
See What You Can Cut Out First
Now that you have all of your expenses laid out you can start going through to see where the cuts can be had. Start with the small ones, like if you have a reoccurring newspaper or magazine subscription coming out. I know myself when the paper is delivered it goes right to the recycle bin, so why bother paying anymore. Next could be that gym membership that you continue to pay for every month but haven’t been since the start of summer last year when you may or may not have hit your beach season target weight.
Avoid Going Out to Eat
Once the easy cuts are made it can get a little more difficult and some sacrifices need to be made. When you were going through expenses, try adding up all of the times you went out to eat, whether that was grabbing coffee in the morning, getting lunch at work, or picking up carryout for dinner or taking the family out to eat. For a fraction of that you could go grocery shopping and prepare all of your meals and snacks at home, and yes, even coffee that you could have brewed and ready for your travel mug by the time you are heading out the door for work.
Cut the Cable Cord
The next expense may sting a bit at first, but when you are saving a couple hundred dollars a month you may not miss it anymore. If you really sit back and think about how much TV you watch that doesn’t involve flipping around, you could probably just as easily get away with an HD antenna to still get local news and network shows, but beyond that you could get a Netflix subscription for $10-15 a month and you can still catch up on all the best shows that you really want to watch.