Is your budget looking a little bloated? If so, it could probably stand to slim down.
Financially, it’s hard to argue with the prospect. But it’s easier said than done—a “no pain, no gain” kind of situation, isn’t it?
Trimming a budget isn’t a zero-sum game. With a little creativity, you can find a few expenses that can either be reduced or completely eliminated without adversely affecting your quality of life. Some could even be staring you in the face right now.
The following list of common household expenses is particularly easy—although not effortless—to control. See how many apply to you—then get to work.
Household Expenses You Can Trim or Eliminate
1. Cable Television
Cable is a common—and increasingly unnecessary—household expense.
Many markets are dominated by one or two cable providers that can charge practically any amount they desire. If you have a double- or triple-play bundle combining cable, Internet, and phone, you’re likely paying more than $100 per month. You can dramatically reduce that outlay simply by paying for Internet, or by choosing an even cheaper Internet option from a municipal utility, local telecom, or next-gen service such as Google Fiber.
You don’t have to forswear digital video altogether, of course. On-demand streaming services such as Netflix and Amazon Prime make thousands of movies and television shows, not to mention a slew of miscellaneous archived content, available for flat monthly fees—usually around $10 per month, depending on the service and package. Cable-like streaming services such as Sling TV partially replicate the cable bundle at lower prices—approximately $20 to $40 per month for that product, depending on the package.
2. Magazine Subscriptions
Low-quality online content is cheap (or free) these days, but it still pays to pay for the good stuff. But do you really have to shell out $100 per year for a “New Yorker” subscription?
Not anymore. If you’re partial to just one or two titles, look for online-only or longtime-subscriber deals that can slash subscription prices by 50% or more. If you have a surfeit of airline miles or hotel loyalty points, consider swapping them for your subscriptions at no out-of-pocket cost. If your appetite for long-form writing and glossy pictures is greater, look to a digital magazine subscription bundle such as Texture, which offers online (and Kindle) access to hundreds of popular titles for a flat monthly fee of less than $10.
Whichever option you choose, rest easy—you can safely ignore all that “renew your subscription” junk mail going forward.
3. Heating and Cooling
No, you don’t have to turn the thermostat down to 60 and put on a second sweater. (No one’s stopping you though!) You just need to put on your DIY hat.
Start by air-sealing your windows and doors with construction-appropriate weather stripping. If you’re overwhelmed by your weather stripping options, refer to the handy ‘This Old House’ guide.
For a more ambitious approach that will save you even more cash, you can caulk and weather strip your entire home. That includes major loss points, such as door frames and seemingly inconsequential seeps, like those around electrical sockets and exterior spigots. According to the U.S. Department of Energy, you can expect this fairly straightforward project to cost no more than $30 and reduce your home energy use—heating and cooling—by up to 20%. On an annual heating bill of $800, that’s $160 in savings.
Air sealing works best with an assist from your thermostat. If your home doesn’t already have one, get a programmable thermostat for as little as $40, then program it to deliver less heat overnight and during the day, when the house is inactive or unoccupied.
4. Household Water
Household water prices vary significantly by region. They’re typically higher in drier areas and larger cities, and lower in wetter climates and smaller communities. Depending on where you live, you could pay anywhere from $2 or $3 per 100 cubic feet (CCF, roughly 750 gallons) to upwards of $10 per CCF. (If your home has well water, you don’t pay directly for water, though you undoubtedly pay to keep your system in operational condition.)
You can reduce your home’s water consumption in many ways. For example, if you shorten your showers by two minutes, you can save up to five gallons of water per wash, assuming a 2.5-gallon-per-minute flow rate (per the Department of Energy). By running only full loads of laundry, you can probably save a load or two per week, depending on your household’s size and washing needs—anywhere from 50 to 100 gallons. By watering your garden or lawn at night to reduce evaporation, you’ll save hundreds of gallons per month.
You can also tackle a simple DIY project: insulating your water pipes. Pipe insulation doesn’t reduce water consumption, but it does lighten the load on your water heater. According to the Department of Energy, proper pipe insulation can reduce your home’s energy use (gas or electricity, depending on your water heater type) by 3% to 4% annually, at an upfront cost of $10 to $15.
5. Drinking Water
If you live in an older home, you have every right to be concerned about the quality of your drinking water. Many homes built before the mid-20th century have lead service pipes, which can leach unsafe amounts of the metal into household drinking water supplies under the right circumstances—as infamously happened in Flint, Michigan, earlier this decade.
So what’s a concerned homeowner or apartment-dweller to do? Some turn to bottled water, but that approach has its own drawbacks—namely, it’s expensive and environmentally unfriendly.
In-home filtration systems are more eco-friendly and, in the long run, cheaper than bottled water. A quick look at The Home Depot’s under-sink filtration options reveals a handful of options between $100 and $200. Assuming a bulk-bought bottled water cost of $0.50 per 16-ounce bottle, such systems pay for themselves after dispensing the equivalent of 200 to 400 bottles.
If you’re on the road a lot, avoid bringing your own plastic bottles from home or paying steep markup for bottles purchased on the road. Grab a sturdy metal or BPA-free reusable plastic bottle for less than $10 online or at your local sporting goods retailer instead.
If your home has electric heat, you can substantially reduce your electricity bill simply by following the heat-miser tips above.
But even if that’s the case, and especially if not, there’s plenty more you can do to reduce your electricity expenses. Start by replacing burned-out incandescent light bulbs with LEDs, which are slightly more efficient and a lot more environmentally friendly than CFLs (which contain mercury). According to the Department of Energy, swapping incandescent bulbs for LEDs can reduce your lighting costs by up to 80%.
Major household appliances can be major electricity hogs, too. For instance, it might seem economical to keep the perfectly functional (if loud) fridge that’s served your family for 20 years, but an efficient replacement will likely pay for itself faster than you think—in as few as five years, in some cases. If you’re willing to do a little legwork to find accurate numbers, you can estimate your savings with this handy ENERGY STAR refrigerator savings calculator. The same logic applies to other large appliances: dishwashers, laundry machines, electric ranges, and especially clothing dryers.
7. Dining Out
Dining out is the archetypal discretionary spending category. You don’t need to eat any meals outside the house, and restaurant meals are almost always more expensive than their home-cooked counterparts. So, as a rational economic actor, why should you eat out?
Let’s sidestep that question for now. Assuming eating out is a positive, normal human activity, there’s much foodies can do to control their restaurant spending. Forgo that glass of wine (or bring your own bottle, if allowed). Split an appetizer and entree. Go vegetarian. Try the salad. Order cheaper entrees. Avoid fine dining and create your own ambiance. The possibilities are virtually endless—and far less inconvenient than you think.
8. Gyms and Health Clubs
Do you belong to a gym or fitness club? Paying a monthly fee—$30, $50, $100, or even more, depending on the club’s amenities and your member privileges—to use fancy exercise machines probably motivates you to exercise more often (however grudgingly) than you normally would. But is it really worthwhile?
Maybe. Maybe not. With a little extra self-motivation, you can probably replace the aerobic exercise you’d do at your gym with a combination of street and trail running, cycling, and in-home aerobics. If strength training is a priority, invest in free weights, kettle balls, simple resistance machines, and other in-home aids.
If you can’t (or don’t want to) exercise outdoors year-round, and you find self-guided aerobics to be boring, spring for a home exercise machine that aligns with your goals. According to Consumer Reports, high-quality treadmills cost at least $900 new—but, if you’re paying $50 per month to run on a gym treadmill, you’ll offset that outlay in a year and a half.
9. Car Insurance
Car insurance can be a major financial headache, especially if your driving record isn’t perfect or you have younger drivers on your policy.
Long-term, the best way to reduce car insurance costs is simply to avoid tickets and at-fault accidents, which of course is easier said than done. It can take years for accidents and tickets to drop off your record altogether, and loyal customer discounts build over comparable time-frames.
In the interim, use the insurance industry’s competitiveness to your advantage. Every year, shop around for better deals—they’re often out there, and sometimes worth hundreds of dollars per year. Likewise, look out for new discounts and deals, such as monitoring devices that confer deep premium discounts (on the order of 20% to 30%) for verified safe driving habits. And embrace bundle discounts that cut your total premiums when you combine auto insurance, home or renters’ insurance, and other types of protection.
10. Credit Card Interest
All other things being equal, it’s best to avoid running a credit card balance. Relative to other forms of credit, especially secured instruments such as mortgages and auto loans, credit cards charge very high interest rates—often north of 15% APR, and sometimes above 20% APR. For every $1,000 in carried balances, that’s $150 to $200 per year.
Credit card debt can happen though. Perhaps you had no choice but to put an unexpected auto repair or medical bill on your credit card, or you took advantage of a 0% APR purchase promotion and failed to pay off your balance before the regular rate kicked in. However it arose, credit card debt demands your attention.
There are plenty of effective strategies for paying off credit card debt. If you can maintain the proper discipline, one particularly effective tactic is to execute a balance transfer by applying for a new credit card with a 0% APR balance transfer promotion, transferring your existing card’s balance to the new card for a modest fee, and methodically making payments until the balance is gone—ideally, before the new card’s regular APR kicks in, a period that can last anywhere from 6 to 21 months. You can also use certain apps to help you get a handle on responsibly using your credit cards. Debitize, for example, allows you to use your credit cards like debit cards, which can take away some of the risk of going in to debt.
Use Those New Savings for Good—Or Treat Yourself
The best part about trimming your household’s budget is deciding what to do with all the money you’ve saved. Depending on your personal situation, you can try some or all of the following:
- Save For a Rainy Day. You never know what the future holds. To protect against unexpected big-ticket expenses and events, such as a long hospital stay or a lost job, it’s advisable to have at least three months’ income in reserve—and preferably six months’ or more. You don’t have to build your rainy day fund all at once—each month, simply deposit a portion of your budget-trimming savings, or allocate a fixed sum that you know you can afford.
- Save for the Future. Is your rainy day fund set? Look further ahead. Even if you have an employer-sponsored retirement account, consider opening an individual traditional or Roth IRA, both of which have tax advantages that protect more of your hard-earned money.
- Start an Education Fund. Worried about paying for college? No matter how old your kids are, it’s never too early to start an education savings fund. Popular options include 529 college savings plans and Coverdell ESAs. Each has unique advantages and drawbacks, and it’s best to consult a financial advisor (or at least do your own due diligence) before choosing.
- Pay Down High-Interest Debt. Credit card debt isn’t the only high-interest drag on your financial independence. Other common types include medical bills, unsecured personal loans, and even older mortgages taken out before interest rates fell through the floor. Approach them with the same fortitude you show your outstanding credit card balances. And, if you have a high-interest mortgage, consider refinancing to a lower rate.
- Reward Yourself. Saving is more fun when it comes with a tangible reward. Pay yourself back with a periodic “frugality gift”—a nice restaurant meal, a stylish new outfit, or a weekend getaway with your partner. Does it count as saving if you’re just stocking up for a splurge? That’s for you to say.
Depending on how you categorize your spending, your household budget probably has several dozen line items. That means plenty of room for trimming and tightening beyond what’s mentioned here. Remember, you don’t have to have a crystal-clear vision for what your frugal crusade will look like before it begins. You just have to get started and trust your instincts to guide you well.
What other expenses do you believe are easy to reduce or eliminate?
About Roger Arton
Roger Arton is an extreme-couponing king who’s diversified his savings strategies to the point of living comfortably-but-frugally year-round.