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Is your financial life falling into turmoil, and you are unsure how you can get back on track? Well, the most straightforward option left is cutting back on your household expenses and working with a thin budget. However, leading such a lifestyle is not easy for everyone. Nonetheless, if you want to improve your financial situation, you need to commit to practicing the principles highlighted below.
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- Write Down All Your Expenses on Paper
It would help if you were mindful of where you spend your money. So before you can come up with a clear plan of what you need to cut out, you should note down every bill you have on paper. This allows you to organize your thoughts better and develop a clear and detailed plan to follow. Ensure you include every payment you make and the total amount of money you need to settle your expenses and save up.
Do not hide any single bill since it will not be of any help. Laying out everything in the open allows you to analyze your financial position and have a clear view of what you need to do to make repairs to your personal finance.
- Cut Down Your Energy Bills
Among all of your expenses, you probably spend the most on your monthly energy bills. Did you know that most electrical devices still draw out electricity even when not in use? The first step you can take to save on your utility bill is unplugging any device you are currently not using.
But it takes more than just shutting down the devices that are not in use to conserve your energy. An ingenious way you can use that will not cost you anything includes making use of window shades of a lighter color. During warm weather, you can leave them closed to reflect the sun’s heat from your house.
You can also ease the burden on your refrigerator by storing food and beverages in closed containers. It helps to prevent the loss of moisture that would occur when uncovered. If you still use incandescent bulbs in your house, you should opt to replace them with more efficient options such as LED or CFL bulbs. Instead of relying on electricity, you can also switch to using non-renewable energy, such as an Iowa solar panel. An investment in solar energy allows you to save more on your electricity bill.
Moreover, you should put more use to natural light. If you work from home, you can position your desk next to a window to access free light.
- Save Money on Transportation
Believe it or not, your car is a money consuming pit that devours a big part of your monthly budget without offering an equal return in investment. From the moment you make a car purchase, its value reduces, and your expenses increase. You then have to deal with all sorts of payments, such as car loan interest, maintenance, insurance, and gas. According to AAA, you pay more than $6000 every year if you own a car.
You can reduce your overall expense by adopting public transportation, especially when commuting to work every day. The amount of money you may spend is a small fraction of the cost of owning your vehicle.
If you own a car, you can choose to sell it. By selling it, you can save on the money you would otherwise use to pay for your insurance. If you are lucky enough to sell it at market price, you can pay off any high-interest debt you have and beef up your savings.
You can also further reduce your expenses by taking the opportunity to share a ride with someone else, especially when heading to work.
- Save on the Use of Water
A faucet drip may cost you too much that you would imagine. It may not seem like much, but according to the American Water Works Association’s drip calculator, you may be losing more than 3,000 gallons of water in a year.
The leaks can further damage your home structure, resulting in thousands of dollars in repair costs. Rather than waiting for any problem to arise, you should solve any water leakage problems as soon as they occur. Further damage down the road may be extensive and costly.
Additionally, you should avoid taking long and steamy showers. If you have an old water heater, you may end up spending too much energy to keep things steamy. Learn to spend less time in a shower to reduce the amount of water you get to use. If your shower head continues to leak water hours after leaving the bathroom, make sure you replace it.
- Clean Your Dirty and Clogged A/C
Your central air conditioning unit has a significant stake in your monthly expenses. Everything is favorable when it runs without any problems. But your costs can take a sudden upward streak if you do not occasionally clean the appliance. When the air filter is dirty, and the A/C unit is clogged, you may have to spend more on electricity bills for their smooth operation.
The time it takes for the A/C unit to run in 24 hours can increase by 30 percent leading to an increase in your electricity bill by an extra $50 or more every month. You should therefore remember to call for the maintenance of your AC unit at least once or twice a year.
- Install Ceiling Fans
If you do not own a home fan, consider installing a ceiling fan. It can help you save as much as 40 percent during summer and 15 percent in winter. A ceiling fan can help get rid of excess heat in your house in summer by spinning counterclockwise. It is also a smart strategy for keeping your room warm during winter. When it spins in the clockwise direction, it pushes warm air downwards, helping trap heat in the house.
- Get Rid of Cable TV
As much as you enjoy watching television, your monthly bill on cable and satellite television could be too much compared to the value that you receive. With so many cheaper options in the market, such as Netflix and Hulu, you can still enjoy watching the same programs more affordably.
If you do not have time to watch TV, then it is an expense that you should avoid altogether. Moreover, having no television to keep you occupied at home can create more time for your family to interact.
- Add More Insulation
You may balk at the thought of having to spend more to reduce your expenses. But upgrading your attic insulation is a wise investment that can help you save on your home’s heating and cooling costs in the long run. According to the EPA, you can save as much as 15 percent in your heating and cooling costs when you insulate your house. If you live in a cold region, the savings increase by another 20 percent.
Apart from the above practices, there are several other ways you can save on your home bills. For example, you can save more by replacing eating out with cooking and eating at home. You can also cut costs on your food expense by practicing gardening.
Once you get control over your house bills, you can turn around your financial life for the better. Adopt the above practices and create a new budget that highlights your most basic requirements. It would help if you had enough discipline to ensure that you do not drift back to your previous spending habits.