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When trying to save money, many of us make small cuts to our spending such as eating less takeout meals or vowing to buy less clothes. While you may be able to save a few dollars here and there by doing this, it often takes much bigger cutbacks in order to save money faster.
These cutbacks often require much larger sacrifices. However, these sacrifices may only need to be temporary, allowing you to meet a short-term goal.
A few good reasons to make big cutbacks could include.
· Paying off large debts quickly
· Saving up for a down payment on a home more quickly
· Saving up for a wedding
· Saving up for big travel plans
Ways to make major cutbacks
There are a few different options when it comes to major cutbacks. A few examples include.
Downsizing your home
Moving to a smaller home could free up a lot of money. Many older people with paid off mortgages permanently retire to smaller homes as a way of freeing up funds to put towards their retirement. Younger people can meanwhile take advantage of temporary downsizing – if you’re renting a house but want to save money for a down payment on a home, you may be able to downsize to a smaller rented property so that you can save up money to put towards this down payment.
There are obstacles to consider when downsizing such as what to do with all your possessions – if you’ve already got a home full of stuff, you may find it difficult transferring all these belongings into a smaller home. One option could be to use a company such as On The Go moving and storage that offers the option to put belongings in a storage unit. Alternatively, you could take the chance to thoroughly declutter.
Taking a break from driving
If you drive and own a car, a lot of money could be spared by taking a break from the road. You could simply save money on fuel by driving less, or you could sell your car/take your car off the road and try going a few months without driving. In doing so, you could save money on fuel, servicing, insurance, highway tolls, parking and much more.
Using your feet, cycling and using public transport could save you a lot of money. This Money Crashers guide offers tips on how to live without a car. Of course, if you need your car for work or rely on local services that can only be accessed by car, this may not be an option.
Giving up an expensive bad habit
Unhealthy habits like smoking and heavy drinking may not just be taking a toll on your health – they could also be taking a toll on your finances. A pack-a-day smoking habit can cost over $2,000 per year, while the average household spends $565 on alcohol.
Quitting these habits, even for a month, could help you to save money and improve your health at the same time. The likes of Help Guide offers tips on how to quit.