12 Easy Ways to Cut Back On Your Expenses

Many American families are burdened with the spiraling costs of living and resultant debts. According to The Federal Reserve, total U.S. consumer debt reached nearly 2.6 trillion dollars in 2008.

Families and individuals need to take a good look at their situation and adopt measures to ensure that their money works harder. If you find yourself stretching your limited resources to pay off numerous bills, here are a few quick money saving tips to stretch your dollar further and help you get out of debt:

• Mortgages: This is most likely to be your biggest expense. Therefore do your ground work well for getting the best deal that fits into your budget. Improve your credit report and score to get a low interest mortgage. Get online estimates and negotiate with competing creditors to get the right mortgage.
• Auto loans: It is advisable to save and make a large down payment when buying your car. This will reduce your loan amount and monthly payments as well as the associated finance charges. Compare loan rates from several creditors, banks and the finance companies affiliated with the auto manufacturer. If possible, add a little more than the amount due while repaying the loan. This will speed up repayment of the entire auto loan.
• Bank accounts: When opening a bank account, choose a bank which does not charge maintenance fees. Shop around for a bank that gives you a good rate of interest on your checking/savings account. Avoid taking more than the free checks issued by the bank as extra checks are charged. Open an account with the bank that offers free banking services like online bill payment and fund transfers.
• Use your credit cards wisely: Pay off your credit card bills every month in full to avoid additional charges like late fees or high interest rates on the outstanding balances. Stick to limited number of credit cards and maintain their payment schedules. When choosing a credit card, look for a low APR and no annual fee. It is better to use a debit card as this will restrict your spending to what you have in your account rather than using a credit card that may run you into debt. However if you are unable to pay your credit card bills, go for a debt management plan which enables you to pay off all your debts gradually.
• Save electricity: Turn off the lights when you leave the room. Consider installing compact fluorescent light (CFL) bulbs wherever possible. CFL consumes 75% less electricity as compared to incandescent bulbs. Fix a thermostat in your house to regulate the cooling or heating system to save on your electricity bill.
• Make a shopping list: Stick to buying the items on your list. Do not buy on impulse; decide if you really need a particular item or is it simply an item that you wish to have. Check prices of competing brands; it often gets you a good deal for less money. By all means resist using a credit card for payment at the supermarket. Use a debit card instead to spend within your means. Try to find high quality store brands. And look for off season sales.
• Use creative ways to entertain children: Most children want you to spend time with them. Instead of buying expensive toys and games or going to the mall to entertain them take them out to community parks or play simple games like tossing pennies in the jar. Get busy with drawing, coloring and doing craft work with them. You will not only improve their imagination but also have some beautiful moments to cherish forever.
• Cancel unnecessary dues or subscriptions: Cancel memberships of clubs that you do not actively use. Save money on magazine subscriptions by looking for online discounts. Discontinue magazine subscriptions which you do not read. Save fuel costs by getting your car serviced regularly to cut down on fuel consumption and prevent unexpected breakdowns. Drive at an optimal speed to control fuel consumption. Whenever possible use public transportation, it is much more economical.
• Control general expenses: Cooking meals at home is far more economical than eating out. Keep in touch with friends and relatives through email or social media. Internet-based communication channels are more economical than telephone calls. Saving and budgeting go hand in hand to make ends meet. Take a look at some guidelines to help you better manage your hard earned money.
• Create a spending plan: Before you set a budget for your expenses, know where your money is going. Make a note of all your expenses such as utility service bills, insurance premiums, taxes, credit card bills, school fees of your children, food, mortgage or rent, clothes, entertainments expenses, etc. Based on this, set aside the amount needed for your essential expenses. Put aside at least 5% of the remaining amount into savings and use the rest of the amount on flexible expenses such as movies, eating out or going on vacation.
• Plan to get out of debt: List all your debts, along with their current balances, minimum balances due on each card, interest rates and their due dates. Make a systematic plan to pay off all your debts timely to avoid paying extra interest and/or late fees. If you are falling behind in your payments seek the help of an authorized credit counseling agency like CESI to help you become debt free in a systematic way.
• Arrange for future expenses in advance: Make room for your annual expenses in your monthly budget. Each month, set aside some portion of your income in savings towards annual expenses like your insurance premiums. For instance, if your annual car insurance costing $600 is due in December, put $50 each month for the whole year in a savings account towards payment of that insurance. This way when you have to pay a major amount once a year, you will not have to stretch your salary in one particular month. It will also prevent you from incurring a credit card debt for the same.

Making conscious efforts towards saving can enhance the functionality of your budget significantly. However, CESI understands that making a budget is not an easy task. Seek the help of our expert counselors by calling 1-888-919-CESI to set up an effective budget.