Have you ever noticed how your monthly expenses always seem to equal the salary you’re making? The phenomenon is called “lifestyle creep” and it can keep you from reaching all kinds of financial goals, from paying down debt, to saving for retirement.
Here are four things you can do right now to cut your monthly expenses.
1. Make a Budget
The first step toward cutting expenses is to make a budget, so you know exactly where your money is going. Start with major categories, like rent or mortgage, utilities, transportation, meals, clothing, and entertainment. Then break it down even further to ferret out items that are ripe for reducing.
2. Lower Your Mortgage Payment
The biggest monthly expense for many people is their home mortgage. If you haven’t examined that loan since purchasing your home, it’s quite possible that you could save a lot of money – both now and over the life the loan – if you refinance at a lower interest rate.
To know whether refinancing makes sense, you’ll need to add what you’ll spend on closing costs into the calculation of your new monthly payment. Call our mortgage team at 703-739-3092 if you want to see how you can save with us.
3. Get an Insurance Checkup
If you own or lease a car, you absolutely must have car insurance. But it pays to shop around periodically to make sure you’re getting the best deal. We have several partnered insurance services you can consider or obtain a free quote. Learn about them at sdfcu.org/insurance-services.
Also be sure to examine your policy for “extras” you may not need. For example, you could be paying for roadside assistance both through your insurance policy and through AAA.
4. Examine Your Auto-Payments
Putting your regular bills on auto-payment can be a smart way to protect your credit rating by ensuring you’re never late with a payment.
However, if auto-pay causes you to keep paying for items or services you don’t really need or use, it’s no bargain.
Visit our partner, BALANCE Financial Fitness Program for more budgeting tips, spending analysis and financial counseling services.