1/2/2014 4:00 PM ET|
14 ways to slash your expenses in 2014
Boost your bottom line in the new year with these budget cuts.
With the new year approaching, it's time to get your financial house in order.
No matter what mistakes you made in 2013, you get a do-over in 2014. The beginning of the year is a great time to make changes that will boost your bottom line going forward. But before you can make a plan to save money, you have to find out where your money's going. If you use an online budget tool or computer program to track your spending, run some reports and evaluate where your money went. If you don't have any records, write down every penny you spend for a month.
"It's hard to figure out where you're overspending until you know where you're spending," says Jean Chatzky, author of "Money Rules: The Simple Path to Lifelong Security."
Once you've got a record, do some analysis. The first question, obviously, is whether your outgoing funds exceeds your income. If you've got a mountain of credit card debt, and every month you spend more than you take in, you need make some changes.
"This can happen to smart people, to anybody, to responsible people," says Beverly Harzog, author of the new book "Confessions of a Credit Junkie: Everything You Need to Know to Avoid the Mistakes I Made." Her problems were caused by overspending when she was young, but others have ended up in debt because of job loss, medical problems or other issues beyond their control. Solving the problem, however, is up to them. "It is your problem and you have to fix it, regardless of how it happened," Harzog says.
Even if your expenses don't exceed your income, drilling down into your spending may reveal places you can painlessly cut costs to have more money for retirement, a home down payment or an exotic vacation.
The best spending plan for you may not be the best plan for your neighbor. We've all heard the cliché about cutting out the morning latte, but that isn't going to work for everyone, especially those who never buy lattes. "If you value that takeout coffee – if it puts a little joy in your day – I don't believe that's what you should cut," Chatzky says.
For some people, cutting out the morning latte won't make a dent. They may have to look at more painful cuts, such as moving to cheaper housing or choosing public rather than private schools. "Sometimes the little trims here and there aren't enough," Chatzky says.
Cook more at home. "We eat so frequently on the go these days," Chatzky says. "The evidence is gone before you get home." Anyone who can read can cook, and the Internet is full of websites with easy, healthy recipes.
Save on groceries by shopping store sales and using coupons. It's true that a lot of coupons are for junk food, but that doesn't mean you can't save with coupons, particularly on personal care and cleaning products. Store sales can provide even bigger savings. Many products go on sale every two, three or six months. Watch the sales cycles on products you use, and stock up when prices are lowest.
Look for happy hours and restaurant deals. For many people, drinks and dinner with friends are a big part of socializing. If you don't want to give that up but you want to spend less, find restaurants with 2-for-1 drinks and free or cheap appetizers and make those your dinner. Join restaurant email clubs to get coupons you can use to cut the price of restaurant meals.
Call your cable TV and Internet provider and ask for a better deal. As more users abandon cable and more competitors get into the market, companies want to hang on to customers. That means they're ready to make a deal. You'll get the best deals from the customer retention department, which is where you call to cancel. "The last time I did this, I saved close to $50 a month," says Liz Weston, author of "Deal with Your Debt: Free Yourself from What You Owe."
Investigate cheaper cellphone plans. Many carriers are offering new no-contract and pay-as-you-go plans. If you find a plan you like, and your contract is up, ask your existing carrier if it will match the price or give you a better deal.
More from U.S. News & World Report:
- 6 things that will cost more in 2014
- 10 ways to save on food costs
- 6 credit card trends to watch in 2014
Cancel your landline phone. Many people find they rarely make calls on their home phone. If you're not using it, why are you paying for it? Ask about bundling your phone with your cable and Internet service – but be warned that a cable phone will not work in a power failure.
Review your insurance costs. Call your insurance agent and make sure you're getting all the discounts to which you're entitled. Make sure your coverage fits your current circumstances. If your teenage driver moved out and got his own car, get him off your policy. You might also want to get quotes from other companies on auto or home insurance.
Call your credit card companies and ask for lower rates. Or do balance transfers. Credit is loosening up and card companies are sending more offers. If you get a good offer, call your existing company and see if it will match the new offer. If your credit is good and you make all your payments on time, you're in a good position to negotiate. "All they can do is say no," Harzog says. "Consumers have more power than they know."
If you are in debt, make a plan to pay it off. Paying $200 a month in interest charges is a waste of money that would be better used toward retirement savings, your kids' braces or a trip around the world. Some experts advise paying off the smallest balances first, although Harzog recommends targeting those with the highest interest rates. Either way, start paying off those cards, one at a time. Make the minimum payments on all cards, but target one card at a time and make bigger payments so you can pay it off. When you've paid off one card, go to the next.
Look for a cheaper health club. Are you paying $75 a month for a gym membership you never use? Maybe you should cancel and take up walking, biking or hiking. Perhaps you can get a gym membership that's equally good for half the price at a YMCA or community center. Shop around.
Look at the fees associated with your bank and investment accounts. If you don't have free checking, ask your bank what you can do to get it. If your bank doesn't offer free checking, find one that does. If mutual fund fees or stock account fees are eating into your returns, move your accounts to a discount brokerage, especially if you're not getting personalized advice.
Don't shop for recreation. If you're not in the stores, you won't be tempted to buy. That goes for yard sales and thrift shops, too, Weston says.
Be careful of online purchases. It's easy to shop online in the wee hours of the morning, but that spending can add up. Unsubscribe from email alerts that urge you to spend. Get yourself off stores' online mailing lists and restrict your online shopping to things you really need, when you need them.
Make a budget and stick to it. Give yourself a realistic allowance for discretionary spending and don't spend any more than that. "It sounds quaint," Harzog says, but having a budget works.
More from U.S. News & World Report:
VIDEO ON MSN MONEY
Many of the older generations used to say to take care of your pennies and the dollars would take care of themselves.
I have observed how others handle their money and I believe the earlier generations were right.
Those who lived through the depression or just had hard times, considered a penny valuable. Even with inflation and devaluing of the penny, my mother still went to great lengths to save those pennies. It served her well. She had twice as much as those who had 4 times the income.
Those who only ask what the payment is, when buying, will probably never get ahead. since the total price is most important. Some of the stuff they buy with low payments are worn out before they are paid for.
It is the attitude. People used to take a lot of pride in what they saved and if they made a good buy. Now they want to live extravagantly, spending too much for their home and vehicles. They want to spend money to impress others.
People do much better if they budget their money and know what they can afford. It is best to live a little below our means.
How about don't go to bars at all?
"Those who lived through the depression or just had hard times, considered a penny valuable. Even with inflation and devaluing of the penny, my mother still went to great lengths to save those pennies. It served her well. She had twice as much as those who had 4 times the income."
I think that's the point really, don't you? As a society we're going back into depression mode for the middle and under classes. Forget the existence if a vibrant middle class. For the past 4 decades or so America has embraced the policy of redistribution of wealth into the hands of a privileged few at the top of the economic pyramid. So yeah, reset, you're back in the great depression if you're not on the very top.
Your economic system is predicated upon:
a) Privatized gains versus socialized losses for the Wall Street Banker/financial services sector class
b) Internalized profit versus externalized risk/expenses for the "job creator" class
c) Socialism for the aristocracy versus laissez-faire capitalism for the masses
So yes, indeed, prepare to do more with less regardless of how hard you work for the foreseeable future.
The same could be said of certain republicans, too. Ohbummy.
Don't get me wrong, I totally agree with you, but it would be better for EVERYBODY [except government parasites] if we gave EVERY politician a one-way ticket out of the country, PERMANENTLY!!!
Bills like Heating and Air, it's not so clear cuts as some might lead you to believe. Ditto for the Mortgage and Car note. You have to have somewhere to Live and a way to get to work. If you can afford a brand new what ever, don't let posters make you feel you don't deserve it. Tomorrow not's promised to anyone. WE are here to enjoy life as we plan for our retirement years. Years which are also not promised to anyone. So it's a matter of finding a Balance.
Pennies are not going to change your life unless you find one worth far more than a penny. So I get the attitude concept but stating how a person who saved twice as much as a person making 4 times the income really sends the wrong attitude. The Attitude should be to also make 4 times the income. Then you can save a heck of ton more. If things go wrong for a person making far less, that person has far less income to get out of a hole.
The Attitude is making far more in income plus saving more. If you omit one, you are potential putting yourself in a bad position in the future.
WITH the cost of just living a bare minimum I too have made cuts ! rent went up $30 per month and everything has gone up as well ! And my company has said "no pay raises this year "! which means we must cut out as much as we can! no more magazines ,,no newspapers ,,and cut out going to movies ! Since I live within walking distance to work and stores,, my car will sit in carport
more ! by driving only once or twice a week and only going less that 40 miles I can go one to two
months between fill ups ! And shopping for new goods is out ! used goods stores like "Goodwill" will give me what I want at a much lower price ! make things last longer by fixing it when it breaks ! sometimes this will make a coffee pot lasts longer,,,and replacing things only
when they cannot be fixed is a good way to make money lasts longer ! Remember we the people
have the power to make changes come "BOYCOTT" works ! if we were to stop using a product or
service then we can make companies lower their prices or go out of business ! we can survive.
best way to save money---is don't spend it ---gyy
Spend less for more. When ordering, do check if there are coupons available. Take time to find at Coupons.com, AnyCodes.com or else.
I'm surprised that the article didn't mention switching your Energy Supplier for your gas and electric bills. I switched 9 months ago and I've saved a lot of money on both my gas and electric bills. I saved $10.42 on my gas bill and $8.23 on my electric bill last month alone just because of better rates. In my first 9 months, I have saved $137.83 on my gas and electric bills that you would otherwise be giving away to your current gas and electric provider. After referring a few other customers, I now receive Free Energy! That's right, last month I saved $42 on my gas bill and $33 on my electric bill. You owe it to yourself to check this out and save money: .
I would highly recommend looking into switching your energy supplier depending on which state you live in. The energy supplier that I switched to was Ambit energy because they have an excellent reputation, A+ with the Better Business Bureau, J.D. Power & Associates Customer Service award in NY, free energy, and you can earn travel reward points by paying your bills!
Ambit energy services CA, CT, DC, DE, IL, MA, MD, NJ, NY, PA, RI and TX.
If you would like more information on how to become an energy consultant and get paid to help others save, contact me through this website: . I look forward to hearing from you and I would love to help you and others save.
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Cheap LED light bulbs cost more upfront -- between $8 to $10 apiece -- but begin to pay off within 18 months.
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