With rising costs, you may wonder how your cost of living got so high. Even with astronomical prices, there are several changes you can make to take control of your finances and lower your cost of living.
Over time as inflation creeps up, your wallet will be squeezed tighter, which can cramp your lifestyle. Discover nine ways to reduce your cost of living and get more out of life.
1. Take a look at your overall financial status
Until you know where you stand when it comes to your finances, it may feel overwhelming to know where to begin.
Take some time to pull all your bills and expenses, such as credit cards, mortgage, utilities, insurance, groceries, and car payment.
Tally it up and then determine how much you are bringing in. It will give you an overview of where your hard-earned money is going and a starting point on where you can cut back.
Plus, you can estimate how much you can put away for an emergency fund and retirement. Use the information to create a budget that you can realistically stick to and try your best not to deviate from it.
2. Find ways to reduce your spending
After you review your spending and put together a budget, you may discover you are paying for things that you don’t need or haven’t used in a long time.
Those costs are your low-hanging fruit that is the first to be cut. Do you have cable and several streaming platforms, such as Netflix and Amazon? If you find you aren’t watching TV often, then cancel one or more subscriptions. Do you find that you are eating out several days a week? Consider bringing lunch to work and cooking dinner at home more often. Not only will you save a lot of money, but it is a much healthier option.
3. Pay off high-interest debt
Do you have high-interest credit cards or car loan debt? Work on paying that down first.
It might not be fun upfront, but in the long run, you will save a ton of money by avoiding the high monthly fees.
You might realize that most of your payment is covering the interest fees and barely making a dent in the actual debt.
Start with paying off the highest-interest debt you have, clear it, and then move on to the next.
Not only will you save money by paying off high-interest debt, but you will, in turn, reduce your stress around money.
4. Are there opportunities to increase your pay?
Another great way to help with your cost of living is to see whether you can increase the amount of money you are bringing in each month. Have you performed well at work but are overdue for a promotion or pay increase? Now is the time to present to your boss all that you have contributed and why you are asking for a raise.
If getting a raise at your current job isn’t an option, look at what you could make at another company. One of the best ways to boost your income is to go to another company where you can usually bring your experience and ask for a much higher salary.
5. Move closer to work to minimize your commute
Do you find you are spending one to two hours commuting to work each way? If so, imagine the time you would get back and the savings in gas having to drive a long distance daily. You would be paying less for gas and less maintenance on your car as it wouldn’t be used as much.
If you love where you live and moving isn’t an option, go back to the previous point and look for a position closer to your home. No matter where you work, inquire if there is a work-from-home alternative. Many companies are becoming more flexible with working from home, either partially or full-time.
Even if you only go into the office one or two days per week, the savings in gas will add up.
6. Look at refinancing your home
If you own a home, evaluate how much you are paying on your mortgage per month and the rate it is at. Interest rates will vary, but if you obtained your mortgage when rates were high and are currently much lower, it might be worth refinancing to reduce your monthly payment.
Over time, that is more money in your pocket that you can put toward paying off high-interest debt or contribute to your retirement and savings.
7. Get smart with your shopping
Have a plan and get smarter when buying groceries, household items, and personal purchases.
Joining a membership club such as Costco allows you to buy everyday needs in bulk and at a fraction of the cost.
Are you heading to Target, Walmart, or CVS? Many stores now have in-store apps that offer coupons and discounts on things you are already shopping for. Download cash-back apps such as Rakuten, where you get cash back on purchases from various stores.
Need to save on gas? Get your gas at Costco or sign up for gas reward programs like Fuel Rewards, where you get a slight discount every time you fill up.
8. Consider renting out extra space
Do you have extra space in your house or on your property? Rent out a room or do a short-term rental with an ADU (accessory dwelling unit) on your property that you aren’t using.
It is a great way to bring in extra cash for space that you have no current use for.
9. Set goals and stick with it
Now that you have a plan and certain goals you wish to reach stick with it! Gradually you will see the rewards of making small changes that result in a significant decrease in your cost of living.
Moving? Work with Beverly Barnett
If you are thinking of moving, let an experienced realtor such as Beverly Barnett
help you navigate finding that perfect place to call home. When searching for Lake Street homes, Beverly Barnett
has the expertise as a top realtor in the San Francisco area to guide you to the right home.
Or, if you are interested in Lake Street apartments, have confidence that Beverly and her team can find you an apartment with the right amenities and location.