Tips for cutting your spending
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Whether you're experiencing financial difficulties or not, being smart with your money just makes good sense. And when you're already short on funds, it can be tough to know how to cut back or where you should be making cuts. Some expenses are fixed and you don't have much choice about them – your car loan and mortgage, for example. But most of the other expenses in our lives are flexible and can be impacted by smarter spending choices so that you can have a workable budget.
#1 Clothing Costs Can Be Slashed Dramatically
You can't run around without clothes – it's just not done – but you can get nice duds for drastically cheaper than you probably are now. Thrift stores and consignment shops offer nice clothes – even designer labels – for one-fifth to one-tenth less than if you shop at a mall. If you're short on money and need new clothes for work or to interview for a job, these cheap shopping alternatives are a great place to start. Yard sales are also great, but there's no changing room, so that's a concern. Also, don't buy anything that needs to be dry-cleaned. You'll save big bucks if all your duds can be washed at home.
#2 Utility Expenses Are Very Flexible
You may not give a lot of thought to your utility costs. Your bills come and you pay them, but you can lower them quite a bit. Wash all your clothes in cold water, take shorter showers and don't let your water run unless you've got your hands or a dish in it. As for your heating and cooling costs, these can be cut back as well. Energy.gov recommends 68 degrees in winter and dropping it to 53 to 58 degrees while you sleep. When you're home in the summer, 78 degrees is doable and let your house get warmer during hours you're not at home. This will save you big bucks. Also, turn off lights you're not using.
#3 Avoid Buying Anything New
You know that as soon as you drive a new car off the lot, it depreciates by thousands of dollars. This same depreciation factor applies to everything in life. From furniture to books, dishes, pots and pans, curtains, home décor, cell phones and video games, nearly everything can be purchased used for far less than getting the exact same items new. Craigslist is a bastion of used items, just be careful of scams – never send anyone money – buy local and meet to pick up the item. Pawn shops, used book stores and even Amazon.com's used items all offer great deals on whatever you need for less.
#4 Rethink Your Insurance Policies
You definitely need car insurance, a homeowner's policy and health insurance, but there is a lot of latitude in pricing. If you own your car free and clear, there's no reason to carry collision insurance. You'll save hundreds by dropping down to the state minimum coverage. If you have to have collision because you're still paying a loan, make sure your deductible is as high as your lender will let it be. The same goes for your homeowner's policy. Raise your deductible to the max allowed. And you don't need “insurance” in the form of extended warranties on appliances, electronics or anything. Don't buy them.
Even if you're already deep in debt, it's never too late to change your habits and get on better financial footing. If your debts are so significant that you can't meet your obligations, in addition to changing your spending patterns, you may need to consider a serious solution such as Chapter 7 or Chapter 13 bankruptcy. Contact the law offices of John T Orcutt for a free consultation with one of our North Carolina bankruptcy experts to talk about your debt dilemma.