Now that Christmas is over, I can bet that a lot of people are wondering how they will pay down their Christmas bills. Even though I blogged about keeping within budget when buying your Christmas gifts, I'm sure there are some credit cards bills that some of you are dreading for January. Get a head start on paying those bills off by cutting items from your budget. I personally started cutting my budget this year, and this Christmas I paid cash only for gifts and have no new debt coming to me for 2014. While these ideas are specific to me, I'm sure many of you can use some of the tips to help cut your budget as well.
Assess your bills
Compile all of your bills from the past year and make a spreadsheet listing what you paid each month and then a yearly total. Some of the numbers may shock you, as my hydro bill did. While having electricity and water is totally important, I definitely thought I shouldn't be paying thousands of dollars a year for this service. Decide which bills you feel are too much and decide what you are going to do about it.
Cut your heating bill
Like I said, my hydro bill was the biggest shocker. I needed to figure out how to cut our electricity and water usage, because this is literally, money down the drain. The first and most simplest way to save money on your heating bill is to turn down the thermostat. Mine is now set at 68 degrees and I know people who set it as high as 78. I can't imagine their heating bill! I went down 4 degrees and while I notice it being chilly in the evenings and mornings, I simply use a robe or a blanket to keep warm. Even my always cold husband hasn't really complained. Jessica blogged about how to stay warm in the fall & winter and some of these tips can help you to keep your thermostat low.
My Savings: $40 a month
Cut your hydro usage
As for hydro, this was an ongoing problem for us as I have three kids who often turn things on and leave them and unless I hire someone to walk through my house all day and turn stuff off, this isn't going to change. My first step was to educate my kids about the value of money and how leaving things on to use electricity spends our money for nothing. By showing them the parallel between money going out for bills and money being saved for trips instead, they were able to understand the value of turning lights and electrical devices off. It isn't perfect, but it is better.
Phantom power was also our biggest concern. With computers and other technology devices always plugged in, I know they are slowly leaking power that we are paying for. Smart Strips or Smart Sockets, like this one at NCIX, will shut off your devices automatically so you don't pay for this constant leakage.
Appliances use the most energy in your home. Make sure your appliances are Energy Star and check for leaks. The seam on our freezer on our refrigerator was pulled right off by my ice cream loving child and we didn't know it. One day I realized that I could feel cold air rushing out of the freezer, so my refrigerator was constantly working to keep itself cold because the cold air was escaping out of this misplaced seam. My husband immediately fixed it and the bills went down. We then checked the rest of our appliances were working to maximum efficiency. Some ways to do this are to make sure your dryer lint carriage and the hoses are clear of lint, that your dishwasher and washer are cleared of gunk and that your oven door shuts properly and is clean.
We use a lot of water in this home and that was a bill we didn't need to be high either. Since you pay for what you use and what goes down the drain, cutting what goes down the drain seems an obvious improvement. To give the simplest advice, cut your shower time. I will often shower with my youngest son so both of us get clean and don't use additional water. When my kids have a bath, I make them have it together or I just top up the water for the next child. I don't fill the bath to full either. When we brush teeth or wash our hands or dishes, I shut off the water while lathering and turn it back on to rinse. I also only run the dishwasher when it is completely full to maximize efficiency.
My Savings: $100 a month
Get rid of cable
I rarely watch regular television anymore. My family and I watch mostly downloadable content from Netflix or free streaming sites, so we didn't really need a $100 cable bill that consisted of pre-selected groups of channels. There is so much other content out there, we don't need to be tuned in at 8pm every Thursday for our favourite show any more. This also has the added benefit of no more commercials (mostly).
My Savings: $120 a month
Get rid of your home phone
If both you and your partner have cell phones, and probably your kids, do you really need a landline? Rarely does my telephone ring, and when it does it usually someone I don't want to hear from like a telemarketer. I connect with my family on my cell phone or Skype and I connect with most of my friends through getting together, texting and emails. While many people think this is a sad way to communicate, I think it is efficient as I just don't have the time to talk on the phone for long hours like I used to. Sending a written message lets me say what I need to say and lets them read it when they have time to respond. Besides, in an emergency, I always have my cell phone.
My Savings: $45 a month
Drive less
Our automobile gas budgets are high, even though neither of us commute to work. I mainly use my vehicle to drive to do errands and visit family and friends. My mom lives a two-hour drive away so one visit to her could cost us $80. Gas is expensive and pretty much a waste of money. To cut this budget we now drive less. We have stores in walking distance of our home and with a wagon for groceries and bikes for the kids, we can still go to the grocery store and save the money we would have paid driving. I also try to do all of my errands in one day, rather than a few each day so I am not using the gas each day to drive to and from each place. So, if I know I need to hit up the east end of the city for something, I wait until I need to go there for other things and do it all in one day. Also, I try to research the closest spots to get what it is I need, even if it might be a bit more expensive to buy at a closer store, if it is something I buy regularly, the gas prices might make it a better deal. As for visiting my family, I try to get them to meet us half-way or we only go down for special events, not just for spur of the moment visits.
My Savings: $60 a month
Cut your grocery bills
I recently wrote about this in-depth, so I won't bore you with those details again, but you can read about it for yourself. Clare blogged about making your groceries last longer and Heather also blogged about price matching. All of this information should help you to reduce this important line item in your budget.
My Savings: $200 a month
Reduce your insurance
Insurance is a necessary evil, which we all hate paying, but love having it when we need it. Every year my car and home insurances go up and it is frustrating considering nothing has changed, just the rates. The easiest way to pay less insurance is to shop around and not just automatically renew. I have changed insurance companies a number of times over the years, simply because someone else offers a better rate. I know it takes time and can be a pain in the butt, but so is paying more than you should have to. I also carry high deductibles, which I've been told is not a great idea, but having not had to use my insurance in over 18 years of driving, I'm going to think I've saved more than I would have to spend on a higher deductible. Also, check over your policy for items which you will never use. For example, many car insurance plans include a free rental car while your car is being fixed. If you don't need this because you are a two-vehicle household and can get by with one car for a short period of time, you'll probably save enough that you could pay to rent your own vehicle anyway.
My Savings: $50 a month
Cut frivolous expenses
This is obviously a no-brainer. Even the simplest of debt plans tells you to make coffee at home, not pick it up at the drive-thru window each morning. But, think about other things that might be stealing your money from under your nose that you don't really need. I love to read magazines, it is my vice, and I had about 15 magazine subscriptions at one time. I knew I wanted to read all of those magazines when I subscribed to them, and the subscription prices are so low, it seems worth it. Instead, what I got was a pile of unread magazines making me feel guilty each day that I still hadn't read the issue from four months back. Something enjoyable was now added to my to-do list. Once I factored everything out, it is much cheaper to pick up a magazine at the grocery store, knowing I'll have time to read it, than to subscribe and never read it. I also have the option of getting magazines digitally, which can be much cheaper and something like Next Issue gives me unlimited access for a low monthly price.
My Savings: $40 a month
Bargainmoosers, what can you cut out of your budget for 2014?
Photo Credit: Camera Eye Photography
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