By Dori Zinn, Money Talks News
If you’ve looked over your budget and can’t cut down anymore, maybe you need to look a little harder.
There are probably some expenses you could reduce or drop to save thousands of dollars a year. Following are five examples of these costs — and how you could slash them.
If you could eliminate all five expenses entirely, you’d save a whopping $28,949 per year, based on averages. But even if you could lower them by a mere 10 percent, you’d still be $2,895 richer by this time next year.
1. Rent
The average national rent was $1,419 per month as of the end of 2018, according to the real estate research company Yardi Matrix.
If you could move to a place where the cost of living is lower, or even get a roommate, you could cut your housing costs significantly. If you could move in with family, you might be able to all but end your rent bill.
If you have an extra room, another option is to offset your housing costs by renting out the room to travelers. Try listing your spare space — or your entire home — on a vacation rental website like Airbnb, Homestay or VRBO (short for “Vacation Rentals by Owner”).
A 2018 analysis by Homes.com found that in some U.S. cities, you could earn enough extra cash to cover an entire mortgage payment by renting out a room just a few days per month. We detail the findings in “Do This a Few Days Each Month and Watch Your Mortgage Disappear.”
Total annual savings if you could:
- Give up the expense: $17,028 (based on the average rent)
- Reduce the expense by even just 10 percent: $1,703
2. Car payment
The average new-car loan payment was $551 in January, according to Edmunds.
If you can avoid it, stop buying new cars and instead opt for used vehicles. Cars are the first item we cite in “You Should Never Buy These 10 Things New.”
Ideally, you would save up enough money to buy a car outright instead of financing it, thus avoiding financing costs. But if you can’t do that, at least try to make a bigger down payment. The more money you can put down upfront, the lower your monthly car payment will be.
A major money-saving shift would be to get rid of a car altogether and take public transportation, walk or bike. Or, start using a rideshare service like Lyft or Uber. You’d save on not just a car payment but also on costs like insurance, gas and the biggest auto expense of all, depreciation.
Total annual savings if you could:
- Give up the expense: $6,612 (based on the average new-car payment)
- Reduce the expense by even just 10 percent: $661
3. Cellphone
The average monthly cellphone bill in the U.S. is $50 to $60, according to Quicken.
You could lower costs by adding a few friends or family members to your plan, or by changing your plan.
Don’t be afraid to compare different carriers. Try out a free online resource like Money Talks News’ phone and plan comparison tool.
If you don’t use your cellphone a lot or you’re home enough to justify a landline, you may want to consider ditching your cellphone altogether.
Total annual savings if you could:
- Give up the expense: $660 (based on an average of $55 per month)
- Reduce the expense by even just 10 percent: $66
4. Dining out
Sometimes you don’t feel like cooking, and that’s allowed. But let it become a habit, and that could cost you a couple hundred bucks every month.
The average household in the U.S. spends $3,365 eating out every year, according to the U.S. Department of Labor’s latest annual consumer spending survey.
Getting rid of any dining-out budget means you could pocket a lot of cash, as cooking at home is much cheaper. But even simply reducing your restaurant spending could make a noticeable difference in your budget.
Total annual savings if you could:
- Give up the expense: $3,365 (based on the average household’s spending)
- Reduce the expense by even just 10 percent: $337
5. Cable
If you haven’t cut the cord yet, you might soon enough. The average monthly spending on pay-TV service is $107, according to a recent survey from Leichtman Research Group.
Cutting the cord could cut your costs dramatically. There are plenty of affordable alternatives to cable and satellite TV alternatives.
For example, Hulu recently lowered the price of its cheapest subscription plan, and Amazon’s Prime Video is free to Prime members.
Total annual savings if you could:
- Give up the expense: $1,284 (based on the average bill)
- Reduce the expense by even just 10 percent: $128
