Unless you’re part of that lucky 1%, you probably get in trouble with your spending periodically. Or maybe it’s because you’ve lost your job, are underemployed or there’s just some other reason why money is very tight. Whatever the reason, if you find that you have to drastically reduce your spending, here are nine strategies that could help. If you implement all or most of these and your income stays constant, you shouldn’t have to think much about your finances going forward.
1. Cut discretionary spending
The first and maybe most important strategy is to review your budget. There are undoubtedly places where you could cut back. For example, could you reduce the number of cable channels you get? Could you eat out less? Do you need to buy as many snacks from those vending machines at work? This may sound simple but these kinds of expenses can add up to a lot. The website LivingSocial did a survey of 4000 Americans and discovered that the average family goes to restaurants or fast food places 4.8 times a week. Another survey of 1005 adults discovered that American consumers were having lunch at restaurants at an average of almost twice a week and spent about $10 every time. Whichever might be true for you, if you put a halt to eating out this could save you nearly $100 a month or maybe even more.
2. Negotiate
You say you don’t want to eliminate your cell phone or cable services? Then you should at least be able to talk your way to a better price, particularly if you can convince that provider that you are thinking of dropping your service. The secret here is to tell your provider’s customer service representative that you’re thinking of going to a competitor. He or she will probably send you on to a customer retention specialist and this person is almost certain to offer you some concessions.  Here’s a short video with some good tips for negotiating with credit card companies to get your interest rates reduced.
3. Plan ahead
One of the reasons that many of us overspend is because we fail to think about what will be happening during the next week. We might have no idea as to what to cook for dinner so grab fast food at the last minute. Or maybe we forgot about a wedding or birthday party and have to rush out at the last minute to get a gift and we spend a lot more than we had thought we would. Planning meals in advance and using coupons will definitely reduce your grocery costs.
4. Reduce your fuel costs
Gassing up our vehicles can take a big chunk out of just about anybody’s budget. As an example of this, my wife filled up her car yesterday and it cost nearly $50. If you go to a site such as Gasbuddy.com or Gaspricewatch.com you will find the least expensive gas in your area. Also, if you stop to think about it you could combine errands, use public transportation, drive less or use a bicycle. The California Energy Commission once calculated that if you are a commuter you could save about 30% on your gas expenses if you carpool in place of driving to work. Given the fact that the average household spent $2912 on gas in 2012, a 30% savings would translate into $70 a month or more.
5. Downgrade your insurance
It could pay to contact your insurance sales representative for a review of your coverage, as you might be eligible for a downgrade. As an example of this if your car is getting old and especially if it’s paid for you might be wasting money by paying for both collision and comprehensive insurance. The collision insurance covers your car in the event you’re in an accident. On the other hand, liability insurance is if you damage another car and comprehensive insurance is to get your car repaired if it’s damaged in some way besides an accident. What’s typical is that you buy comprehensive and collision insurance as a package. But it’s not a necessity. If your car is older and hasn’t kept anything close to its original value, you might want to redo your policy. You should also go online to a site such as Esurance.com and do some comparison shopping. Automobile insurance is just as competitive as the car business and it’s likely that you will be able to get the same or even better coverage for less by switching to a different insurer.
6. Lose one of your vices
You’ve probably read that cliché about not getting that drive-through coffee every day. But your vice might be something different. For example, according to Survey Analytics the typical consumer pays more than $1200 a year buying beer. Also, the American Lung Association says that the average price of a pack of cigarettes is now $5.51. If you smoke a pack a day, you would save $167 in a single month if you gave up smoking. And you’d save a little more than $2000 over the course of a year. Do you gamble? You should be able to cut back on that. Or you might have a fairly innocent habit like soft drinks where you could drink fewer cans and save money.
7. Pay down your debt
You might not be saving money due to your debt. We’ve seen reports that the average household carries $7123 just in credit card debts. If this is you and if you were to pay off that debt without incurring more debt a few months later, you’ll ultimately save money. Here’s an example of this. If you owe $500 in debt at 10% interest on a credit card, you’ll run up $50 in interest — assuming you don’t pay off your balance — and then the next month you will owe $550. Do nothing and next month and you’ll owe $605. What this boils down to is that if you eliminate debt – especially the kind that accumulates interest quickly – you will have a lot more money left over to save.
8. Get organized
If your finances are kind of chaotic you could get them better organized. We’re not talking budgeting here. It’s just things as simple as determining when your bills need to be paid. If you stay on top of your finances, you should start saving money pretty quickly. For example, you pay a late fee anytime you have a late credit card payment.
This might be just because you accidentally threw away the credit card statement and couldn’t remember your due date.
When you have a late fee, you get a negative mark on your credit report, your credit score will likely go down and lenders will see you as a greater risk. In fact, some credit score experts say that just one late payment could drop your score by as many as 40 points.
9. Review those auto-pay subscriptions
Also make sure you review your subscriptions – particularly those that are on automatic pay. Do you have a gym membership that’s on auto pay but you haven’t seen the gym in four months? You need to eliminate that subscription. Do you pick up fast food habitually because you feel that you’re too tired to cook? Or do you buy snacks out of vending machines at your workplace, which are costing you twice as much as if you bought them with you from home? All these could easily be more than $100 a month or more than $1000 a year. And that’s serious money.