Reduce Housing Costs
Refinance your mortgage to get a better rate. I found out that someone who sought my help for financial coaching was paying 7% on a mortgage, despite the fact that we are in a historically low interest rate environment where average rates (after 2 central bank increases) are now hovering around 4.5% and they were as low as 3.5-3.75% as recently as 3 years ago. That person could have refinanced and shaved $1k a month from the mortgage payments. What would you do with an extra thousand? If you don’t own, downsize your apartment. If you’re single and childless, do you NEED 3-bedrooms? If you have 2 kids who are are young, close in age and the same sex, maybe they can share a room for a while. If you’re a renter, you have to be a little more creative as I doubt your landlord will agree to just lower your rent.
Downgrade your car
Cars are budget killers. Not only are you paying for the note, tires, brakes, excise (personal property) taxes, premium gas, insurance, etc. It’s all too much. I’ve already gone over the low maintenance costs of my car. If I cared about my image, there’s no way I’d be driving a dented 10-year old Honda. But I don’t. I care more about my money than the opinions of superficial people who probably don’t have their financial success in mind.
Review your insurance policies
You’d be surprised by the level of savings you can achieve by doing an insurance check up. I like to review all my policies annually to make sure I’m not missing out on any discounts I may qualify for, as well as ensuring that my premiums have decreased for the insured items that have been depreciated. Also, it’s a good time to move your deductibles around to fit your needs and get rid of any extra features you don’t need.
Cut the Cord
Cable is expensive! Furthermore, thanks to technology and ingenuity, it has become less relevant. I’ve always told people that if I lived alone, there is NO WAY I would still have cable and frankly, the bill pains me every time I have to pay it. Get a fantastic internet plan and sign up for Hulu, Netflix, and Amazon Prime. These days, they’re even letting you do HBO Go independently. What is this? $75 total? And that’s if you decide to not to share with someone else. That’ much better than the $200/month I pay and I can’t even take it with me. For less than $40 a month, you and a friend could have all your favorites anytime, anywhere in the world with an internet connection. Sounds like a no brainer.
You can negotiate anything: the house you’re buying, the car on the lot, and yes, even your cellphone bill. As long as the company has a competitor, they will negotiate with you. Heck, even if they don’t have a competitor, you can be pleasantly surprised at what people will offer or what programs exist that we aren’t aware of. For example, back in late January, I had an MRI. My portion of the bill came to $750. I’m fortunate enough to be able to pay it but as you know, I am also cheap *shrugs*. I sat on the bill until the last possible minute hoping by some miracle I would not have to pay for it. I actually ended up forgetting about the bill and at that point, not wanting to be in arrears, I called the hospital to make a payment by phone. The receptionist asked if I was going to make installment payments (I was never going to) but before I could answer, she followed up with: “If you want to pay it all at once, we offer 20% off the bill.” I thought that was interesting for a number of reasons, but I digress… Of course, I jumped at the opportunity to save 20%. I was going to pay for the whole thing anyway, why not? The point is that the hospital didn’t have to offer me a discount. They are a necessity with no real competition. If they can make me that offer without being prompted, what is your cell phone company willing to do? So call your providers and ASK! The worst they can do is say no.
There you have it. Five simple ways to simplify your life and trim the fat.