5 Practical Budget Cuts You Can Make Right Now

Monday, August 1, 2022

practical budget cuts

The effects of inflation continue to take a toll on individuals and families. Budgets are being stretched, and it’s more important than ever to focus on your finances.

Here are some easy-to-apply tips for how you can adjust your spending and keep your budget on track.

1. Switch to generic products

Costs can add up quickly at the grocery store. As you shop, keep in mind that while groceries are a necessity, name-brand products are not. Consider switching to store-brand products instead. The amount you save will vary by item, but your savings will add up with each shopping trip.

Our partners at GreenPath Financial Wellness recommend considering the cost of convenience while grocery shopping for added savings. While using a grocery delivery service may be necessary for some households, it’s not always practical. Especially when you factor in the extra fees involved.

2. Reduce your energy usage

Adjusting your habits in small ways can go a long way in reducing your energy usage. This includes turning off the lights when you leave a room and using cold water for your laundry when possible. There are some other things you can do to decrease your energy bill as well.

Try turning your thermostat down 7-10 degrees for eight hours per day in the fall and winter. The U.S. Department of Energy’s Energy saver guide says this can save you as much as 10% per year. Turn it up during the spring and summer months. Additionally, keeping electronics plugged in when not in use could add an extra 10% to your monthly utility bill. This is due to the electronics continuing to draw power even when turned off. Switching to LED lightbulbs can save energy and money as well. Not only do they last longer, but they use less energy than regular lightbulbs.

3. Cancel subscriptions you’re not using

Chances are high that you’re enrolled in a monthly subscription of some sort, whether it’s for your health or entertainment. The costs may seem small when you look at them individually. However, they can add up to hundreds of dollars per month.

A recent Nielsen survey found that 21% of respondents paid $20-$29.99 per month for streaming services. Additionally, 17% paid $30-$49.99 per month and 15% paid more than $50 per month. Now, imagine the savings when you cut half of those amounts. The same goes for music streaming services, meal delivery kits, and gym memberships. If you’re not using your subscriptions regularly, cancel them to free up some space in your budget.

4. Shop for cheaper insurance

When was the last time you shopped around for auto or homeowners insurance? If you’ve been with the same company for a while, it’s time to get some new quotes. Car insurance rates are based on a variety of factors. This includes your driving record, your vehicle’s mileage, where you live, and even your credit score. When these factors change for the better, that’s money in your pocket. Bundling with your homeowners insurance can produce additional savings on both policies.

Experts recommend reviewing your insurance options every year or two to make sure you’re not overpaying. While your rates may not change every time, taking time to review ensures you’re not leaving money on the table.

5. Bring your lunch to work

It can be tempting to run through a drive-thru at lunchtime. After all, it doesn’t take too much time, and it doesn’t cost very much money. Or does it?

Let’s say, on average, you spend $7 per meal at lunchtime, Monday through Friday. That’s $35 per week and $140 per month. Packing a homemade lunch or repurposing leftovers costs just a fraction of this amount. When you make this a lunchtime habit, the savings will certainly add up.

You don’t have to make all these changes at once. Even applying just one can make a difference for your budget.

McCoy FCU 8/1/2022