Learning to Live on Less Income

In today’s economy with companies cutting back hours and laying off employees it has become more important for people to re-evaluate how they live and spend. While earning money it is easy to fall into the habit of spending most of it without thinking about the future. But if a job is suddenly lost or a job or hours are cut, it can be hard to suddenly cut back on spending. The truth is that almost everyone can live on less income if they really look at their expenses and trim out the extras. Whether the goal is to cut back on spending or looking for ways to save more money, these tips can help with living on less income.

Re-evaluate Housing Costs

Whether a person owns a home or rents there are ways to cut back on housing costs. In the case of owning a home that hasn’t been refinanced for several years this may be an option to look at. Interest rates today may be much lower than when the home was purchased and refinancing could save thousands of dollars in interest payments. The other benefit to refinancing is it may lower the house payment significantly while still paying it off in the same amount of years. Even if there is a large amount of equity in the home, don’t be tempted to take some of it out when refinancing. The point of refinancing is to lower the house payment without adding to the amount owed on the home.

For renters, re-evaluate how much the rent is and if it is worth the amount being paid. Many times people rent a bigger place than they really need and end up paying high rents when they could get along with something smaller. Try shopping around to see if rent has gone down in buildings similar to the one that is currently being rented. There may be a place available that is much less expensive than the one that is currently being rented.

Lower Monthly Bills

While earning a higher income it is easy to add additional expenses that aren’t always necessary. Look closely at monthly bills and try to trim the unnecessary expenses down. Here are a few bills to try to lower:

Cable Television – Premium channels as well as extended cable can be expensive. Think about cutting back to basic channels. Renting movies or watching DVD movies already owned will cost far less than paying for premium cable each month. Cutting back to basic cable can save $20 to $40 per month.
Telephone – Today, most people have a home phone and a cell phone plan. Why have both? Cell phone plans tend to have a better long-distance plan and the cell phone is probably used more often than the home one. Cancel the home phone and save $25 to $50 per month.

Bundling Services – Look into the option of bundling the cable, internet and telephone services with one company. Check eac hplan carefully though as sometimes it can cost just as much to bundle as using each service separately. Also, make sure the price quoted isn’t just an introductory price, but the regular price for the entire year. In many instances bundling can save $20 to $40 per month.

Electricity – While turning off lights and changing out regular bulbs for more enery efficient ones is always a good way to conserve electricity, the truth is that the biggest electricity users in the home are any appliances with elements. The hot water heater, electric stove, clothes dryer, baseboard heaters and even the hair dryer use the majority of the home’s electricity. Taking shorter showers, using energy efficient cycles on the washing machine and dishwasher, hanging clothes to dry instead of using the dryer and turning down the heat are all ways of cutting down the electric bill. Also, turn off any electronics when not in use such as the computer and printer.

Learning to live on less income doesn’t have to be painful. Once a person starts cutting back on expenses and saving money, it will be surprising just how much money was being wasted on unnecessary expenses.