If you are an individual who is trying to save money, you are probably looking at your expenses and budget trying to figure out ways you can save. Maybe you have thought about cutting out your weekly trip to Panera or your yearly trip to a professional football game. While cutting down on these expenses may be helpful, it turns out that there are three categories where you can make substantial cuts. In this article, we will discuss the most costly budget categories and ways in which you can save money on them.
Eating out and going grocery shopping without a list or when you are hungry is when spending can get out of control. For example, if you go out to eat three times a week for lunch and spend roughly $15 per meal, that turns into $45 a week, $180 a month, and $2,160 a year. Add to that 2 dinners over the weekend at $30 a meal, that turns into $60 a week, $240 a month, and $2,880 a year. If you add these two expenses together, that turns out to $5,040 a year. By cutting down your eating out expenses to one lunch at $15 and one dinner at $30 a week, you will save $60 a week, $240 a month, and $2,880 a year. In other words, you can save almost $3,000 a year just by going out two times a week instead of five times.
Similarly, you can trim grocery expenses by going to the store with a list. Try to make sure that you have a clear idea of how much you are going to spend per grocery trip and do not go over. I personally limited my grocery spending at $200 a month. This means that I have to be more precise when I am grocery shopping and meal planning, but it does mean that I am not frivolously spending money on food that looks good to me as I am shopping.
- After spending $1,000 in purchases, you will earn a $250 statement credit.
- Receive 6% cash back at US grocery stores (up to 6,000 per year, then 1%).
- 6% back on select US streaming services (Spotify, Netflix, Hulu, HBO, ShowTime, Pandora, apple music, amazon music or video **not prime membership* (refer to American Express Website for full detailed list if need be).
- Receive 3% cash back at US gas stations.
- 3% back for ground transportation only (bus, train, ferry etc. not airlines).
Utility costs can be a major expense in addition to your mortgage or rent payment. Look for ways to decrease your spending here. It may be that you are willing to lower your thermostat by a couple of degrees even just when you are at work to acquire hundreds or thousands of savings over the year.
If you are having difficulties making your mortgage or rent payment, you could consider finding a roommate or putting that room on Airbnb in order to earn a little extra money. Refinancing your home may also be a good way for you to cut costs on housing.
Cars are a depreciating asset, so it is important to carefully watch your spending in regards to automobiles. Make sure that you purchase a car that you can afford, whether it is a new car or a car that is new-to-you. Even if you would really like a GMC Sierra, maybe consider purchasing a smaller truck if you cannot avoid the full price.
You may also be able to cut on gas expenses by seeing if you can work a day or two from home. My dad now works from home one day a week, which has saved him not only money but also time. Additionally, if you are close to your work, you may be able to bike, which will help you save money and get fit. Or if you live a little further away, carpooling or public transportation may be a great option.
No matter what your savings goal, you can meet it, especially by cutting expenses in the most costly budget categories. Rather than trying to save money through spare change or 50 cent coupons, you now know where you can encounter the most substantial savings.