What could you do with an extra $500 each month? Expand your savings account? Pay off your debts? Go on that family vacation? Start a business? The possibilities are endless, and $500 is no small amount, especially to a growing family, college student, or paycheck-to-paycheck worker. Luckily, there are hundreds of ways to shave money off of your monthly bills, but these seven can save you the most.
We’ll cover everything from smoking and credit card debt to actually using a budget to track your finances in a more efficient way for better financial decision-making. Ready to jump in? Here are seven ways to cut your monthly budget by $500.
1. Quit Smoking
Have you added up the cost of your smoking habit lately? Smoking is an addictive habit that can wind up costing you thousands every year, and with cigarette and tobacco costs continuously rising, it’s no surprise that many smokers find themselves drowning in debt. After all, a pack of cigarettes can cost as much as $9-$10 in some states, and if you’re smoking 3-4 packs per day, you’re spending around $500-$1,000 per month on cigarettes alone!
Not to mention the costs of your inevitable medical bills. Smoking will wind up costing you money in healthcare as well as home repairs, cleaning, and maintenance. If you want to save money, ditch tobacco for good. Tobaccoless options like Black Buffalo or even nicotine gum are a good place to start.
2. Pay Down Credit Card Debt
If you have just one credit card, your monthly minimum payment probably isn’t more than a hundred dollars (unless you’re spending more than $5,000 a month on it). However, the average American has four credit cards! Let’s say you’ve got $1,500 in financing to utilize every month, and you’re maxing them out. The minimum payment will be at least $100-$150 per month for each card, adding up to over $500 per month.
Credit cards are dangerous because they’re accessible. You can get credit cards with a simple online application, and most people don’t even pay attention to the interest they’re paying on purchases. Some cards carry as much as 35% interest!
3. Get Rid Of Cable TV
Cable TV’s prime is confined to the halls of antiquity. With streaming services, YouTube, and thousands of other options, there’s simply no reason to pay for the costly equipment and services that cable and satellite TV providers have to offer. While your cable bill probably isn’t costing you $500 per month, it’s still taking a huge bite out of your finances.
Opt instead for a cheaper streaming service, like Netflix or Hulu or even Disney+. Each of these services can be acquired for around $10 per month, and even if you got all three, you’d still be spending less than $50/month; a fraction of what your cable or satellite service costs.
4. Consolidate Insurance
If you have individual insurance policies for your cars, home, and life, it’s time to consolidate and quit overpaying for insurance. Most companies actually offer a discount if you bundle with them, and most insurance policies can be fully customized to meet your exact needs.
Call your insurance agent and figure out which services you can bundle with them. You might find that they offer everything you need, and the bundled cost is hundreds of dollars cheaper than having separate policies!
5. Stop Eating Fast Food
Eating out is simple, convenient, and seemingly affordable in the moment. What we often forget is that we’re paying for that extra convenience, not just with our wallets, but with our health and sanity, as well. The average American spends about $3,000 per year eating out. That seems excessive, right? Well, of course, it does. We eat out and pay small amounts each day or every few days, and it never seems like a lot at the moment.
But small purchases add up over time, and eating out is no different. You could potentially shave hundreds off of your monthly expenses by simply cooking in the house and creating a meal plan.
6. Refinance Your Mortgage
Homeowners have a unique opportunity to refinance their homes for a lower rate, potentially lowering their mortgage by a huge difference. Sometimes, you just don’t get the best deal on a loan; maybe your credit has drastically improved, your home’s value has risen, or you simply need a break in your finances.
Speak with your bank to explore options, but don’t stop there. There are thousands of refinancing options available, you just have to know where to look!
7. Use A Budget
How are you supposed to save money if you don’t even know where it’s going each month? Even wealthy people still budget out expenses in order to help them better track and manage their income. You should be doing the same!
The first step to creating a budget is to identify all of your expenses, no matter how minor or insignificant you might think they are. Yes, that means the Netflix subscription and your $2/month magazine subscription.
Track your expenses each month, allocate funds appropriately, and don’t forget to set a budget for everything. This is your hard cap for spending on things like groceries, dining out, etc.