Some readers have probably had budgets for a while, but might have updated them to reflect resolutions for the new year (no more eating out for lunch, joining a gym, etc). But before you pat yourself on the back for your brand new budget, do one last thing: question everything.
Why? It’s a great way to reduce your expenses. Let’s take a look at how.
Set in Stone Expenses
Don’t lie. You read that introduction and thought to yourself: “But some expenses are set in stone. I can’t question everything”. Hear me out.
Let’s say you have a huge mortgage and you just bought the house. You know that selling the house now would mean that you would lose money after closing costs are paid, so you think you are just stuck with the mortgage. However, you can investigate lowering your mortgage interest rate or effectively lowering the mortgage by renting out a room.
Pay Off Debt
If you have the means to do so, you might look into just paying off some bills, saving yourself extra interest payments. That might be the case with an auto loan, credit cards, student loans, or some medical bills.
Investigate the pay off terms to see if you have to pay any early payment penalties, but even if you do, weigh whether or not you can save money. If the pay off penalty is one payment, but you would save the equivalent of two payments in interest, it’s still a good deal.
Negotiate Your Bills
If you can live with the decision to cut cable, then call your cable company, and be prepared to terminate your service. They are bound to offer you a customer retention package, good for at least six months.
If you’re not happy with the offer, proceed to negotiate, and if all else fails, terminate the service.
Be More Aware
For expenses like groceries, utilities, and gas, you end up questioning yourself. Do you really need to take two separate errand trips on Saturday, or can you combine them with your weekday commute and save gas? Do you really need that bag of potato chips, or is that an impulse buy? Do you really need to let the water run for 10 minutes before you get in the shower?
The gains you make in these areas could challenge you to further question your expenses.
For any bill where you have access to multiple providers (insurance, for example), shop around for the best deal. And while you’re at it, question the insurance values that you carry – for example: can you raise the deductible to lower your premium?
Questioning everything doesn’t mean that you will make cuts in every single category, but by going through this exercise, you can ensure that you won’t leave money on the table. If you find extra cash in your budget, be sure to use it wisely by paying down debt or investing.
How much money did you find when you questioned everything?