How To Save Money Each Month

Benjamin Franklin's proverb "A penny saved is worth a penny earned" has been used many times. It's better to save money each month than waste it.

Although saving money for the future may seem daunting, you can start small by putting aside a little each month. You can do Benjamin Franklin proud and save money every month by carefully reviewing your recurring monthly expenses, figuring out ways to trim those expenses and sticking to a budget. Here's how.

Check Your Monthly Recurring Expenses

To save money, one of the best things you can do each month is to go through your monthly expenses to see where you can trim costs. These are the nine most common monthly expenses. Here are some tips to save money on each one.

1. Housing

Americans spend a large portion of their budget on housing. According to the National Association of Realtors, the average monthly payment for a 30-year mortgage with 20% down payment was $1036, while the median rent in the second quarter of 2020 was $1,045.

If you have a mortgage payment, consider saving money by refinancing your mortgage if interest rates are lower than what you're currently paying.

This will allow you to pay a lower monthly mortgage payment, and it could also save you money over the life of your loan. Renters should consider finding a roommate, splitting the costs, signing a longer-term rental agreement to get a discount, or downsizing to a smaller place. Save Money When You're Broke

2. Utilities

Your monthly utility bill is likely to be the largest part of your electricity bill. How can you lower your monthly electric bill? Unplugging appliances that are not being used, setting your thermostat to a lower power setting and turning off lights that are not needed.

3. Food

It's not cheap to feed yourself. In 2019, the U.S. Bureau of Labor Statistics reported that an average American household spent $372 per month on food made at home, and $288 per month on food prepared in restaurants.

Download apps to save money on groceries. These apps allow you compare prices at different stores and enable you to buy in bulk at Sam's Club or Costco. You can also choose generic products at a lower price. We'll provide more tips on grocery shopping later.

What about cutting down on the cost of dining out? Take a look at these:

• Instead of paying for coffee, tea, or soda, order free tap water.

• You can divide a dish into multiple portions to share.

• Eating out for lunch is usually less expensive than eating out for dinner.

• Restaurant coupons and discount codes.

4. Transport

It costs more to get from one place in the United States to another than you think. According to the BLS, in 2019, an average American household spends $813 per month on transportation costs. This includes car payments and gas. There are several ways to reduce transportation costs.

• Buy a used car instead of leasing or buying a new one.

• To keep your car running smoothly, follow the recommended maintenance schedule.

• To save gas, reduce speeding and hardbraking.

• Tackling simple DIY car repairs.

• Walking or riding your bike whenever possible.

5. Cellphone And Internet Service

It comes with a cost. According to BLS data, the average American household spends $99 per month on cell phone service.

For savings on your phone service, dial this number:

• Get paperless billing and automatic payments by signing up. This could save you several dollars per month.

• Instead of paying monthly for the phone, pay upfront.

• Instead of selling your phone every year for a newer model, keep it as long as possible.

• To see if there are any unutilized features that you can remove, take a look at your bill.

• Switch to another cellphone provider. It's possible to find a lower price with another provider. You may also be eligible for financial incentives.

How about your internet service? Here are some tips to cut costs.

• Stop renting your modem and router. You will likely save money over time by buying this gear and not renting it from your internet provider.

• Compare prices. It is possible to find an internet provider offering similar quality and less expensive services.

• Reduce the speed. A lower internet speed might work just fine and cost less, especially if you are only surfing the web or checking your email.

• Bundling is a great option. Bundling discounts are available if you buy internet and cable TV services from the same company.

6. Clothing

Clothing costs can add up quicker than dirty laundry, regardless of your personal style. According to BLS data, the average American household spends almost $160 per month on clothing and related services. This is according to 2019 BLS data. However, you can adjust your clothing budget to fit a more modest lifestyle by:

• Shopping at thrift shops for bargains

• You are looking for discounts at retailers such as Marshalls, T.J. Maxx and Ross Dress for Less.

• You can buy off-season clothing. You might buy a winter coat on clearance when it turns to spring.

• You can put off buying clothes until they go on sale.

• Avoid expensive, trendy clothes.

7. Insurance

A typical American consumer spends $200 per month on homeowners and car insurance. To lower your insurance costs, the Insurance Information Institute recommends shopping around for coverage by obtaining quotes from at least three insurers. You also can cut insurance expenses by exploring discounts, such as those for bundling policies from the same insurer.

8. Credit card debt

As of May 2020, the average U.S. household carried $5,338 in credit card debt, according to Experian data. How can you ease your credit card burden and also save more each month? Here are some tips:

• Look into swapping higher-interest credit card debt for a lower-interest debt consolidation loan. This will save you money on your monthly payments and the total amount you pay, as long as you don't charge any interest on the credit cards that you pay off.

• Evaluate whether it would make sense to take advantage of a 0% introductory balance trexansfer offer from a credit card company. You can switch to a card with a lower interest rate (annual percentage rates) for a short time. These offers typically require good or excellent credit. Although it may not immediately save you money, paying off debt sooner can help you to have more cash in the long-term.

• For lower interest rates, contact the card issuers.

• If you feel you're in over your head, contact a nonprofit consumer credit counseling agency. They can help you create a plan to repay your credit card debt. The agency may also work with creditors to lower your credit card interest rates.

9. Subscribe to recurring monthly memberships

Subscriptions and monthly memberships that are automatically paid through your bank account or credit card account are easy to forget. If you look through your accounts statements you might be able to identify recurring costs that you can eliminate.

You might have not been to the gym in two years since your New Year's resolution to be healthier. Yet, you still pay $75 per month for a membership. Perhaps you have signed up for six video streaming services, when you could get by with just two.

Apps like Truebill, Trim, Bobby and Subby can help you manage memberships and subscriptions if you're not eager to do it the old-fashioned way.

Make A Monthly Budget

You now have suggestions for how to reduce your monthly expenses. How do you combine them? Create and stick to a budget. Why is budgeting so important? Here are four things budgeting can help with:

1. Living within your means. This means that your expenses will be lower than your income, allowing you to save more each month.

2. Your financial goals. You might imagine retiring at 60, going to Africa to volunteer or to pay off your 30-year-old mortgage in 15 years.

3. Eliminating debt, including credit card balances and student loans.

4. You can save money for an emergency fund, a college savings account, or a retirement fund.

There is no one right or wrong way to make a budget. It is meant to balance the money coming in with what is going out. There are two types of budgets you should consider: the 50/30/20 and zero-based budgeting. You can track your spending which is key to any budget.

• A notebook should be dedicated to your monthly budget.

• Keep track of your income and expenses using a spreadsheet.

• You can download apps like Mint, Pocketguard, Goodbudget or You Need a Budget (YNAB), or log in to Experian and click "Personal Finances".

You Can Save Money On Your Monthly Food Bills

When you are calculating your monthly budget, keep in mind your food expenses. Food expenses can add up, whether you eat at home or in restaurants. These cost-saving tips might be on your list.

• You can cook at home more often and eat out less. A survey conducted in April 2020 found that 58% of Americans said they would continue cooking at home after the coronavirus pandemic.

• At-home meal plans can be created at the beginning and maintained throughout the week.

• Set aside a fixed amount each month to pay for meals out at restaurants, but don't go over it.

• Look out for loyalty programs at grocery stores.

• Consider adding a credit card that supplies generous rewards for grocery shopping.

You can save money on your monthly entertainment and shopping costs

There are many ways to save money while still sticking to your budget. Here are seven:

1. You can get deals from a store by signing up for their text messages.

2. Check if Amazon's price is the lowest. This task can be assisted by Pricepulse and CamelCamelCamelCamel, both price-tracking websites.

3. On holiday weekends, you can visit the store. Many retailers offer amazing prices on certain products during holidays like the Fourth of July weekend or Labor Day weekend.

4. To increase your chances of buying fewer items, choose the smallest shopping basket or cart.

5. Instead of purchasing books, check out books at the library.

6. Be on the lookout for coupon codes and online deals.

7. Enjoy entertainment discounts through membership organizations such as AAA and AARP.

Place Your Monthly Saving Somewhere Safe

You're now smart about saving money. What can you do with the extra money? If you don't already have an emergency fund, this is a good place to start. An emergency fund should be sufficient to cover at least three to six months of your living expenses.

An emergency fund is a way to pay unexpected expenses such as a large medical bill or repairing your car. Putting your money into a high-yield savings account allows you to earn a little more interest on your money than if it were in a typical bank savings account.

If you've already built up an emergency fund, you can turn your focus to saving for purposes like preparing for retirement, putting a down payment on a house, buying a car or taking a vacation.

Conclusion

It can be very rewarding to save money on your monthly expenses. It can help you reduce your debt, set aside money for emergencies, save more for retirement, and ease your financial anxiety. You can enjoy a larger and more satisfying life by creating a budget.