One of the key components of a debt management plan is to not only control, but to reduce your fixed expenses. A dollar saved is as good as an additional dollar for you each month. Anyway in most cases, you are buying more than you need to on many items. For example, restaurants often sell us meal sets when all we need to fill our stomachs is a pizza. With a meal, we end up paying for drinks, drumlets, cheese fries, etc. Here are some prime targets to reduce your spendings on.
1) Downgrade or sell your car
It is not a joke when financial experts say that a car is a liability. You pay a fixed amount each month for the luxury of seeing it depreciate in value as time goes by. In additional to that, there is the auto insurance to comprehend, parking fees and fines to stress over, road tax, and the always increasing price of gas. Your car could be the single item you need to eliminate to free yourself from the tight grip debt has on you.
2) Downgrade your house
You might have bought a huge house years ago because of your children. Now that they have gone out on their own, you might not really needs such big a space anymore. The burden of housekeeping can be a real headache anyway. If you are willing to downsize to a smaller house, you can easily pay off whatever your debt with the cash surplus you will receive. Even if you have no debt, the additional cash will come in useful for your retirement vacations.
3) Cancel recurring membership charges
One of the expenses that I really hate are those membership-type of subscription charges for usage of things like software or facilities. A club membership is one such example. Why pay such a high price each month when you hardly use the facilities? If you use the facilities once a month, you are the favorite type of members that the business wants. Cancel them. You can sign up again in future when you are financially more healthy.
4) Increase insurance deductibles
It can be somewhat irresponsible not to get any insurance for yourself or your family members. But they can sometimes be very costly. But not many people know that they can sometimes drastically reduce their insurance premiums just by increasing their deductibles. This would mean that you have to make more payments when you make a claim. So there are pros and cons for this. Do take this into consideration when you need to reduce your fixed expenses.
5) Downgrade or completely cut off cable
We often end up with channels on cable that we are not remotely interested in. This is because they come in a package. This is one of the ways how corporations upsell us with things that we do not need. Downgrade to a more basic plan or cancel cable altogether. This can potentially save you quite a significant sum each month.
6) Downgrade your mobile plan
Do you really need such a huge data plan when you are already on a wireless network at home? Even on the most exhaustive months, I used up only about 20% of the data in my data plan. This means that I’m wasting my money away on data that I’m not using. Hardly a clever move right? Go for a plan that is more suited to your usage requirements.
7) Cut down on your vices
Cigarettes and alcohol is the type of expense that we often don’t keep track of. They are usually something we classify as essential items for basic living. But if you are to put the numbers together, you might just get the shock of your life in finding out how much is being spent on them. Quitting can be a little drastic especially when they have been your best friend for years. But surely you can cut them down.
8) Save on petrol
It is not difficult to find petrol engineers claiming that all forms of petrol for vehicles are the same. It is just a matter of perception. So stop pumping premium brand petrol into your car and get the normal ones. Also don’t forget to make use of coupons and credit card perks when paying for gas.