A lot of us like to think that we’re a lot savvier with money than we really are. Call it selective blindness. We think of those moments that we make sensible moves with our money to justify our impression of our financial smarts, forgetting the “little” costs that crop up here and there. There are opportunities to make savings and to get frugal without too much sacrifice that we miss every day. If you’re almost always confronted with a bank balance that contains less than you inspect, here are a few ways you might help the reality fit your expectations.
You haven’t really factored how much you spend
Whether you’re looking to cut costs, save for a loan, put aside an emergency fund, or to reach any kind of financial aspiration, the first and best step is to budget. Coming up with a comprehensive budget by looking over your past expenditures is going to help you become a lot more aware of where your money is really going. You’re going to see grocery costs higher than you expect, realize how much your utilities and insurance packages really take out of your take-home money, and see where you can start finding the opportunities to put aside more. Starting a budget is the most important step for anyone looking to get more disciplined with their finances.
You’re forgetting some of your regular costs
Because they come out automatically, it’s easy to forget some of your costs. We’re constantly faced with utility bills and the awareness of our insurance, so few people forget about those. In modern society, what people tend to forget about are the digital subscription services that they sign up to. Some might include subscriptions to online papers, streaming services, eBook packages and credit reporting services. It’s worth taking a long look over the past three months of your bank statements to see any recurring costs that you’ve forgotten about them. Many people tend to stop using these subscription services without canceling them, meaning they’re wasting money every month. Every now and then, take a “bills day” to yourself where you hunt out those hidden costs and get rid of the ones you can no longer justify.
You don’t take the time to find the best deals
There is almost always a better deal out there. Whether it’s for a one-time purchase or for a long-term financial agreement you’ll be bound to for some time. For loans, like a mortgage or an auto loan, for instance, working to repair your credit is going to help you find a much better deal. If you fit a certain category, like a first-time homeowner or a veteran, you can get agreements suited specifically for you that often offer better terms. Similarly, insurance is an important financial consideration, but not enough people shop around and take the two minutes for an auto insurance quote that could help them find a package that’s more suited to their finances. Don’t fall for the fear to get insurance immediately, take your time, look at different providers, collect quotes, and consider which parts of the package you actually need or if you can remove some clauses that would reduce the overall costs.
You’re not tackling your utility bills
A lot of people accept utility bills as a given. They think that these are just the standard costs of living so there’s not much point to trying to reduce. That is, of course, highly erroneous. There’s a lot you can do to reduce your electric bill, to pick just one out. Making some small investments like installing dimmer switches and ceiling fans can cost a lot less than the alternatives. Picking up some energy saving habits, too, like remembering to switch off appliances at the plug can immediately cut out “phantom loads”. These phantom costs contribute to a shocking 75% of a lot of home appliance electricity consumption.
You’re not curbing your impulses
Sometimes you need a treat, whether it’s a nice meal out or a day for you and the kids to enjoy an attraction or day-trip. However, these treats, like all other expenses, should be planned. “No” is one of the most powerful words when it comes to controlling your finances. Curbing impulse expenditures are crucial to maintaining a budget. This includes preparing shopping lists in advance and making sure that you don’t neglect to pick up any items, reducing the risk of picking up a little extra, too, when you go to get what you forgot. For bigger luxury items, it’s a good idea to always give a purchase 24 hours before committing to it. That gives you plenty of time to decide whether it’s really worth the cost.
The point is to never be complacent. There are always habits you can curb, expenses you can cut out, and better deals that you can make. Be hungry for savings and you will find plenty.