Ways to Reduce your Cost of Living

The cost of living seems to be continuing to rise for everyone even with the unemployment rate rising. How to manage on a limited income is a question many people find themselves facing. Below are some strategies to help lower your cost of living. 

Large Ideas

These ideas are for people who need to drastically reduce their cost of living. 

Down size your home: While this is not an option many people like to think about downsizing your home is one of the greatest ways to reduce your cost of living. Not only will your payments each month be smaller (may it be rent or mortgage) but downsizing will typically result in lower utility bills. 

Down size your car again: This is not an option that many people like to consider, but downsizing your automobile can make a drastic impact on your monthly bills. As gas prices continue to rise, it no longer makes sense to purchase a large sports utility vehicle or truck, instead consider choosing something more fuel efficient. When search for a more fuel efficient vehicle remember to weigh the cost of the vehicle with the potential savings. For example a Toyota Prius starts at $23,520 (51/48) while a Toyota Yaris starts at $14,115 – basically $10,000 dollars less. The Prius’s MPA is 51/48 while the Yaris is 30/38. You need to consider whether or not you will actually save $10,000 in fuel over the car’s lifetime. 

Refinancing: Interest rates are very low at the moment, with many banks having rates as low as 4.125 percent. This is a good time to consider refinancing any loans that you have, and also consider locking in those low interest rates instead of choosing an adjustable rate. 

Smaller Ideas

Coupons: With the success of shows like TLC’s Extreme Couponing, coupons have been receiving a lot of attention in the media. You do not have to spend the hours that the show depicts clipping and organizing coupons. By simply picking up your Sunday paper and clipping the coupons for products that your would normally purchase you will begin to save money. Also take advantage of store discount cards and digital coupons that you can load directly to your card at stores like Kroger. Also remember that there are coupons for places other then the grocery store. Most retail stores and restaurants offer coupons. These coupons can be found either on the company website or through deal websites like retailmenot.com.

Adjust your thermostat: By turning the thermostat up a couple of degrees in the summer and down a couple of degrees in the winter, a lower heating/cooling bill can result without you noticing much of a difference. 

Conserve energy: It is a good idea to conserve energy just to better the environment, but conserving energy can also result in lower utility bills. Keep simple rules in mind: Turn the lights off when you leave a room. Take shorter showers. Do not leave the water running when you brush your teeth. Do not leave the television or other electronic devices turned on when not in use. Consider line drying your clothes instead of using the dryer.

Reduce unnecessary expenses:There are several unnecessary expenses that most families do not realize they have each month. At the top of this list typically is eating out. Eating out just a couple of times a week can quickly add up. If your family typically eats out four times a week try replacing two of those meals with home cooked meals. Also try reducing unnecessary entertainment expenses. Instead of going out to the movies try renting a moving and inviting friends over. Instead of going bowling try having a bored game night.

All these tips should help to reduce your cost of living. The best way to reduce your personal cost of living is to be aware of your monthly expenses and separate your needs from your wants. Don’t hold yourself back from indulging all the time, but keep in mind the bills that must be paid before spending money on your wants.