By Robert Stitt
Saving money is hard. Who couldn’t use some extra cash at the end of the month? Yet, you can only work so many hours, there are certain bills that must be paid, and everybody has to eat. Where is this extra money going to come from? While not everybody has padded their expenses, most Americans have a fairly large amount of discretionary income, although they may not always view it as discretionary. After all, one man’s excess is another man’s necessity.
Let’s look at three ways most people can cut their monthly expenses.
- The latest USDA Center for Nutrition Policy and Promotion report states that the average American family of four spends just under $1300 a month on groceries. Teri Gault, founder and CEO of TheGroceryGame.com believes that much of that food is overpriced. “When shoppers buy only their weekly needs, they are forced to pay full price for 50 percent to 80 percent of what goes in their cart.” What does Gault suggest? Shop sales and stock up on non-perishable items or those which can be safely frozen. His research suggests that an average family of four can save over $500 each month just by changing their grocery shopping habits.
- Use balance transfers to lower credit card interest rates. A survey of consumer finances by the U.S. Federal Reserve found that the average credit card debt in American households is roughly $5,700. A decent interest rate on an average credit card is around 15 percent. Over a year, a person with an average of $5700 in debt will pay $855 in interest. However, the average balance transfer fee is only 3 percent for anywhere from 12 to 18 months. The interest paid on the transfer is just $171. If you only got a reprieve of one year, you would still have saved $684. The savings is even greater at 15 or 18 months.
- Lose the home phone. Most people do not need a landline. Just under 50 percent of American households have already gone landline free and depend solely on their mobile phone. With the pay-as-you-go plans available, big savings can be found by cutting the cord. In fact, the U.S. Department of Labor’s Consumer Expenditure Survey suggests a person would save around $30 a month.
If the only thing you do is adjust your shopping, lose the landline, and transfer your high-interest credit card debt to a promotional APR, you should find yourself with a substantial windfall at the end of next month. What you do with it…that’s entirely up to you.