Warning: session_start() [function.session-start]: Cannot send session cookie - headers already sent by (output started at /usr/www/users/csnell/budgetways/wp-content/plugins/byob-thesis-simple-header-widgets/byob-thesis-simple-header-widgets.php:55) in /usr/www/users/csnell/budgetways/wp-content/plugins/easy-contact/econtact.php on line 112

Warning: session_start() [function.session-start]: Cannot send session cache limiter - headers already sent (output started at /usr/www/users/csnell/budgetways/wp-content/plugins/byob-thesis-simple-header-widgets/byob-thesis-simple-header-widgets.php:55) in /usr/www/users/csnell/budgetways/wp-content/plugins/easy-contact/econtact.php on line 112
First Three Bills You Should Cut

First Three Bills You Should Cut

The basis of a budget is elementary: spend less than you earn. Spending can be divided into two types. Fixed costs are those that must be paid every month, the same amount or approximately the same. Variable costs are just that, unpredictable and varying from month to month. However, some of your bills might not be as fixed as you might think. If you’ve trimmed the fat from your budget and overlooked monthly bills, writing them off as “fixed,” you’re missing out on an opportunity for savings. Here are the first three bills you should cut to balance your budget.

1. Cell Phone

While you probably won’t rack up a $201,000 cell phone bill, you’re likely still paying too much. Data, apps, and overage charges on top of your regular bill aren’t so smart for your budget. For starters, consider the accessories and peripherals for your phone; cases, covers and chargers add significantly to the overall cost. Buying them where you buy the phone is convenient, but the same items likely cost less online or from a third-party outlet.

If you’re new to smartphones, monitor your data usage and find the plan that fits your habits. A service like BillShrink can help you navigate the maze of plans, terms, conditions and fees. If you use only a small amount of data, you could save money by switching to a less expensive plan, but once you’re over your data, the charges can pile up like unread emails in your inbox that you can’t access without incurring more charges. To reduce your usage without sacrificing productivity- or Angry Birds- be sure to take advantage of free wi-fi hotspots. It seems obvious, but according to a Nielsen survey, only half of smartphone users access free wireless internet connections in a given month. Some apps eat up data even when you’re not actively using them, so you may need to proactively turn off GPS or other background apps and disable automatic updates. Ironically, there’s an app to help you locate and turn off vampire apps: Advanced Task Killer.

save money by cutting these bills firstPaying for cell phone insurance? Don’t. Insurance is meant to guard against catastrophic loss and protect what you can’t afford to replace, like your home. If you can’t afford to replace your phone, you overspent on it. Consumer Reports recommends keeping your old phone and reactivating if your new phone suffers an untimely death; use it until you qualify for another free or reduced-priced phone.

If you travel overseas, plan to change to an international plan or turn off your phone completely. You could be charged international roaming fees just for having your phone on, in addition to fees for incoming calls and texts. Most carriers allow you to change to an international plan on a month-to-month basis, so there’s no reason to rack up a huge bill in roaming charges.

2. Heating and Cooling

Depending on your choice of location, heating or cooling bills (or both) can burn a hole in your wallet. Regulate your temperature and your monthly bill by preparing your home and getting smart about utilities. To keep out winter’s chill, make sure your home has adequate insulation, an investment that pays for itself many times over. Cover old windows that leak heat with plastic kits available at home improvement stores. Even a fix as simple as a rolled-up towel on the sill or at the base of a door can make a surprising difference in the average temperature.

Find your lowest comfortable temperature and set your thermostat. There’s no reason to shiver to save money, but you may not even notice one or two degrees of difference, and one degree means two percent savings on the heating bill for the average house. Nighttime is perfect for lowering the temperature further because body temperature actually drops to prepare for sleep.

For those in warm climates who would like to chill out, there are options besides running the air conditioner like a marathoner’s daily workout. Dehumidifiers and ceiling fans will make your home environment feel more comfortable; just be sure to turn off fans when you leave the room, since they’re only moving air across your skin, not actually lowering the temperature. Don’t overlook the amount of heat generated in the house either. The oven, dishwasher, dryer and electronics all produce heat, so turn off electronics not in use, use the air dry setting on the dishwasher and consider hanging clothes out to dry. Closing curtains and planting shade trees on the south and west sides of the house can reduce the solar heat entering your home.

Whether heating or cooling, don’t pay for rooms you don’t use. Close vents and doors for spare bedrooms or rooms used primarily for storage. Well-maintained systems run more efficiently. Clean filters regularly and consider an annual inspection for your furnace.

3. Home Mortgage

This week’s market rate for home mortgages is 3.62 percent according to Bankrate.com. If your mortgage interest rate is a point or more higher, you would likely benefit from refinancing. A lower interest rate is a no-brainer for savings, and if you can afford a higher monthly payment, you could even shorten the term of your loan from thirty years to twenty or fifteen. The savings from refinancing can make the higher payment affordable, and repaying the loan sooner means huge savings in the long term. However, if you don’t feel confident in your job security or if your income is variable, taking on a shorter-term loan is risky. You can always make extra payments on a long-term loan, but you don’t want to fall behind once you’ve committed to the more aggressive repayment option.

Now you’ve begun to master cutting expenses that you thought were fixed and saved money without major sacrifice. All it took was a few changes of habit and a little legwork. It’s a valuable skill that will serve you well financially. Keep honing your skills and maybe you could take them to Congress and teach a lesson there.

{ 5 comments… add one }
  • GSBryce November 16, 2012, 6:22 pm

    More great advice! I have actually been looking to cut a few of our bills and our wireless bill is one of them. Such a killer every month! I sit here and think, what did we do before cell phones? We had more spending money that’s for sure. I am also looking to cut our cable bill. I am interested in getting a Netflix or Hulu subscription. They both cost the same but I honestly don’t know the difference. Does anyone have a preference on which they like the best and if the cost increases as you go?

    Reply
  • Karen May Jones November 16, 2012, 7:13 pm

    Hi, when our household downsized due to a relationship snafu, the first thing I had to let go was the cable television. It was costing over sixty dollars a month.

    I kept my internet up and running and switched it to a “lite” package. I put our second PC in the living room and the kids barely missed the cable tv :).

    The things you mentioned to cut, of course, are big fish that I wasn’t exactly involved with at the time, except for the heat bill – and I learned to seal up every little nook and crannie!

    Thank goodness I owned my mobile home and had it paid off. Losing an income can really upset the budget.

    Reply
  • vivi November 19, 2012, 11:33 am

    This has been a great learning experience so far i am learning how to make budgets and now with this article i have learned on how to save a little money on cell phone and heating/cooling the home. Thank you very much for the tips and advice times are getting hard so i am looking for any way to learn how to save more and make a budget for me and my family thank you again for sharing i can’t wait to see how much i save from what i learned 🙂

    Reply
  • LoveSanta November 26, 2012, 12:05 am

    It amazes me to watch teens in particualr with mobile phones – they must run up some incredible bills (to me, even a $50 plan for may calls is extremely expensive for anyone who doesn’t need it for business!) I use landlines or VOIP whenver possible to keep call costs down, too.

    We have planted fruit trees outside our north facing (yes, north facing as I’m in the southern hemisphere!) office so we get summer share for cooling and winter sunshine for warming.. Investing in good curtains can make a huge difference in ehating and cooling, too.

    I refuse to pay for TV so we don’t have that expense. Especially now with so many shows avialbel on line anyway, why bother?

    Reply
  • amhamilton July 15, 2013, 6:38 pm

    I have been trying to get my husband to lower the cell phone bill but he is such a tech snob that he wont change anything!! We dont have cable but we do have Netflix way cheaper than cable.

    Reply

Leave a Comment