Friday, September 3, 2010

Save $500 A Month By Reducing Big Expenses

Two years after the Great Recession, economic recovery is anemic at best. Though the stock market has managed a remarkable recovery, unemployment rate still hovers around 10%, home sales are languishing and consumer sentiment is low.

Let's not forget about basics of saving money which is to reduce our money expenses.
For those who saw a lower or even zero household income, reducing expenses is a necessary skill.

Here are some quick ways to save at least $500 by reducing some big expenses.

1. Reduce APR’s On Our Credit Cards

Call up your credit card company and ask for a rate reduction. If you have good credit with them, they will drop your interest rate by a few percentage points.

Don't feel shy about asking. If you are being charged an exorbitant 30% for an outstanding balance and in danger of default, the credit card company is actually more worried that you stop paying altogether.

Sometimes, they grant a reprieve period of say 6 months with low interest rates, which lowers your minimum monthly payment by as much as 2-3 times. Although it is temporary, you can always go back to negotiate for another rate reduction. That is easily worth $100-$300 of savings for most people.

2. Modification On Home Loans

Not everyone will be qualified for a home modification and the process is time consuming. The approval process may take up to 90 days, but it could be well worth it in the end. If you loan modification is approved, you can save at least $100 per month on your mortgage.

3. Cable, Phone and Internet

When you are jobless, you can do away with lots of entertainment, like cable and internet. Rather than staying home to watch TV or surfing the net, going for interviews will be more practical. And if you use mobile phones most of the time, just do away with the landline too.

Again you can easily save $50-$100 per month.

4. Consolidate Cell Phone Bills

Look around the internet for providers which allow you to consolidate cell phone bills. Of course, you got to sort out every month the bills and usage between your family members but it is easily $50-$100 savings for the household once you do that.

With the expenses reduced, say $500, you can put more food on the table, invest, pay down outstanding loan (especially credit card debts) or simply save the money for a rainy day.

I think every household can find areas of improvement when it comes to finances. You just have to look hard enough at where your money is going. It’s important though that the money you “save” is not used to purchase extravagant items, like flashy gadgets or fashionable accessories.