The average American household spends over 90% of their income on goods, services, or taxes. However, once interest payments on debts and credit cards are included, there is not much left on the budget for most to save or spend on emergencies. Keeping your household budget in good shape is important so that you can pay your expenses, maintain your financial health and even build your financial wealth.
1. Reduce Utility Bills
Housing constitutes the biggest expense of a household. This will include mortgage payments plus interest rates or rents, utilities, furnishings and appliances, and property taxes. On average, households spend nearly $1,500 for housing costs and maintenance according to Value Penguin. Fortunately, there are some ways to cut on housing expenditures.
Provision Power & Gas recommends reducing utility bills by adjusting thermostats to save on heating and cooling costs. Insulating windows, using power strippers, shifting to energy-saving LED bulbs, and sealing windows and doors can lower consumption. The savings that you get from energy reduction can be pooled towards paying more of your principal loan and reduce the payback period.
In addition, you can also switch to energy-efficient appliances if yours are too old. Before buying new furniture, first see if you can repurpose them. Especially if you’re already good at DIY projects.
2. Give Your Family Car a Break
On top of the cost of vehicle acquisition, you will also end up paying for recurring expenses such as gas, insurance, road taxes, repairs, maintenance and other transportation costs amounting to more than $9,000 a year. If you’re a two-car household, see if getting by on one vehicle will work for the family. For some, it’s even possible to ditch the car altogether and stick to public transportation.
For short distances, walking or cycling is not only healthy and burns calories, but you also save money on gas and reduce your carbon footprint. Groceries can be ordered online and if you really need a vehicle, you can hire one for a day just to do your bulk shopping or go on an excursion with the family.
3. Rethink Your Food
Food represents another category of expenses that depletes the household budget with average spending at $550 a month. Reduce dining out or take-out meals and prepare healthy meals at home. You also don’t need to eat meat every day which is expensive.
Consider chicken and turkey which cost less and are healthy. Go for fresh fruits and vegetables, check produce that is on sale and keep an eye out for specials of the day, week, or month in the supermarket.
Stretching your household budget is not that difficult if you know what your biggest expenses are. Once you have identified them, it is a matter of reducing, substituting things and doing or living well with less.
For more great family tips and content, check out the other blogs on Cyber Parent.