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Your bills are excessive! And for what purpose? Because you’re afraid of living on less money? Living on less does not imply living on the bare necessities. It doesn’t even imply skimping on the things you enjoy.
We need to save more than ever in these difficult economic times, but we also don’t want to be miserable! So, how do we do both?
Well, that’s one of my missions as a money and finance writer– I’m not really into extreme frugality. To that end, here are 10 effective ways to save money during a recession while sacrificing little in terms of quality of life.
1. Reduce Your Cellphone Plan to the Bare Minimum
Downgrading your cellphone plan to the bare minimum is a quick and effective way to cut costs during a recession, especially if you own your phone. Consider this: if you have WiFi at home, how much cell data do you really require?
If you’re willing to limit your mobile data use, providers like Google Fi or Mint Mobile can reduce your monthly cost to around $15-$30 per line. Again, if you’re mostly at home and connected to WiFi, it shouldn’t make much of a difference.
2. Quickly Reduce Your Electric Bill
Do you want to save money on electricity? It’s actually quite simple with ElectricityRates.com.
Here’s how it works: you probably have multiple power companies in your area, and their rates vary. Simply switching to a different power provider with a lower rate (no interruption of power/no reduction in quality) will result in a permanent reduction in your electric bill.
3. Stop overspending on groceries
Groceries are one of the simplest monthly expenses to reduce. The average family spends $800 per month on food, and according to a recent survey I read, many millennials spend $400 per month on food and restaurant outings.
If you spend $400 per month on groceries and restaurant outings for one person, you can easily reduce that to $300 or even $200. Saving $300 per month can add up to tens of thousands of dollars in retirement savings later in life.
4. Read books on personal finance
Personal finance books can help people learn about topics that may appear intimidating or foreign to them.
Having the necessary personal finance information is critical to achieving success and gaining control of your money.
5. Schedule Meals Around Sales
Another great way to save money this year is to plan your meals around what’s on sale at your local grocery store. Check the store circulars on a regular basis and base your weekly meal plan on the loss leaders (items on the first page).
Grocery stores place the items with the greatest discounts on the front page of their weekly sales circular in the hopes of attracting customers to spend money on other items. When you find a good deal, stock up and use it as the basis for your meals.
6. Save Your Tax Refunds and Windfalls
Unexpected refunds or windfalls, like bonuses, can feel like free money. It’s easy to blow through cash and have no idea where it went. It’s important, just like with a bonus, to put your money where your values are.
Set aside some money for something enjoyable. The remainder should be saved or used to fund a larger goal.
7. Reduce Your Eating Out
Eating out can be an expensive habit, costing hundreds of dollars per month. While you don’t have to stop eating out entirely, there are ways to eat smarter while still having fun.
When going out to eat, drinks can be very expensive. Order water with your entree instead of a drink. Offer to split an entree with a friend or take half of it home for later consumption as leftovers.
Spend your money on dining out with friends rather than rushing through the drive-through on your way home from work.
8. Make a shopping list
Making and sticking to a shopping list is an easy way to save money. Use your meal plan to determine what groceries you’ll need for the week. Check your fridge and pantry to see if you’re missing any staples.
Create a shopping list based on what you require and take it with you when you go shopping. Only buy what’s on your list so you can improve your shopping trip planning.
9. Make Use of Coupons
Coupons have a bad rep, but they are an excellent way to save money and live on less. Instead of clipping coupons for things you think you might need, turn the concept on its head.
Make a list of everything you need to buy and look for coupons that match. This way, you’re not wasting money on items you don’t need just to save a buck or two. Also, do a quick search for coupons before making an online purchase.
10. Learn how to make passive income
Passive income is a fantastic resource to have at your disposal. Passive income is defined as income that is generated repeatedly (even while you sleep). You can do this by investing, house hacking, or making money online.
Bottom Line
Living on less money does not have to imply deprivation. Being frugal allows you to align your spending with your values and direct your money toward the things that are most important to you. Use your savings to fund large goals such as a large purchase or an emergency fund.
Spending less gives you options and can provide you with a cushion if you lose your job. You’ll sleep better at night knowing you have some wiggle room in your budget and money in the bank.