By the end of 2020, the U.S. household debt increased by $87 billion to $14.35 trillion, according to the New York Fed’s Quarterly Report on Household Debt and Credit.
If you think about it, you can stack every one-dollar bill of this amount all the way to the moon and back.
Household debts have always been a pressing concern for most American households. However, it had always been overwhelming for most people to decide which household expenses to let go of. We are used to living in a certain way, and the idea of cutting back on what we think are essentials is incomprehensible.
Furthermore, most people believe that carrying debt is completely normal — though it should not be.
To achieve financial goals, cutting back on expenses should be accompanied by a change in mindset. By making the right cuts and removing financial burdens, you can finally achieve the financial freedom you have always wanted.
To guide you, here are some household expenses you should consider slashing starting now.
- Traditional Cable
These days, you have plenty of alternative television options such as Netflix, Hulu Plus, and Amazon Instant Video. Pricey cable bills can be completely removed from your monthly budget.
Admittedly though, it can be difficult to part ways with cable. After all, most of us have grown up having it. But if we really want to keep our expenses low, cable services should be done away with.
However, you need to be careful in choosing the best streaming service your family needs. Otherwise, you might end up spending more on any of these alternatives than you were spending on cable.
- Unused Membership & Subscriptions
Are you currently paying for a membership or subscription you have not used for a long time? If so, then this is your opportunity to cut back on those.
According to a 2018 survey, 84 percent of U.S. citizens underestimate how much they pay for subscription-based services. Most people assume they are only spending more or less $79.74 a month. However, the actual cost is closer to $238 per month.
Now that is a lot of money. Imagine how much you can save if you do away with those memberships and subscriptions.
- Landline Phone
Cell phone plans are cheaper these days. In fact, a lot of families have completely opted to drop off their landlines and switch to cell service instead. But if your household needs to maintain a landline, care to shop around to compare prices to get a better but lower-priced plan.
- Credit Cards with Annual Fees
Credit cards with annual fees are tough on your budget. In fact, it is one of the first few household expenses you should consider immediately cutting off. Opt instead for a different card with a lower interest rate and no annual fee.
But even low-interest-rate cards still mean additional expenses.
Though credit cards come in handy if you do not have cash on hand or something, balances can quickly add up. What you can do is temporarily freeze your cards so as not to allow purchases.
- Cleaning Services
Because of our busy schedules, most of us would rather have someone else do menial tasks for us, like cleaning the house.
Housekeeping or maid service can be pretty expensive, especially if you are getting one from an agency. However, you can save up the money for this expense to create a monthly calendar schedule and assign cleaning tasks per week.
Doing your laundry, vacuuming the floor, wiping windows, and taking out the trash by yourself not only allows you to save on cash but also gives a sense of accomplishment.
And if you really need an extra hand, there are always smart solutions available like vacuum robots. Is your current one busted? Have your Roomba repaired instead. It still is much cheaper than hiring help.
- Eating Out & Meal Deliveries
Everything is instant these days. That includes our meals. The younger generations — millennials and gen Z-ers — tend to spend a lot of money on coffee shops, takeouts, and eating in restaurants.
If you actually check your bank statement, you might be shocked to discover you have spent at least $800 a month on eating out alone. The same thing goes with meal subscription boxes. Though they might be convenient, it costs a lot more than buying the ingredients yourself and looking for similar recipes online.
Take time instead to prepare your own meals and coffee. Pack lunches to work and make your own coffee at home. You will be surprised how these small life hacks could significantly change your savings.
Track Your Spending Habits
When cutting on your spending habits, the first thing you need to do is figure out where your money is going. Tracking your spending over a month or two is an eye-opener of how much you are actually spending and what items you are spending on.
Doing these allows you to make a more informed decision on what expenses to cut back.
Meta title: Expenses in Your Household You Need to Cut This Year
meta desc: Cutting on some monthly expenses can make a huge difference in your savings. Here are some household expenses you ought to consider slashing off this year.