Frugal Friday: Reducing your Fixed Expenses

Frugal Friday Reducing Fixed Expenses

It’s Frugal Friday!  The time when we take a few moments to focus on tips and hints for frugal living.

When we talked about creating a budget, we discussed fixed expenses like your mortgage, car payments, utilities, etc. that pretty much stay the same, and the other variable expenses that can vary depending on your choices.  Those variable expenses, like food costs, entertainment, eating out, clothing purchases etc. can be a good way to reduce your budget by choosing more frugal options.  Even though your “fixed” expenses are more set, they’re not set in stone, and sometimes a simple phone call or internet search can help you save in those areas as well.

Check out some of these options to see if they might work for you:

  • Mortgage: If you haven’t looked at mortgage rates in several years, you might be surprised.  A refinance can save on your monthly payment, but be sure to consider the additional expense of closing costs (which can be pretty substantial).  Also take into consideration whether you’d be extending the length of your mortgage, and how that would factor into your overall financial plan for the future.  Shorter terms (15- or 20-year mortgages) usually have lower interest rates, plus you’re done paying sooner.  If you can reduce the length of your mortgage while keeping your payment close to the same, that’s worth thinking about as well–that’s what we did a few years ago, and it put us on track to pay off our house around the time the kids will head to college.
  • Gas bill: Check to see if your natural gas or propane company has a price-lock option during the warmer summer months.  You may be able to freeze a good rate for a longer period of time, and save money during the winter.
  • Auto and Home Insurance:  Review your coverage and make sure it still works for you.  If your car’s a little older, you may not need as much coverage.  You can also consider raising your deductibles to lower your premium cost (although if you go this route, make sure you have enough in your emergency fund to cover the deductible if something happens).  Check to see if your insurance company offers a discount if you pay in full–we pay our auto insurance twice a year rather than monthly, and it’s a considerable savings.
  • Home Phone, Internet, and Cable: It may surprise you how much variability there is in these areas.  You could consider cutting cable completely, or cut back to a more basic plan.  Do a little research for your options on phone and internet.  There are competitors for local/long-distance home phone providers, and in some areas there are different options for Internet as well (although some of them are bundled with cable/satellite, so that’s a consideration too).  If you get reliable cell phone reception at home, you may consider cutting out the land line altogether.  Some people also use Voice-Over-Internet (VOIP) services at a lower price than traditional phone service.
  • Cell Phone:  Cell phone bills are becoming a larger chunk of family budgets these days, as more family members carry them at younger ages, and our “needs” for coverage increase.  Take a good hard look at your bill, and do some research on plans that might meet your needs.  You might be able to get by with less data if you can use wifi more often, or you could use more basic phones for the kids (they’ll probably survive without the latest iPhone, regardless of what they say! ;) ).  We’ve been very happy with Cricket Wireless over the past year, which has given us all the data and coverage we need at a price we can live with.  Even better, the more lines we add as the kids get older, the cheaper each one is!
  • Car Payment: You probably can’t change your current car payment, but if it’s higher than you’d like it to be, it might be worth looking into whether you could trade into a serviceable, but lower-cost vehicle.  There are lots of considerations here, like how much you owe on your current vehicle vs. how much it’s worth in trade, but it can be worth a look.  If you can pay cash for a lower-cost vehicle and bank your car payment money toward a future car purchase, you can avoid interest costs on a depreciating asset.

Sometimes just a little bit of research and leg work can save you a bundle.  It’s worth checking your options to see if there are ways you can save!  Have you successfully reduced costs on your fixed expenses?  We’d love to hear how in the comments or on Facebook!

If you’re just joining the Frugal Friday series, check out these other posts:

 

Megan has been frugal most of her life, but has been really honing her frugal skills as the chief home economist for her family of six, surviving and thriving on a single (teacher’s!) income.  If she can do it, you can too!

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