However, if auto-pay causes you to keep paying for items or services you don’t really need or use, it’s no bargain. Putting your regular bills on auto-payment can be a really smart way to protect your credit rating by ensuring you’re never late with a payment. For example, you could be paying for roadside assistance both through your insurance policy and through AAA. Also be sure to examine your policy for “extras” you may not need. If you have a decent emergency fund on hand in case of an accident, one way to lower your premiums is to increase your deductible. But it pays to shop around periodically to make sure you’re getting the best deal. If you have a car, you absolutely must have car insurance.
To know whether refinancing makes sense, you’ll need to add what you’ll spend on closing costs into the calculation of your new monthly payment. If you haven’t examined that loan since you bought your home years ago, it’s quite possible that you could save a lot of money – both now and over the life the loan – if you refinance at a lower interest rate. The biggest monthly expense for many people is their home mortgage. Many people, for example, are surprised to learn just how much they pay for pricey lattes and snacks from restaurants and vendors that would cost a fraction of that amount if they were made at home or purchased at a grocery store. Then break it down even further to ferret out items that are ripe for reducing. Start with major categories, like rent or mortgage, utilities, transportation, meals, clothing, and entertainment. The first step toward cutting expenses is to make a budget, so you know exactly where your money is going. While you are waiting on that raise, here are a few things you can do right now to cut your monthly expenses.
Consider diverting the raise to savings via direct deposit or increase the percentage that you contribute to your retirement account. One way to get lifestyle creep under control is to have any future raises you earn directed into savings.
Ever notice how your monthly expenses always seem to equal whatever salary you’re making, even after you get raises? The phenomenon is called “ lifestyle creep” and it can keep you from reaching all kinds of financial goals, from paying down debt, to saving for retirement.
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