If you sometimes (often? always?) struggle to make ends meet, you’re not alone. According to a recent CareerBuilder survey, a whopping 75 percent of Americans live paycheck-to-paycheck. And minimum wage-earners are not the only ones who wonder how they’ll pay all of their bills. In fact, just under half of those earning $50,000 a year have the same worries at least some of the time.
It’s not frivolous spending that devours most of our paychecks. It’s not even common debts such as student loans, credit cards or medical bills.
The U.S. Bureau of Labor Statistics Consumer Expenditure Survey lists the top five expenses as housing, transportation, taxes, household costs and food. These essential costs consume 63 percent of the average budget in the United States.
Obviously, you can’t avoid these expenses. However, you can take steps to lower them. Here are some simple ways to save on these budget busters and help your money last as long (or longer) than your month.
The average American household spends 16 percent of their income on housing. Depending on where you live, affordable housing may be difficult to find. Even if you cannot find a cheaper place, you can save on rent or mortgage payments, even in the most expensive locations.
If you own a home, check into refinancing your mortgage. Shop around for a lower rate on homeowner’s insurance. Appeal your property tax assessment if you feel it’s too high.
Renters, on the other hand, might actually save by buying a home. Have an extra room? Consider getting a roommate in order to reduce your expenses. Just be sure to check with your landlord before adding a new tenant.
On average, we spend 14 percent of our earnings on transportation. Considering the costs associated with owning a vehicle—even if it’s paid for, your costs include insurance, gas, maintenance and repairs—public transportation, walking or biking may be worthwhile alternatives.
If you opt to drive, save on gas by driving sensibly (practices such as speeding or rapid acceleration can drain the tank quickly), carpooling and making sure your tires are properly inflated.
Other ways to cut back on transportation expenses include shopping for cheaper insurance and performing DIY maintenance to prevent pricey repairs.
Twelve percent of the average American’s income goes to the government via personal taxes (other taxes, such as property and sales tax are not included in this figure). You might think this expense is unavoidable, but there are ways to lower taxes that you might not be aware of.
Putting money in your 401(k) allows you to invest for your future and reduce your taxable income. Finding out how much your employer matches (free money!) and increasing your contribution to at least that percentage can help you cut your tax bill and secure a nest egg.
Talk to your company’s HR department to find out about other tax break perks, such as childcare reimbursement, educational assistance and a medical flex savings plan.
4. Household Costs
Chances are good you spend about 11 percent on utilities and other expenditures related to living in and maintaining your home. The good news is that you can slash these costs whether you are a renter or a homeowner.
Energy-efficient light bulbs last 6–10 times longer than their traditional counterparts and they consume less electricity to boot. Another way to lower your electric bill is to unplug electronic devices and even chargers when not in use. Plugging them into a power strip with an on/off switch makes it even easier to disconnect these devices.
Take shorter showers, turn off the faucet while brushing your teeth and only run the dishwasher with a full load to cut water costs.
Finally, the average American family eats about 10 percent of their monthly wages. Along with old standbys such as cutting coupons, shopping sales and sticking to the perimeter, you can employ numerous creative methods to help you reduce your grocery bill.
Start by eating at home. Skip the coffee shop in the morning, the drive-through at lunch and the takeout for dinner. A recent report by the USDA shows that restaurant prices continue to increase while the cost of groceries has actually dropped.
Other ways to save on food include shopping at farmers markets or co-ops, starting a kitchen garden and making a meal plan to avoid wasting what you buy.
With a little awareness and a good dose of creative thinking, you can create an above-average budget and stop living paycheck-to-paycheck.
[h/t: AOL Finance]