One of the problems deterring many people from reaching their financial goals is the rising cost of living. Cost of living expenses are the costs associated with the must-haves in life, like having a roof over your head, utilities, food, and transportation. Some would even include the cost of additional expenses like childcare, healthcare, and taxes as essential costs of living.
It’s no secret that the cost of living, as with everything else in the world, is steadily rising. You might be contemplating moving just to keep your housing costs on an even keel. What if I told you that you don’t have to move back home to lower your cost of living expenses? What if I told you that you didn’t have to move at all?
Yes, it’s expensive to live in today’s world but before you pack up everything you own and head for the hills, consider these three things:
1. Start a Budget
If you’re having a tough time making your money last till the end of the month and you’re not on a budget, you should be. Keeping a budget is the key to knowing where your money is going and can help you cut costs. A budget is not something you can do just one time and forget about. In order for your budget to be effective, it has to be consistent — that means it has to be done every month. Your budget will help you know how you’re spending your money. Not only that, you’ll also be able to determine what you’re spending too much on and where you need to cut back. Once you know this, you can then make the changes you need to save more money.
For instance, if your budget shows that you spend roughly $500 a month eating out and you’re usually in the red about $300 every month, cutting back on eating out could help fix this problem. Why eat out when your budget says you can’t afford to?
It’s not always easy to start and manage a budget, but when you do, you’ll find it to be a great way to help manage your monthly expenses. To get started:
- Make note of any income you receive during the month.
- Start tracking your expenses (every single day).
- Put your expenses into categories.
- Separate your expenses into two categories: discretionary (fixed expenses or bills that have to get paid every month) and non-discretionary (expenses that can be negotiated or may not be necessary).
- At the end of the month, determine if your expenses were more than your income. If they were, you need to determine which non-discretionary expenses to cut back on.
- Each month, adjust as you need to so that your expenses aren’t more than your income.
2. Stop Buying What You Don’t Need
This is another place where budgeting can really help. It’s so easy to spend money when we have it without really considering the consequences. But when you focus on your budget, it helps you rethink purchasing things you don’t need. When times are tough, you need to focus on the necessities and not things that gain you pleasure in the moment.
Here’s an example: if you find yourself buying more at the grocery store than you actually need, consider making a list rather than shopping on a whim. Also, it’s a proven fact that when you go grocery shopping when you’re hungry, you’ll likely pick up all types of food that you don’t need. Save money by making a list and reducing your costs at the grocery store.
As you’re rethinking how you spend your money, think about your subscription packages, especially when it comes to TV. Do you really need all those streaming channels?
Stop buying what you don’t need so you can ensure you have what you do need for your “real cost of living” expenses.
3. Rent Out Your Extra Space
While you’re contemplating your budget and how you spend your money, you can also determine ways to make extra money. There are so many ways to make additional money using your own home. Here are some ideas that spring to mind:
- Take in a roommate
- List a room for rent on Airbnb
- Rent your entire house while you’re on vacation
- Rent your home out as a film set and get paid by the day
- Do you have a large backyard? Rent it out for special events
- Host a foreign exchange student and get paid
- Take in people’s pets by pet boarding
- Have an office in your home? Rent the address out to a business for a virtual business office.
Last but never least, you can rent out storage space in your home with Neighbor. This is a great way to make passive income — getting paid regularly for doing little to no work! If you have extra space in your home that isn’t being utilized, you can list that space on Neighbor. People are always in need of storage space. Why drive to a storage unit that’s miles away when you can rent space at your neighbor’s place down the street? That saves time and money because it keeps your belongings close to home and cuts your storage bill in half. Meanwhile, you earn extra income every month to help offset the cost of your living expenses. Sounds too good to be true? Just read our Neighbor review to learn more.
The Bottom Line
Look, I get it! Times are hard, and everybody’s looking for answers just to keep their head above water. You’re not alone. Make it your business to implement at least one of these three suggestions and you could see some real cost savings. Implement all three and it could drastically change the amount of money you have left at the end of the month.