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When I analyzed my expenses with an eye to saving money, I realized that most of my income was spent on housing, heating, eating and getting to work. If I could cut my costs in each of these categories, I knew I would have a lot more money left over for enjoying life in my spare time. Here are the steps I took over the last four months for an overall savings of $1,312 a month.
Refinancing My Mortgage
When mortgage rates slipped below 4% for a 30-year fixed mortgage I decided to refinance my home. But since the average home sale price in my neighborhood dropped from $570,000 to $450,000, I was concerned that my mortgage would be underwater. I learned, however, that The Making Home Affordable government program made it possible for me to refinance my home and cover the closing costs in the loan, even if this required me to borrow more than my home was wroth. In consequence, I was able to cut my mortage by $397 a month.
Cutting My Heating Bill
Taking advantage of a rebate offered by my utility company, I increased the insulation in my roof at a cost of $500 (after the rebate). As a result, my home no longer needs to be heated on days when outside temperatures are above 55 degrees. In addition, I no longer heat the entire house at night. Instead I keep the bedroom door closed and heat the room locally. My winter heating bill has dropped by an average of $85 a month.
Reducing My Household Grocery Bill
With our son living in college, we are now a family of two. Even so, I've switched to buying food in bulk twice a month. I freeze meat, poultry, frozen vegetables and baked goods in a deep freezer to keep them fresh. And I shop for limited organic produce directly from local farmers. This has cut my monthly grocery bill by $655 a month.
Saving on Fueling My Car
I've taken four steps to cut the cost of fueling my car. First, I invested in a $10 gadget that allows me to check my tire pressure. Now I keep my tires inflated to the manufacturer's recommended PSI. Second, I accelerate more slowly, trying to keep the engine RPM gauge from going into the red zone. Finally, I commute to work with a co-worker four days a week, leaving me Friday for running errands with my car. My total monthly savings come to $175.
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