If you’re looking to save money, you’ve come to the right place! This article will discuss 15 frugal living tips that implement today to save more money.
This post may contain affiliate links; please see our disclaimer for details.
Frugal living can provide several benefits, including increased financial security and peace of mind.
Making small changes today can help you get started on the path to financial independence.
So let’s dive in further, shall we?!
What does frugal living mean?
Frugal living means finding ways to save money with a focus on achieving financial minimalism. It’s about being mindful of your spending and making conscious decisions about where you spend your money.
Frugal living doesn’t mean going without or depriving yourself – it simply means being more mindful of your spending and making choices that align with your values.
For example, you may choose to spend less on clothes so that you can afford to travel more. Or, you may choose to cook at home more often so that you can eat out less.
Ultimately, frugal living is about balancing saving money and enjoying life. It’s about making choices that allow you to live well within your means.
What Benefits Come from Frugal Living?
Unfortunately, many associate frugal living with a negative connotation.
Some assume that those who live frugally are cheap, always looking for ways to save money, and never have any fun.
In reality, there are a plethora of benefits that come from living a frugal lifestyle!
Content with what you have
You stop comparing your life to others and learn to appreciate the things you do have.
This also helps to increase your self-worth because rather than depending on material possessions to make you feel good, you are relying on yourself.
Focus on the things that are truly important to you
You aren’t wasting your money on unnecessary items, so you can put your time and energy into the things that matter most to you.
Learn to be more resourceful
When you have less money to spend, you have to get creative about how you use the resources you do have. Doing so can lead to some great invention and problem-solving skills.
Very good at budgeting and managing finances
Frugality leads to better financial habits and can help you save money in the long run.
It can be financially beneficial because you are less likely to overspend and get into debt.
Overall, many benefits come from living a frugal lifestyle. If you’re considering making changes and want to save money, consider giving frugal living a try.
You might be surprised by how much you enjoy it!
Without further ado, let’s jump into the 15 frugal living tips I’ve prepared to get you started!
1) Evaluating your spending habits
Track where you are spending your money for a month or two to get an idea of where you can cut back. This is the most important step in living a more frugal lifestyle.
The key is ensuring you don’t modify your spending habits during the evaluation period.
You will want to get an accurate idea of where your money is going exactly.
2) Create a budget and stick to it
Determine what expenses are essential and what can be cut back or eliminated. This is one of the most important frugal living tips you can implement now!
Having a written budget and detailed plan will make you more likely to stick to your frugal goals.
3) Shop at thrift stores and garage sales
You can find some great deals on secondhand items that are still in good condition.
This is a great way to save money on clothing, household items, and more. It can also be a fun hobby!
4) Cut back on your cable bill or eliminate it
There are many ways to watch TV and movies without paying for a cable subscription.
You can use an antenna, stream content online, or rent movies from Redbox or similar services.
5) Reduce your energy consumption
You can save money on your utility bills by making simple changes like turning off lights when you leave a room and unplugging appliances when they’re not in use.
Remember, this is important because these costs can add up very fast.
6) Make your cleaning products
There are many recipes available online for DIY cleaning products. This is a great way to save money and avoid using harmful chemicals in your home.
Common DIY cleaning products include all-purpose, glass, and carpet cleaners.
One simple recipe is this all-purpose cleaner: mix water, baking soda, and white vinegar in a spray bottle.
You can clean surfaces like countertops, appliances, and floors.
7) Use discounts and coupons
When trying to save money, it’s important to take advantage of discounts and coupons whenever possible.
Whether you’re buying groceries or clothes, there are usually ways to get a better deal.
For example, you can often find grocery coupons online or in the Sunday paper.
Plus, many stores offer discounts if you sign up for their email list.
So if you’re looking to save money, keep an eye out for discounts and coupons. It can make a big difference in your budget!
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There are also opportunities to get special deals and FREE access to the best coupon codes. See how you can start making and saving money with MyPoints.
8) Don’t buy premium brands
Another frugal living tip is to try generic brands. Generic brands are often just as good as name-brand products but cost a lot less.
So if you’re looking to save money on groceries, check out the generic brands. You might be surprised at how much you can save!
9) Buy in bulk
One way to save money is to buy in bulk!
This can be done at a Costco, Sam’s Club, or Amazon Prime store. You can save money on groceries and household items when you buy in bulk.
Plus, you’ll have fewer trips to the store, which will save you time and money.
10) Reuse and upcycle
One of the best ways to save money is to reuse and upcycle items instead of buying new ones.
Things that fit into this category can be anything from clothes to furniture to home decor. Not only will you save money, but you’ll also be doing your part to reduce waste and help the environment.
This includes investing in glass water bottles, handkerchiefs (instead of Kleenex), and rags (instead of paper towels).
You can also save money by mending clothes instead of buying new ones.
11) Hang dry your laundry
Hang-drying your laundry is a great way to save money on your energy bill.
It takes a little bit longer than using a dryer, but it’s worth it in the long run.
Plus, your clothes will last longer if you hang them to dry instead of putting them in the dryer.
12) Cook at home
One of the best ways to save money is to cook at home instead of eating out.
We understand it can be challenging if you’re used to eating out all the time, but it’s worth it in the long run.
Not only will you save money, but you’ll also be able to control what goes into your food.
13) Make a home gym
If you’re looking for ways to save money, one area you can focus on is your health and fitness.
A gym membership can be expensive, and if you don’t live close to a gym, it can also be time-consuming to drive there and back.
Instead of spending money on a gym membership, why not create your home gym?
You don’t need a lot of equipment to get started – a few basic weights, an exercise mat, and some resistance bands can go a long way.
And if you don’t have room for bulky equipment, you can do plenty of bodyweight exercises to stay fit.
Creating your home gym can be a great way to save money and time, and it’s a great way to get in shape.
So if you’re looking for ways to be more frugal, this is one tip you should consider.
This seems like a no-brainer, but it’s important to remember. Just because something is on sale doesn’t mean you need to buy it.
If you can live without it, then don’t spend the money. This is one of the most important frugal living tips!
To Wrap Things Up
Frugal living is about making small changes that can save you money in the long run.
By following these frugal living tips, you’ll be on your way to a minimal and happy lifestyle!
Just remember to take things slowly and focus on what’s important.
With a little effort, you can save a lot of money! Please share how you live a frugal life in the comment section below! 🙂
Disclaimer:
We hope the information in this article provides valuable insights to every reader but we, the Biesingers, are not financial advisors. When making your personal finance decisions, research multiple sources and/or receive advice from a licensed professional. As always, we wish you the best in your pursuit of financial independence!
This post may contain affiliate links; please see our disclaimer for details.
Lower Your Heating Bill
Don’t become a financial victim of cold weather! If you’re looking for ways to save money on your heating bill, you’ve come to the right place.
According to Reuters, the average cost of using natural gas for heating in the US was expected to rise 30% this last winter.
The time is now to find ways to lower your heating bill this year and for years.
This article will discuss ten tricks that will help keep you warm and comfortable all winter long without breaking the bank.
So put on a sweater and get ready to learn how to save some money!
My Video Sharing How To Save Money on Heating Bill
1) Use a Programmable Thermostat
If you don’t already have a programmable thermostat, now is the time to invest in one.
A programmable thermostat will allow you to set different temperatures for different times of the day and night.
For example, you can set the temperature lower when you’re asleep or away from home.
Often people will leave their heating on all day long, even when they’re not home, but this is a huge waste of energy and money.
A programmable thermostat can save you significant money on your heating bill over time.
Below is a very popular choice, the Nest Thermostat which uses a sensor and GSP from your phone to know whenever you are leaving the home.
2) Weatherproof Your Home
One way to keep your home warm is to ensure it is well insulated.
Check for drafts around doors and windows and seal them with weatherstripping or caulking.
You can also add insulation to your attic or walls if needed!
Even a small draft can let in a lot of cold air, so it’s important to ensure your home is well-sealed.
These simple steps can significantly affect how warm your home is and how much money you spend on heating it.
3) Use Your Fireplace More Efficiently
Assuming you have a fireplace, using it more efficiently can help to lower your heating bill.
Make sure to open the flue when lighting a fire and close it when the fire dies down. This will help to prevent heat from escaping up the chimney.
In addition, using a glass fireplace door can help to keep heat in the room and lower your heating bill.
4) Dress Warmly
One simple way to lower your heating bill is to dress warmly.
Wear socks, slippers, and layers of clothing around the house. This will help you to feel comfortable at a lower temperature and save you money on your heating bill.
Dressing warmly is the best way to save money on your heating bill. So put on a sweater and get cozy!
5) Use More Bed Coverings
In addition to dressing warmly, you can also use blankets and throws around the house.
Blankets can help to keep you warm without cranking up the heat. Just be sure not to leave them on the bed when you’re not using them so they don’t get wrinkled.
6) Use Space Heaters
If you have a large home, it may not make sense to heat the entire house to one temperature. Instead, you can use space heaters to heat individual rooms as needed.
Doing this can save you money on your heating bill by only heating the rooms you’re using.
Just be sure to turn off the space heater when you leave the room, and always keep an eye on them.
Space heaters are a great way to save money on your heating bill, but they can be dangerous if misused.
Always turn them off when you leave the room, and never leave them unattended.
7) Negotiate With Your Utilities Company
If you struggle to pay your heating bill, reach out to your utility company. Many companies have programs to help low-income customers with their energy bills.
In addition, many companies will work with you to create a payment plan that works for your budget.
Don’t be afraid to reach out and ask for help if you’re struggling to pay your heating bill. Some programs and people can help you through this tough time.
Research what other companies offer to negotiate effectively and use that to your advantage.
Utility companies understand that many people struggle to pay their bills during tough economic times.
Don’t feel bad about asking for help. 🙂
8) Use Curtains or Blinds
Another way to keep your home warm is to use curtains or blinds. During the day, open them up to let in the sunlight.
The sun can help to warm your home and lower your heating bill. Just be sure to close them at night to keep the heat in.
You can also use heavy curtains or blinds to block out drafts from windows. This will help keep your home warmer and save money on your heating bill.
9) Use a Humidifier
If your home is dry, it can make you feel colder. Using a humidifier can help to add moisture to the air and make your home feel warmer.
Using a humidifier can save money on your heating bill because you can lower the temperature of your thermostat and still feel comfortable.
Just clean your humidifier regularly to prevent mold and bacteria from growing in it. The air will also be hot and moist, so it can help warm you up directly.
10) Don’t Heat Unused Rooms
One of the best ways to save money on your heating bill is to heat the rooms you’re using.
If you have unused rooms, close the vents or doors to those rooms, so you’re not wasting heat.
You can also close off unused rooms to save money on your heating bill.
You may feel cold if you close off unused rooms, but you can always open the door or vent if you need to.
Just be sure to close them back up when you’re done so you don’t waste heat.
The Bottom Line
Saving money on your heating bill is important, especially during winter.
No matter your situation, there are ways to lower your heating bill.
Following these tips, you can stay warm and comfortable all season long without breaking the bank.
So put on a sweater and get ready to save some money!
Disclaimer:
We hope the information in this article provides valuable insights to every reader but we, the Biesingers, are not financial advisors. When making your personal finance decisions, research multiple sources and/or receive advice from a licensed professional. As always, we wish you the best in your pursuit of financial independence!
It can be tough to know where to start if you’re trying to decide whether a Roth 401(k) or Traditional 401(k) is right for you.
According to RetireWire.com, “There’s 5.4 trillion dollars in IRA’s Assets in IRA’s have grown 10% per year. Nearly 49 million households have a traditional IRA”.
You can see great potential for return, especially in the long run.
Both the Roth 401(k) and the Traditional 401(k) have their pros and cons, and it cannot be easy to figure out the best option for your specific situation.
This post may contain affiliate links; please see our disclaimer for details.
If you prefer to watch my video instead, you can check out my YouTube video!
What is a Roth 401(k)?
A Roth 401(k) is a retirement savings account that offers tax-free growth and tax-free withdrawals in retirement.
Roth 401(k)s are funded with after-tax dollars, which means you won’t get a tax deduction for your contributions. However, all earnings and withdrawals are tax-free in retirement.
Roth 401(k)s are an excellent way to save for retirement, especially if you’re in a high tax bracket now and expect to be in a lower tax bracket in retirement.
They are also a good choice if you’re young and have many years to let your money grow tax-free.
However, Roth 401(k)s are not right for everyone. If you’re in a low tax bracket now and expect a higher tax bracket in retirement, you may be better off with a traditional 401(k).
With a traditional 401(k), you get a tax deduction for your contributions now, but you’ll pay taxes on your withdrawals in retirement.
What is a Traditional 401(K)?
A traditional 401(k) is a retirement savings account that offers tax-deferred growth and taxable withdrawals in retirement.
Traditional 401(k)s are funded with pre-tax dollars, which means you get a tax deduction for your contributions. However, all earnings and withdrawals are taxable in retirement.
With a traditional 401(k), you get a tax deduction for your contributions now, but you’ll pay taxes on your withdrawals in retirement.
When you are ready to retire, you may be in a higher tax bracket and owe more taxes on your withdrawals.
However, traditional 401(k)s may not be the best choice for everyone. If you’re in a high tax bracket now and expect a lower tax bracket in retirement, you may be better off with a Roth 401(k).
The main difference is that Roth 401Ks offer tax-free growth, while traditional 401Ks offer tax-deferred growth.
Tax-free growth: You will never have to pay taxes on the money you contribute or the earnings it generates.
Tax-deferred growth: You won’t have to pay taxes on the money you contribute or the earnings it generates until you withdraw it from your account.
The Roth 401K is unique because it allows you to contribute after-tax dollars to your retirement account. This means that when you retire and begin taking distributions, you won’t have to pay any taxes on the money you withdraw.
A traditional 401K, on the other hand, uses pre-tax dollars. This means you will be taxed on the money you withdraw from your account when you retire.
Should You Choose A Roth 401(K) or a Traditional 401(K)?
The Roth 401(k) was created in 2006 as an addition to the traditional 401(k). Both types of accounts are employer-sponsored retirement savings plans that offer tax advantages.
So, which is better for you? Roth or traditional?
Questions to First Ask Yourself:
When do you plan on retiring?
What is your tax rate now?
What do you think your tax rate will be in retirement?
How much money do you think you will need in retirement?
What is your investment strategy?
Are you comfortable with the idea of having your money invested for the long term?
The Roth 401(k) offers more flexibility and tax-free growth, while the traditional 401(k) offers tax-deferred growth.
Consider your retirement goals, tax situation, and investment strategy when deciding between a Roth 401(k) and a traditional 401(k).
What are Roth 401(k) and Traditional 401(k) Contribution Limits for 2022?
These two accounts share the same contribution limits for 2022 at $20,500.
Can I contribute to both a Roth 401(k) and a Traditional 401(k)?
Yes, you can contribute to a Roth 401(k) and a traditional 401(k), but your total contributions cannot exceed the $20,500 limit.
For example, if you’ve already contributed $10,000 to your Roth 401(K) this year, you can only contribute an additional $10,500 to your traditional 401(K).
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Choosing between the two options depends on your circumstances. If you think you will be in a higher tax bracket in retirement, then a Roth 401(k) can offer significant tax savings.
If you are young and just starting your career, you may be in a lower tax bracket now than when you retire. The traditional 401(k) can offer significant tax savings.
Deciding Based On Your Tax Bracket: Roth 401(k)s offer tax-free growth and tax-free withdrawals in retirement, which can result in significant savings over the traditional 401(k).
Talk to a financial advisor if you’re unsure which is right for you. They can help you determine the best option for your unique circumstances.
Disclaimer:
We hope the information in this article provides valuable insights to every reader but we, the Biesingers, are not financial advisors. When making your personal finance decisions, research multiple sources and/or receive advice from a licensed professional. As always, we wish you the best in your pursuit of financial independence!
This post may contain affiliate links; please see our disclaimer for details.
1) Use a Gas Credit Card
The first thing that comes to mind is using a gas credit card. This is easy, but using a gas credit card can be effective if used correctly.
Gas cards are commonly used for cashback or rewards on gasoline purchases, which can add up over time.
It can be an effective method for saving money at the pump, but it’s important to take the annual fees the credit card charges per year.
It is important to know that it is still a credit card, and you should use it responsibly.
If this would work for you, find a gas credit card with good benefits and no annual fee.
2) Choose The Best Priced Pump
Shoppers may save money on gasoline by comparing several options.
You can browse for the best prices online or take a mental note as you drive past various gas stations on your regular commute.
3) Take Advantage of Discounts and Coupons
It may not be glamorous to keep discount codes and coupons, but they are a simple and effective way of saving money on gas.
Gas stations frequently provide discounts and coupons, so use them while you can!
4) Become a loyal customer
Some gas stations have loyalty systems allowing you to earn points or savings on gasoline purchases.
It could be a great option if you often go to the same gas station or if that location is most commonly known for the cheapest price.
You can also ask the staff if they offer this if it’s not advertised.
5) Drive Less
It’s more difficult to avoid driving than it appears, but reducing your mileage may help you save money on gasoline.
If you can carpool, use public transportation, or walk or bike when possible, you will save money on gas.
In most cases, it will be hard to avoid driving, especially if you need to for work or to get essential items.
However, taking the long scenic route and night drive around town can be avoided if you are trying to save money on gas.
6) Plan your commute
If you can, try to schedule your journey so that you’re driving during off-peak hours.
Doing so will help you save money on gas and avoid traffic. Running the engine and idling will burn more gas.
You don’t want to be paying the high prices at the pump to watch your money evaporate with honks and horns behind you.
7) Plan Your Refills
By scheduling your weekly refuels, you can fill your tank faster than the increasing prices.
If you know that gasoline costs will rise, fill up your automobile before they do.
This can be minor in money savings, but it can make a significant difference when paired with other tips.
8) Check Your Caps For Leaks
Loose gas caps can cause evaporation and result in a waste of gasoline and money.
You can avoid losing gas and money by ensuring your vehicle is well-maintained and free of technical issues.
9) Let Go of Extra Weight
Every hundred pounds you eliminate from your car saves it three to four percent in gasoline usage.
You may have some items in your vehicle that are weighing it down. It’s beneficial to empty the car and get rid of anything you no longer need.
10) Slow and Steady
As mentioned earlier, unnecessary slow drives around town can be cut out. However, it’s important to know that quick accelerations also harm your wallet.
When possible, try to drive at a consistent pace, so you’re not wasting gasoline.
You can increase your fuel efficiency by as much as 80% for every five miles per hour you decrease your speed.
If you ease off the gas, you may save up to 30 cents per gallon.
Only speed things up in emergencies. Having this concept in mind on the road may also save you from speeding tickets and accidents.
11) Buy In Bulk
Some supermarkets sell gasoline at a discount. This can be commonly seen at wholesale stores like Costco and Sam’s Club.
They do, however, necessitate a yearly membership. If you shop there for your food, it might be useful to fill up the tank simultaneously.
Like stacking all fuel purchases on one credit card for the best cashback, a household can share one membership.
As a bonus, you can also use your gas credit card at these bulk discount stores.
12) Money-saving Apps
We mentioned earlier the benefits of finding the best prices in town.
A great way to do this would be to use apps like GasBuddy, Gas Guru, or AAA Mobile.
According to GasBuddy, purchasing the cheapest gas in town may save drivers up to 25 cents a gallon.
The apps are available for download on Android and iOS devices.
13) Time Your Tank Replacement
If you’re in the market for a new car, it might be beneficial to time your purchase when you need to replace your old car’s engine.
New engines are much more fuel-efficient, so you’ll save money on gas in the long run.
This is because the older the engine, the less efficient it becomes.
14) Get a Fuel-Efficient Vehicle
The second last tip for how to save money on gas is to get a fuel-efficient vehicle.
If you’re in the market for a new car, many fuel-efficient options are available.
You can also purchase a used car that is known to be fuel-efficient.
Hybrid cars are a great option because they use a combination of gasoline and electricity.
You can save money on gas while doing your part for the environment.
There are many fuel-efficient models to choose from, so take your time finding the perfect car.
16) Go Electric
Electric cars are becoming more popular, and technology is constantly improving. If you can switch to an electric car, you’ll be sure to save money on gasoline in the long run. Not only are they much cheaper to operate, but they’re also much better for the environment.
They are not cheap, but this is the best option if you’re looking for ways to save money on gas. Consider it as an investment that results in money savings month after month.
Electric or Hybrid?
When your car’s time ends, you might want to consider an electric or hybrid model. These cars have been shown to save drivers money on gasoline in the long term.
They also have the added benefit of being better for the environment.
Electric cars are powered by electricity and thus do not require gas. Hybrid cars have both an electric battery and a gas tank.
The battery is used first, and then the gas kicks in when the battery needs help.
While the initial cost of these vehicles may be higher, you will save money on gas in the long run. In some cases, you may even qualify for tax breaks or subsidies.
With the costs of gas continuing to increase, it’s not a bad idea to look at different ways to increase your passive income. This will give you more money at the end of the month to cover gas expenses.
An excellent way to increase your PASSIVE income is by renting out extra space! With NEIGHBOR, you can easily rent out extra space, such as your garage, self-storage unit, rooms, etc.
From neighbor.com
Conclusion: Easy Ways to Save Money on Gas
Applying a combination of these 15 tips can help you save money on gas. Following these tips can ease the strain on your budget and pocketbook.
Some of these methods may not be realistic to your circumstance, such as buying a new fuel-efficient car.
However, there should be a few things mentioned in this article that you can do right now to start saving money on gas.
With the money saved, it can help keep your gas bill manageable while allowing you to save for a bigger purchase like an electric vehicle.
Use these tips and start saving money on gas today!
We hope the information in this article provides valuable insights to every reader but we, the Biesingers, are not financial advisors. When making your personal finance decisions, research multiple sources and/or receive advice from a licensed professional. As always, we wish you the best in your pursuit of financial independence!
This post may contain affiliate links; please see our disclaimer for details.
Managing money is a huge source of stress for a lot of people. Figuring out how to effectively manage your money can be daunting, but it doesn’t have to be.
There are some simple rules that you can follow to help make managing your finances easier. The 50/30/20 rule is one such rule.
The method states that you should allocate 50% of your income toward essentials, 30% towards wants, and 20% towards savings.
50/30/20 Rule Pie Chart
In this article, I discuss the 50/30/20 rule in more detail and provide tips on how to apply it to your own life!
The 50/30/20 rule is a simple and effective way to manage your money. The rule states that you should spend 50% of your income on necessities, 30% on wants, and 20% on savings and debt repayment.
This may seem like a lot of work, but it doesn’t have to be.
You can start by creating a budget and tracking your spending for a month. This will give you an idea of where your money is going and where you can cut back.
Once you understand your spending patterns, you can begin to implement the 50/30/20 rule.
Start by allocating 50% of your income to necessary expenses such as rent, food, transportation, and utilities.
Then, allocate 30% of your income to wants such as entertainment, dining out, and shopping.
Finally, allocate 20% of your income to savings and debt repayment.
If you spend more than 50% of your income on necessities, try to find ways to cut back.
For example, you may save money on food by cooking at home more often or cutting back on unnecessary expenses.
If you are spending more than 30% of your income on wants, try to find ways to reduce your spending in this area.
For example, you may save money by watching movies at home instead of going out to the theater.
The 50/30/20 rule is a great way to get a handle on your finances.
By following this rule, you can ensure that you are spending your money in a way that is both responsible and enjoyable. So what are you waiting for? Start budgeting today!
Where Did The 50/30/20 Rule Come From?
The 50/30/20 rule is a personal finance guideline popularized by Senator Elizabeth Warren in her book, All Your Worth: The Ultimate Lifetime Money Plan.
The 50/30/20 budgeting method is designed to help you assess your financial needs and make changes to your spending habits if needed.
The goal is to end up with a balanced budget at the end of each month.
How To Budget Your Money With The 50/30/20 Rule?
The 50/30/20 rule is simple. You take your after-tax income and divide it into three categories:
How to budget your money with the 50/30/20 rule
50% goes towards needs like rent, food, transportation, and utilities
30% goes towards discretionary spending like entertainment, dining out, shopping, etc.
20% goes towards savings or debt repayment
Let’s say you make $2000 per month. With the rule, you would only have 50% of that to spend on living costs which is $1000. This probably means you won’t be able to get an upscale apartment or enjoy the luxury of the finest groceries and utilities.
30% of $2000 would be $600. That’s the amount you can spend on fun activities such as eating, watching a movie, or taking a trip.
The final 20% is $400. You would save or use this to pay off debt each month. In this particular scenario, the budget will look like $1000/$600/$400.
This leaves little room for error and forces you to be mindful of every penny you spend. However, it can be a great way to get your finances in order and start saving money.
The rule is flexible, though—if you have high student loan payments or are trying to save up for a down payment on a house, you can adjust the percentages accordingly.
The most important thing is that you are aware of your spending and are trying to save money.
The key concept is to ensure that the 20% assigned for savings and debt repayments does not go any lower.
It can be helpful to increase that number, but you should never look to decrease it.
Be careful with these other common mistakes when using the 50/30/20 rule…
Not including all expenses: When budgeting with the 50/30/20 rule, include all necessary expenses in the 50% category. This includes your phone bill, internet service, and health insurance.
Forgetting to account for irregular expenses: Remember to account for expenses that occur less often, such as car insurance and property taxes.
Treating the 50/30/20 rule as a hard and fast rule: The 50/30/20 rule is meant to be a guideline, not a strict set of rules. If you find that you can’t stick to the percentages exactly, don’t worry. Just try to get as close as you can and adjust as needed.
Examples of The 50/30/20 Method
Earlier in this article, we used the example of an income of $2000 per month. Let’s explore some more examples of different situations and levels of income.
If you earn $4000 per month, you will break it down into:
$2000 for 50% needs
$1200 for 30% wants
$800 for 20% savings & debt repayment
You earn $8000 per month, you would break it down into:
$4000 for 50% needs
$2400 for 30% wants
$1600 for 20% savings & debt repayment
If you earn $12,000 per month, you will break it down into:
$6000 for 50% needs
$3600 for 30% wants
$2400 for 20% savings & debt repayment.
The lessons from these examples are that your percentages will always stay the same, but the actual dollar amounts will obviously change based on your income.
Another thing to remember is that these are just guidelines, and you can adjust them according to what works best for you and your unique financial situation. It’s important to tailor this rule (or any financial rule, for that matter) to fit your own life and needs.
Now that we’ve gone over the basics of the 50/30/20 rule, let’s talk about how you can implement it in your own life.
Here are the steps to getting started…
Determine your after-tax monthly income: This is the amount of money you have to work with each month after taxes, and other deductions have been taken out of your paycheck.
Track your spending for one month: This will give you a good idea of where your money goes each month and where you may be able to cut back to save more.
Calculate your 50/30/20 breakdown: Once you know how much money you have to work with each month, you can start allocating it into different categories.
Make a budget and stick to it: This is probably the most important step in managing your money effectively. Once your budget is set, please do your best to stick to it as closely as possible.
Review and adjust as needed: As we said before, these guidelines are just that – guidelines. They’re not set in stone, so if something isn’t working for you or your circumstances have changed, don’t be afraid to adjust your budget accordingly.
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This rule works so well because it forces you to think about your spending differently. Most people spend all their money on wants and then try to save whatever is leftover.
The 50/30/20 rule flips that around by ensuring you save money and use the remaining amount for your wants.
The 50/30/20 rule is a great way to start saving and budgeting because it provides a simple framework you can follow.
Once you understand how the rule works, you can start to tweak it to better suit your needs.
For example, if you have a lot of debt, you may want to adjust the percentages to put more toward debt repayment.
How the 50/30/20 Method Works
You spend 50% of your income on necessities like housing, food, transportation, and healthcare. This number works because, for most people, these expenses stay relatively constant from month to month.
30% of your income goes towards wants or discretionary purchases. This could include things like travel, entertainment, and clothes. Using 30% should work for these purchases because they shouldn’t cost more than your living expenses.
It also gives a fair amount of wiggle room for unexpected expenses.
20% of your income is saved or invested for the future. This could be for retirement, an emergency fund, or other financial goals.
Consistently saving, investing, or paying down debt with 20% of your income works because it allows you to make significant progress on your long-term financial goals.
Is The 50/30/20 Budget Right For You?
Ask yourself these questions to find out if the 50/30/20 budget is right for you.
Do I have a shopping habit?
Do I get paid a lot but don’t have money to pay down debt?
Do I have trouble setting a framework for my personal finances?
Do I need to start budgeting to have more financial freedom?
If you answered “yes” to any of the above questions, the 50/30/20 budget might be a good fit for you.
If you find that you are not able to stick to the 50/30/20 rule, don’t worry. The most important thing is that you start trying to save and budget your money.
The 50/30/20 Rule Is Right for you if…
You want a simple framework to follow
You need help allocating your income into different categories
You want to start saving and budgeting but don’t know where to begin.
It’s up to your lifestyle & money choices
In some circumstances, the 50/30/20 budget might not be right for you. This can be true for those that don’t need to spend anywhere close to 30% on fun activities and have most of their living expenses covered (living with relatives, walking to work or working from home, etc.)
If you have high debt or want to save to invest sooner, you can adjust a percentage from the 30% fun category and increase your 20% savings column.
For some people, the rule can look like 50/10/40. This scenario would result in very little discretionary spending, but it will also get you out of debt or save for investments much more quickly.
If you have low living expenses and not much desire to spend on fun activities. The rule in this case, can look something like 30/10/60. This means 30% goes to living expenses, 10% to fun, and 60% to savings, debt repayment, and investing.
This accelerated rule is a great way to reach financial freedom faster, but it can be stressful. That’s why the 50/30/20 rule is great. It’s a stress-free and manageable way to budget effectively!
So is the 50/30/20 budget right for you?
As you can see, there is no one-size-fits-all answer to this question. The 50/30/20 budget may be right for you, or you may need to adjust it to fit your unique circumstances. The most important thing is to make an effort to save and budget your money.
Try out different methods and see what helps you save the most money.
You may even want to try using multiple methods at once. However, this can overcomplicate things. That’s why the 50/30/20 rule is the perfect standard to follow.
For most people, the 50/30/20 budget is a great starting point. It’s simple and easy to follow, making it perfect for those just getting started with budgeting.
If you believe you can benefit from the 50/30/20 budget, give it a try! You may be surprised at how much easier it is to save money than you thought.
Disclaimer:
We hope the information in this article provides valuable insights to every reader but we, the Biesingers, are not financial advisors. When making your personal finance decisions, research multiple sources and/or receive advice from a licensed professional. As always, we wish you the best in your pursuit of financial independence!
This post may contain affiliate links; please see our disclaimer for details.
When receiving your electricity/energy bill each month, do you ever wonder what it really means? It’s not just about the numbers; it’s about the energy used to power your home.
Electricity is a necessity in today’s world.
We use it for everything from powering our homes to cooking our food, so it’s important to know how much we are using and how much we are spending.
It’s important to remember the amount of energy we use can also impact the environment.
So as consumers, we often think about how to cut costs and save money in our daily lives.
This can range from saving money on groceries, catching general sales, and overall household budgeting. But what about your electric bill?
The electric bill seems like one of those bills that happen and you have little control over it.
In modern times, lighting, cooling, and heat are necessities so going without electricity sounds absurd. But that doesn’t mean you have to like paying a high electricity bill every month.
There are ways to help lower your electricity bill without sacrificing your electricity.
One of the easiest ways to reduce your electric bills is by turning off the lights when you are not in a room.
This will not only save money on electricity, but it will also help the environment by reducing carbon emissions and air pollution.
The cost of electricity has been rising steadily for the past decade, and prices are expected to continue climbing.
Lowering your electricity bill should be a priority if you’re trying to save money and fortunately it’s quite easy to do and there are several ways you can tackle this!
The Benefits of Lowering Your Electricity Bill
With the cost of living rising, many people are looking for ways to lower their electricity bills.
Lowering your thermostat could be one of the ways to save money on your tax bill.
In the winter, you may want to lose heat in your house by taking down a couple of window panes to lower the interior temperature. High humidity can cause mold and mildew growth, so a dehumidifier could help save on electric bills.
The average person spends $2,000 on electricity a year. This can add up to a $200+ monthly bill.
One of the most surprising benefits of lowering your electricity bill is that you can save up to $120 per year on your electric bill.
If you lower your energy use by 10%, you’ll save $20 each month and $120 a year.
10 Surprising Ways To Lower Your Electric Bill
1. Use a programmable thermostat
Programmable thermostats are great for controlling your home’s temperature on a schedule.
You can set it to adjust the temperature when you are away from home automatically.
This means that your heating or cooling system is only working when it needs to be, which will save you money on your utility bills in the long run.
Below is a very popular choice; the Nest Thermostat uses a sensor and GSP from your phone to know whenever you are leaving home.
2. Install LED light bulbs
LED light bulbs are more energy-efficient than traditional light bulbs and last much longer.
They also emit less heat, so they won’t raise the temperature in your home as much as regular bulbs.
This will help keep your energy bills down and make it easy to light your home efficiently.
3. Turn off the lights
Turning off the lights when you are not using them may seem a little obvious, but it can be surprising how much we forget to flip the switch when we leave the room.
This is highly beneficial because it saves money, energy, and pollution.
Most importantly, it helps to save the planet by reducing greenhouse gas emissions.
4. Turn off the electronics
Much like our lights, we may also forget to shut down other electronic devices.
They can drain our energy even when we are not using our electronics. We use a lot of electricity to power these devices.
The best thing you can do to save energy is to turn them off when you are not using them.
5. Use your dishwasher more efficiently
Use the dishwasher only for full loads of dishes and turn it on only during periods of high energy demand (usually in the evening).
Running your dishwasher when it is not full of dishes can waste water and energy.
If the dishwasher runs during periods of high energy demand, you will be charged a higher rate for electricity.
Appliances with motors, such as clothes washers, dishwashers, and ovens can use up to 3,600 kilowatt-hours per year.
You could alternatively wash your dishes by hand.
6. Dry your clothes on a clothesline
You can do this with a timer instead of running your electric dryer all day.
This is a big green living tip.
The convenience of a dryer is great, but if the weather is nice and warm, it can be much more beneficial to hang our clothes on a clothesline.
This also gives your clothes a nice natural scent to them.
7. Reduce the use of all major appliances during peak hours
This includes dishwashers, clothes washers and dryers, ovens and stoves, space heaters, air conditioners, and dehumidifiers.
We mentioned dishwashers above, but applying the same idea to all of your major household appliances can be beneficial.
Even the smallest appliance can use a lot of power. A space heater uses up to 1,000 kilowatt-hours per year. And an air conditioner or dehumidifier can use between 2,400 and 10,800 kilowatts per year.
Your energy provider should know how much your appliances use if you want to know the exact numbers.
8. Install energy-efficient windows
Use a double-paned glass that is tinted for better insulation from the heat in summer and cold in winter.
This is beneficial as it will help keep your house at a more balanced temperature, and you won’t need to use the air or heat as often.
9. Use a power strip with multiple outlets
Doing this can help you control and turn off all appliances that are not in use.
When you’re not using your electronics, it’s best to turn them off. But what should you do when there aren’t enough outlets in a room to plug all of them in?
You could use a power strip with multiple outlets to plug all of your devices into one outlet while they are turned off. This will help reduce the amount of energy wasted when they are plugged in but not in
Unplug appliances not in use or have an automatic shut-off after a certain period. This will prevent them from using energy when they’re not needed. It is estimated that about 10-15% of the energy used in a house is wasted because of appliances that are plugged in but not in use.
The best way to reduce this usage is by unplugging appliances that are not being used for an extended time or have an automatic shut-off after a certain time.
10. Install power-saving devices on appliances
These devices will automatically turn off the appliance when it is running at full capacity and then turn it back on when it needs to be used again.
With higher power rates, it is necessary to ensure that you use your appliances efficiently.
To learn more about these sorts of devices, contact your electricity company. Not only will this save money, but it will also cut down on wasted energy.
Conclusion
Reducing Your Electric Bill Is a Great Way to Boost Your Finances While Also Doing the Planet a Favor
The average American spends $2,000 a year on electricity. However, many people don’t know how to reduce their electric bills and are paying too much for their energy usage.
However, we know that there are various ways to reduce energy consumption and save money without feeling like you’re sacrificing any convenience.
Reducing your electric bill is a great way to boost your finances while also doing the planet a favor.
Use our helpful tips above to reduce your electric bill. Remember to turn off any electronics when they are not in use.
Install LED bulbs in addition to specially made energy-saving bulbs. Invest in a programmable thermostat to have smarter control over the temperatures in your house.
Be sure to double-check smaller devices such as laptops, lamps, TVs, and computers for more places you save electricity.
Finally, going back to hand washing your dishes and hanging your clothes out to dry may seem archaic and this day and age, but it can go a long way in helping you save on your electricity bill.
Please do your part and see the benefits in your wallet and on our planet. Let us know other ways you’ve been able to save money on electric usage in the comments section below!
Disclaimer:
We hope the information in this article provides valuable insights to every reader but we, the Biesingers, are not financial advisors. When making your personal finance decisions, research multiple sources and/or receive advice from a licensed professional. As always, we wish you the best in your pursuit of financial independence!
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