How to Lower Your Bills & Reduce Expenses

young family happy about money

Managing finances is an important part of life, and households have to manage budgets according to their income levels to maintain a sustainable lifestyle. While you may often have budgets, sometimes you may find yourself in situations where the budget seems unmanageable. Often, the cause for this is high bills that make it hard for households to manage their finances well.

It is often the goal of most people to reduce their spending and have manageable budgets. To effectively cut your budget and ensure you have funds available for savings and investments or even emergencies, you have to find ways to reduce bills. One solution is examining your bills and making tweaks that will reduce your bills. Having lower expenses in categories such as housing, utilities, memberships, food, debt, and transportation will ensure you have some extra disposable income for other things.

1.Reducing Housing Expenses

For most households, housing is the biggest expenditure item. It contributes to a big portion of their budget spending. Therefore, it is an area that can have the biggest impact on the budget when trimmed. You can make big savings by managing and reducing your expenses on rent, mortgage, and homeowners insurance.

2. Reducing Mortgage Payments

There are two ways you can reduce your mortgage payments. The first option is to refinance the mortgage. That can help you lower the interest rate on the mortgage and ensure savings on your monthly payments. You may need good credit to get the best interest rates. You may also need to research and compare interest rates and fees to ensure you have the best deal from the lender.

The second way you can lower mortgage payments is by dropping the private mortgage insurance that may be attached to your mortgage. That happens when the home’s down payment was less than 20%. You can drop the private mortgage insurance once the balance on the mortgage drops below 80%. Dropping private mortgage insurance will ensure your monthly payments are lower.

young married couple worried about money

3. Reducing Rent Expenses

You can lower expenses on rent using different strategies. However, your options will depend on your position or status. Some options will require more flexibility while others would be viable for those that may not have much room for flexibility.

The first option to lowering expenses on rent may be downsizing to a smaller house. You can move from your current home to a house with lesser rooms. This option may mean giving up on some of your comforts. For example, you may have to double up on bedrooms or even lose the luxury of a guest room.

Downsizing may not be an option for everyone. Some people may not have the flexibility of moving into a new house. For such cases, renegotiating the rent terms may be a viable option. You can negotiate with the property owner for lower rent. However, you may also have to cede some ground in return. The lower rent may be for a longer lease as well as you taking care of repairs in the house.

Lastly, where possible, you can get a roommate to save on rent. Sometimes, to make this possible, you may have to move to a bigger house to be able to accommodate a roommate. However, since the roommate will also be paying part of the rent, you will end up spending less. However, this option is requires someone that would be willing to share their space with someone. It may not be viable for a family setup.

4. Reducing Homeowners Insurance Payments

For homeowners, the need for homeowners insurance can make your budget tight. However, there are ways you can lower the expenses on insurance. First, you can try bundling your car insurance with home insurance. Depending with the insurer, bundling can lower your premium payments by up to 25%.

You can also lower your insurance expenses by looking for the best rates in the market. Before settling on an insurer, you need to carry out some research to determine the best quote. You can also look for discounts. Both strategies will ensure you reduce bills on insurance.

5. Lowering Utility Bills

Trimming your monthly utility bills is a smart way to lower your bills. With small tweaks in different areas, you can end up making big savings. Since these are recurring expenses, managing them well would be an effective way of lowering your monthly expenditure.

6. Lowering Energy Bills

Electricity is necessary for most homes. However, it can account for a big portion of your monthly utility bills. Depending on how you use it, you may end up having very high energy bills every month. To lower energy bills in your home, you may need to reduce or cut down on some of the usages.

One way to cut down on energy consumption is to dial down your thermostat. Operating the thermostat at high temperatures consumes more energy, resulting in high energy bills. Thus, to lower the bill, you can drop the temperature at night or when no one is at home. You can also turn down your water heater to reduce consumption.

You can further lower energy bills by shutting off power to devices or equipment, not in use. You can use a smart power strip to help you power down devices that hog energy in your home. You can also have an energy audit of your home to enable you to know how you consume energy. That will provide insights into the devices you may need to limit use to reduce bills.

7. Streaming and Internet

Streaming and internet subscriptions offer a good opportunity to lower your monthly expenses. Sometimes people subscribe to services they do not utilize effectively. Therefore, you need to ensure that your these subscriptions serve your needs without resulting in unnecessary expenses. From Netflix to Binge, Spotify to Kayo Sports, all of these expenses add up fast.

A good start would be to evaluate the services you use and determine those that you actually need. You are likely to find that there are services that you rarely use. Cancelling such services will result in cuts in your monthly utility bills. You may also switch to a lower internet speed to reduce your monthly expenditure on internet.

You can also reduce your streaming and internet bills by bundling the two services together. Some service providers offer both internet and subscription services. You can lower your expenses by purchasing the services from the same provider and having them in one package.

8. Mobile Phone

For mobile phone bills, the best way to lower the expenses is to understand your plan and data usage. By taking stock of your monthly expenditure, you will be able to determine your needs. You can then look for a provider with the best deals. If possible, switch to a cheaper provider. You can also switch to a prepaid option as it may encourage you to manage your usage better.

9. Saving on Transportation

Transport is a necessity for most households. However, it can be one of the items causing a strain on your budget. You can trim it to make savings on your monthly expenditure. If you use public transportation, lowering the expense may require managing your commute as most of the costs would rarely change without change in movement. If you have your own car, you can lower the transport expense in two ways.

couple working out expenses and finances

10. Saving on Car Insurance

There are about three ways you can lower the payments you make towards insurance for your car. First, you can ask for discounts from your insurer for being a safe driver. You can also bundle your car insurance with your home insurance.
Secondly, you can reduce your insurance coverage. However, this is applicable only for older vehicles with lower values.

You can drop coverage such as collision and comprehensive as the value you get from such coverage may be lower than your premiums in a year.

Lastly, you can increase your deductible on the insurance. That will lower your monthly premiums. However, it will lead to an increase in your out-of-pocket costs in case you are involved in an accident.

11. Reducing Car Payments

Car payments form a big part of the transportation expenses. You may need to work out a strategy to keep them low in your bid to lower bills. Sometimes, the choice can be downgrading to a less expensive model.

The first option you can look at is refinancing your car loan. You can negotiate for a better interest rate or a longer repayment period. That will effectively reduce how much you repay per month.

Sometimes people own assets that may in an actual sense prove to be liabilities. You need to assess your need of the car vis a vis the cost of using it and maintaining it. That analysis may reveal that you spend more on insurance, parking, maintenance, and gas than you would spend when using public transport. In such a case, selling the car would save you some expenses.

You can also sell your car and use the proceeds from the sale to pay off your loan. You can then buy a less expensive model that still serves your needs.

The suggestions on lowering your bills here are not exhaustive. There are others that you can still apply and effectively reduce your bills. The bottom line is that you need to evaluate your expenditure and determine the areas of spending that you can cut down. Your analysis should be on a need versus cost basis.

For more money-saving tips and ways to get the maximum back on your tax return, check out the blog for loads of handy advice and information.


*General Advice Warning – “Any financial advice provided by is general in nature and is not personal financial advice. It does not take into account your objectives, financial situation, or needs. Before acting on any information, you should consider the appropriateness of it regarding your own objectives, financial situation and needs.”