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Need to reduce your family budget? These tips can help you save money and keep your family on a budget that will help you meet your goals.
After you have examined all your income and expenses, your financial situation is more apparent. For better family finances, you should reorganize, reduce, and even eliminate items from your budget. You will generate cash in this process to live on and take care of yourself in the most beneficial and healthy way.
How to Reduce Your Family Budget
Housing
Housing can be tough to reduce since rent and mortgage costs tend to be set costs. You can consider downsizing to reduce your cost.
With a mortgage, you can look into refinancing your home if interest rates are now lower than when you purchased your home. Be sure to way the pros and cons before doing this.
If you have private mortgage insurance (PMI) you can work on getting rid of it. You can have it automatically removed when you reach a specific home equity milestone or you can request to have it removed when you reach 20 percent home equity. You can also refinance to remove PMI, this is something to talk to your loan agent about.
Another option is to have your home reappraised if it has gained value. If you have owned your home for at least five years and your loan balance is no more than 80 percent of the new valuation you can ask for your PMI to be canceled. If you have owned your home for less than five years but more than two your mortgage balance must be no greater than 75 percent.
Food
Food costs keep rising so this is an area of your budget that is often hard to reduce. If you aren’t sure where to start with your food budget you can check out the USDA’s food plans for a good idea of where you should start your budget.
Some ways to reduce your food costs include meal planning, choosing items that are on sale, reducing your food waste, and reducing your meat intake.
Transportation
What you need in terms of transportation will vary depending on your family. If you are able to have one vehicle that can help you greatly reduce costs. If you live in a city with good public transportation you may even be able to get by without a car at all.
When you are purchasing a car take your time to consider your needs and if a used car or a new is better for you. With used cars, you are more likely to have repair costs and new cars lose a lot of their value very quickly.
Also consider how reliable the car is, is maintenance covered if not how much does it usually need, and what is gas milage like. These are all costs that can add up.
Be sure to budget for any car expenses you may have. It’s also a good idea to set some money aside to pay for any expenses that could come up.
Utilities
Utilities can be very expensive but there are many ways you can reduce them. Some options are very easy and affordable while others are more of an investment.
Some ways to reduce your electric bill include turning off lights and electronics when not in use, choosing Energy Star appliances when replacing them, and keeping your home a little warmer in the summer months and cooler in the winter months. Many of these methods will also help your gas bill if you use gas.
To reduce your water bill, the biggest thing is to make sure you have no leaks and fix any that do come up right away. You can also take shorter showers, and only wash dishes and laundry with full loads. Also, ditch a lawn that uses a lot of water for native plants and grasses that require little to no water.
Other utilities we can overlook are the internet and cable/streaming. For the internet, shop around for cheaper options or ask if there are any discounts or cheaper plans from your current provider. With cable, consider ditching it and going with cheaper streaming instead. And for any streaming services, you have to make sure to only keep the ones you are actually using.
Insurance
It’s never a good idea to cancel or do without health insurance, auto insurance, or home/rental insurance. Instead, you can seek better deals. You can reduce insurance payments if you have a reduction in income and get coverage through the ACA exchanges.
Occasionally getting new quotes for home and auto insurance can also help you find a better deal. Just be sure to always weigh the pros and cons of switching. A plan may be cheaper month to month but may not be as helpful if you need to use it.
Child Care
Childcare can be a huge cost and is not something you want to do cheaply. You can look around at your options but make sure you always choose a safe and good environment for your child.
Sometimes it’s actually cheaper for one parent to stay home part-time or even full-time. That parent could choose a side hustle or remote job instead to save on childcare and spend more time with the child.
This is something to talk about with your partner and consider what is best of you and your family.
Other Costs to Consider
Other costs you need to budget for and look into ways to reduce include loans, debt payments, pet costs, clothing, and of course it’s always nice to be able to budget in some money for fun.
Keep Track of Your Family Budget
Once you know what you need to budget you want to keep track of it. One of our budget planners can help you keep track of everything and keep your family on a budget.
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