If you want to fast-track your financial goals or just finally stop living paycheck to paycheck, one of the best things you can do is reduce your fixed expenses.
You see, unlike reducing or cutting a one-time expense that, while beneficial, only helps your finances in the near-term, reducing a fixed expense can free-up additional income for months or even years to come.
That said, if you’ve never attempted to lower your fixed expenses, you may not even know where to start. Beyond that, if you’re already feeling a little overwhelmed by your financial life, it can be difficult (maybe even painful) to wade into all your expenses and start chopping.
So, in an effort to help you along your financial journey, and guide you through the process, in this article, I’m going to cover 10 of the best ways to reduce your fixed expenses.
Let’s get to it!
1. Get On A Written Budget
Before you can reduce any of your fixed expenses, you first need to identify them. And the best way to do that is to get on a written budget that lays out every single one of your expenses.
You’d be surprised how many unnecessary expenses you can identify, reduce, or cut altogether when you go through this process. And the best part is, it shouldn’t take you more than about 30 minutes.
Now, if you’ve never created a budget before, or you just haven’t had the greatest success, I highly recommend checking out the following posts about budgeting:
- How To Make A Budget In 10 Simple Steps
- 50 Budgeting Tips For Every Stage Of Life
- 10 Reasons Why Budgeting Is So Important
- How Does Budgeting Help You Save Money
These posts will equip you with everything you need to know to start budgeting like a pro.
Put simply, budgeting will help you get every one of your fixed expenses out into the open so that you can trim them with confidence and precision.
2. Stop Overpaying For Insurance
Ok, so at this point I’m going to assume you’ve laid out your budget and identified all your fixed expenses. But which fixed expenses make the most sense to reduce?
Well, one of the best places to start is insurance. And I’m not just talking about car insurance. I’m talking about home insurance, renter’s insurance, life insurance, and any other kind of insurance you are paying.
If you feel like you are paying too much for insurance of any kind, it is imperative that you shop around for different options.
In fact, if you are shopping for home, auto, or renters insurance, I highly recommend getting a free quote from Liberty Mutual. Their online quote tool, only takes a couple minutes, and at the very least, it will give you a starting point from which to compare the rates of other insurance providers. Seriously, shopping for better insurance rates is one of the best ways to reduce your fixed expenses, and this is a great place to start. Click here to get a free insurance quote from Liberty Mutual.
3. Cut The Cord
When my wife and I were getting out of debt, we decided to cut cable from our budget, and it was one of the best things we ever did. For one, it reduced our monthly fixed expenses by about $60, and two, it reduced the amount of time we wasted sitting in front of the TV.
Now, I understand that for many people, cutting cable isn’t an option they are willing to consider. However, if you are looking for ways to reduce your fixed expenses, this is an easy way to squeeze an extra $50 – $100 per month out of your budget.
4. Find A Less Expensive Cell Phone Plan
These days, having a cell phone plan is pretty much a given. However, that doesn’t mean you need to pay an exorbitant amount of money.
In fact, if you want to reduce your monthly fixed expenses, calling your cell phone carrier and negotiating a better rate is a great way to find a few extra bucks of savings.
In the event that they’re unwilling to work with you, you might even consider shopping for a different carrier. You never know, this could end up saving you hundreds of dollars per year.
Remember, every little bit counts.
5. Negotiate Your Internet Bill
For most people, internet is an essential utility. Whether you work from home, run a business, or just want to stream your favorite shows after work, you need to have a decent internet connection.
But let’s be honest, it can get kind of expensive. And for whatever reason, internet service providers seem to slowly creep their prices up until you are paying significantly more money than when your plan started. I mean, one month you’re paying $56, and the next month, your rate suddenly jumps to $85. (At least that’s been my frustrating experience.)
That’s also why, over the years, I have re-negotiated my internet bill quite a few times. And you should do the same.
It might be a little inconvenient to call your service provider, but when a simple phone call can save you $20 – $30 per month, you should definitely do it.
6. Cancel Unnecessary Subscriptions
One of the sneaky ways fixed expenses can get out of control is through online subscriptions. A music app here, and a photo app there, and before you know it you’re spending $50 per month on apps and services you don’t even use anymore.
So, when you create your budget and lay out every single expense, be sure to keep an eye out for small, seemingly insignificant subscriptions. Then, cancel them.
You might be surprised by how much this can reduce your fixed expenses.
7. Get Rid Of Your Car Payment
Of all the fixed expenses you can eliminate from your financial life, car payments should be at the top of your priority list.
With the average car payment hovering around $500 per month, this can have a majorly beneficial impact on your financial life.
Now, I realize that getting rid of a car payment is easier said than done. After all, there’s only a couple ways you can go about it:
- You can sell your car and use the money to pay off your loan, then buy a cheaper vehicle that you can pay for outright.
- You can apply extra money to your monthly payment and pay it off as soon as possible.
Either way, getting rid of a car payment is one of the best ways to reduce your fixed expenses. Sure, it might be difficult, but it’s well worth the extra financial margin you’ll achieve by doing so.
Oh, and on a similar note, if you’re making monthly payments on a boat, RV, motorcycle, or anything else with a motor, be sure to get rid of those payments as well. In short, the less debt you have, the better off your finances will be.
8. Cancel Your Gym Membership
I’m all for leading a healthy, active lifestyle. However, staying in good shape doesn’t mean you have to spend an arm and a leg on an overpriced gym membership.
Seriously, there are plenty of gyms out there that charge a very reasonable monthly fee. So, if you feel like you’re spending a little too much, don’t be afraid to shop around for a cheaper membership at a different gym.
Or, if you want to go with the cheapest possible option, you could cancel your gym membership altogether and workout for free at home.
Put simply, you don’t have to shell out a bunch of cash in order to get a great workout. So, dump that expensive gym membership and save yourself a little extra money each month.
9. Reduce Your Rent Or Mortgage
Of all the fixed expenses in your financial life, your rent or mortgage is likely the biggest expense in your budget. And while reducing how much you pay for the roof over your head is one of the more drastic ways to lower your fixed expenses, it might just make the biggest impact.
To put it plainly, if you want to add a good amount of financial margin to your life, you should figure out a way to reduce your rent or mortgage.
If you’re a homeowner, that might mean renting out a room to a friend, or maybe even selling your house and downsizing.
As a renter, you may need to find a roommate, or just move to a cheaper area of town once your current lease ends.
Either way, this is one of the best methods for reducing your fixed expenses.
10. Stop Renting A Storage Unit
If you have a storage unit filled with a bunch of stuff you barely ever use, then it might be time to part ways with it (and all the crap you’re storing there).
Getting rid of your storage unit could reduce your monthly financial outflow by a significant margin. Moreover, it can be extremely therapeutic to purge all the random stuff you’ve been paying to store.
- 21 Simple Ways To Reduce Your Cost Of Living
- Why You Can’t Save Money: 10 Money-Sucking Reasons
- 5 Urgent Things To Do If You Have No Savings
- How To Save $1,000 Fast (10 Killer Tips)
- 21 Ways To Save For A House FAST
- Sick Of Having No Money? Do These 10 Things!
Reducing your fixed expenses is one of the most financially beneficial things you can do. Not only does it increase your financial margin, but it reduces the complexity of your financial life as a whole.
The question is… what fixed expenses are you going to cut or reduce? Be sure to comment below.