8 Ways To Afford $5,000 in Added Expenses Next Year
Inflation is still rampant, interest rates are through the roof, and life seems to just keep getting more expensive.
According to a recent survey by GOBankingRates, over 33% of Americans had their expenses go up by at least $2,500 in the past year and about 11% paid an extra $5,000 or more.
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Adding an additional $2,500, $5,000 or more to your bottom line can really eat into your savings and can quickly slow down your financial goals. So, if you expect more of the same next year and need a few ideas on how to afford an additional $5,000, look no further.
Here are eight ways to help afford another $5,000 in expenses in 2024.
Get on a Budget (Yes, Really)
The first step to getting ahead financially is assessing your current financial situation. You need to review your spending over the past 90 days, categorize everything and see where your money has been going.
Then you can review your spending and find areas of waste that you can quickly cut out. This can save you money every month without much effort.
After this exercise, you will want to put together a budget based on your past spending. It’s important to budget a little extra in each category when you first get started to ensure you can stick to the budget. You should commit to tracking your expenses weekly and reviewing your progress on a monthly basis.
This can help you set good spending habits and help you become aware of where every dollar goes throughout the month. And you can possibly save hundreds per month just by getting on a budget.
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Cancel Subscriptions You Forgot About
Subscriptions are a way of life now. But with hundreds of services that offer low monthly payments these days, it’s easy to sign up for a service and forget about it — and end up paying every month without knowing it.
Many subscription services offer free trials or introductory sale prices, allowing you to get services for a month or so for free or at a very low cost. But then the free trial goes away and you’re signed up for a monthly payment automatically. If you lose track, this can be a good chunk of change gone every month — up to hundreds of dollars per year.
To cancel unwanted subscriptions you’ll want to comb through your spending over the past few months. Find any charges you don’t remember or that you don’t want anymore, and then cancel each service. This can instantly save you money.
There are also services that will do this for you. Apps such as Rocket Money allow you to connect your financial accounts and will help find all of your subscription services automatically. You can then have them cancel the services for you (for a fee).
Sell Things You No Longer Need
If you’re looking at higher expenses in the coming year, you might want to consider selling a few things around the house. We all have things that we no longer need or can live without.
To do this, you’ll want to go through your closets, garage and maybe even your storage unit to find what you can sell. Then list those items on apps such as OfferUp or Facebook Marketplace to sell them locally. If it’s a more valuable item, you can use eBay to sell and ship it.
I went through this exercise when moving out of our home at one point, and made over $7,000 in sales over the course of a few months. This was from things we simply no longer needed. This can go a long way toward helping pay for higher costs next year.
Live Somewhere Cheaper
If you don’t have much room in your budget to cut, you may need to look at a more drastic change to help find an extra few thousand dollars. One way to do this is to consider moving to a lower-cost living situation.
Whether your rent has been raised over the years or your house is simply too expensive to live in, moving to a lower-cost apartment or home can help you save a significant amount of money.
Now, moving costs money, so it’s important to calculate the cost before you consider moving. But if you can lower your housing costs by hundreds per month and find a way to move without spending thousands, you can come out ahead.
This is not for everyone; but, if you really need to save more money and can’t afford staying in your current housing situation, moving can be a great solution.
Rent Out Your Yard (or Garage)
If you own your home and want to bring in extra cash for doing very little extra work, you can consider renting out parts of your property for storage. Websites like neighbor.com allow you to rent out your yard or garage for people to store boats, cars, RVs or other items while paying you a monthly rent.
If you have some land available and don’t mind people dropping their stuff off on your property, you can easily earn hundreds per month. If you are able to simply earn $100 per month from five people, this could earn you over $5,000 per year.
Renting out unused space is a great way to earn extra funds without working a second job.
Pick Up a Side Hustle
If you want to be able to afford higher expenses in the coming year, a side hustle can be one of the best ways to do this. Many side hustles can earn you far more than $5,000 on the side if you pick the right one and put in the effort.
With the gig economy continuing to grow, it’s easy to start driving for Uber or delivering meals with DoorDash. You can easily earn $1,000 per month with a simple side hustle that you do a few nights per week.
If you want to make money from home, you can create and sell items through platforms such as Etsy, or you can start a dropshipping business through Shopify. Or you can start freelancing for small businesses to earn money from skills you already have (such as writing or video editing).
Side hustles do require time and effort, so it’s important to pick one you can stick with. But some can grow into valuable side businesses and even replace your full-time income if you put in consistent effort.
Negotiate Your Bills
If your bills continue to go higher, you might be able to save money by negotiating your bills down. Many services offer introductory pricing for new customers; but, after a period of time, those bills rise in price significantly.
You can call your service providers (such as a cable company or internet provider) and let them know you’re considering other options that offer lower prices. Ask them what they can do to keep you as a customer and see what price discounts are available. This can be a great way to save hundreds of dollars per year.
Not all service providers will play ball, so you may need to actually switch services to see the discounts. But changing cell phone providers, internet service or other companies can save you money immediately and may be worth the effort.
Negotiate a Raise
If you’ve been doing well in your current position, you might be due for a raise. If you want to keep up with rising costs, negotiating a raise can be a great way to get there.
The best approach is to make sure you’re documenting your performance throughout the year. Keep tabs on your accomplishments and how you’ve saved the company money or made it more.
When you ask for a raise, make sure to highlight what you’ve done, how you’ve expanded your role and your interest in taking on more responsibility. Let your employer know you would love to continue growing in your position or your desire for a new role you can grow into in the future.
If the negotiation is successful and your employer has the ability to give you a raise, this can easily offset increasing costs in the future.
Bottom Line
Yes, life is simply getting more expensive. And if you expect costs to continue rising next year, it’s important to find ways to make up the difference. Whether you choose to save more money or increase your income, there are many ways to afford increased expenses in the future. Just make sure you have a plan that you can stick to without burning out.
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This article originally appeared on GOBankingRates.com: 8 Ways To Afford $5,000 in Added Expenses Next Year
