4 little-known ways to cut expenses when you're in debt

When it comes to cutting expenses, there is a lot of helpful ideas on how to save a few hundred dollars on your monthly bills, but not every idea will work for everyone. If you are considering lowering your monthly expenses, there is only one thing I want you to remember – you have to understand what your choices are, how you can change your spending habits and the consequences of your decisions.

If you have debt, cutting expenses is not easy. It's hard work and takes a lot of determination and investigative work. A huge part of this commitment is putting away your credit cards. I am not saying to give up credit cards entirely or forever. Having only one credit card to use for emergencies if you have no savings is fine, but should be a last resort.

Everyone's needs are different; therefore, everyone has different expenses and priorities. It would be impossible for me to list all of the ways you could cut back, but I do have four ways you might want to consider. No matter what strategy you use, always remember to keep things realistic and obtainable. Nothing is worse than setting yourself up for failure before you even begin.

Read: How to Find Extra Money Hidden in Your Budget

If you are needing more money at the end of the month or working towards a financial goal, reducing your expenses is critical. Now, I am not saying it has to be radical. Cutting your expenses by a few hundred dollars every month is a huge step and one you should be proud of. It's also important to remember that when cutting costs, some require bigger sacrifices than others. When reading this article, there are some other things I want you to keep in mind:

  • If you are trying to decide if a small change will help your financial situation, calculate the savings over a year, not just over a week or month. Look at the big picture, and make your decision from there.
  • What do you need to make you happy or what will get you to your end goal? During my financial journey, I have learned that experiences make most people happy, not purchases.


Raise your hand if you are guilty of this. Trust me; I am behind this computer raising my hand right now. There are a lot of people who respond to anxiety and financial pressure by going shopping, buying items they really don't need, or by going window shopping (which usually ends up with making a purchase).

If you already in debt, then this can lead to huge problems. Pressure-related shopping not only digs you deeper in debt, but there is a chance that this type of spending can also cause you problems if you later decide to file for bankruptcy. Bankruptcy is never the first option I give to people who have a spending or debt issue, but it is an option. If your creditors can prove that you ran up your credit cards knowing that you could not pay them back, you may lose your right to erase those debts in bankruptcy.

Read: 3 Spending Habits That Are Setting You up for Failure

If you know you suffer from pressure-related shopping, it's time to start thinking about what influences your decision to shop and what to buy. Every single day, we are surrounded and affected by the views of friends, family, neighbors, and even advertising and marketing executives. You can resist the urge to spend unnecessarily by taking 30 seconds to pause before your buy. This is what I like to call the "time out" period. During this time, ask yourself, "Why am I buying this?" A "time-out" period doesn't have to happen every time you go to the grocery store, but it should be something that you regularly do. If your answer to this question is, "because I just want it" or "because my friend recommended it to me," then I suggest waiting before you complete a purchase. The truth is, you'll probably realize later that the money you would have spent could have been used for something way more important, such as paying off debt or saving for that family vacation.

Some people think, "Why does it matter? It's only $40?" If you add up all of those $40 unnecessary purchases at the end of the month, you might surprise yourself with the actual cost.

5 financial myths that just aren't true
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5 financial myths that just aren't true
#1. "Home are great investments"
"If you're young and are burdened by debt, renting is probably the better bet for you. There's nothing wrong with renting either! Buying a house means putting a LOT of cash down and taking on a mortgage. Mortgages aren't exactly flexible. Then you've got to worry about monthly maintenance, taxes, insurance, etc. Owning a house is expensive, illiquid, and not something you should consider until you are REALLY REALLY REALLY ready." -The Funny Financial Planner
#2. "Investing is only for the wealthy"
"Wrong. Wrong. Wrong. This one just downright annoys me. Maybe you were conditioned to believe this? I'm here to tell you it is a MYTH! Investing is not as complicated as you might think. Sure, there's a learning curve, but with a little help and research you can begin. Maybe you've already begun? Do you have a retirement plan (401k or IRA?), then congratulations, you're already an investor. And guess what?! You don't need $100,000 to start." -The Funny Financial Planner
#3. "A will guarantees your assets will be distributed how you want"
"This is a myth my friends. In fact, if the beneficiaries named in your retirement plans (401k, IRA, Roth IRA, etc.) are different than those you've named in your will...the assets go to the beneficiaries on the retirement accounts and NOT those named in your will. Make sure your will and the beneficiaries you've named on the accounts are in agreement." -The Funny Financial Planner
#4. "I don't want to invest now... I'm trying to time the market"
"'Timing the market' means you think you can figure out the best times to buy low and sell high. Well here's a quote from famed investor Peter Lynch, "I can't recall ever once having seen the name of a market timer on Forbes' annual list of the richest people in the world. If it were truly possible to predict corrections, you'd think somebody would've made billions by doing it." That's all you need to know. It's just not possible. It's best to get in as soon as possible and have a solid, long-term, passive plan, with proper diversification." -The Funny Financial Planner
#5. "I'm too young to worry about retirement"
"Nonsense!!! Time is the best tool you have to build wealth. The longer you wait, the less money you're going to have at retirement. Even if you think it's a long way off and you don't have the money to start now, begin anyway. Do what you can. It will make a HUGE difference in the end. Time coupled with compound interest is pure magic my friends. (Click on the words "compound interest" to see Investopedia's explanation). It's truly the eighth wonder of the world." -The Funny Financial Planner


Also known as PMI, this type of insurance is usually required if the down payment on the loan you used to purchase your house was less than 20% of the sale price. PMI protects the lender if you default on your home loan. What most people don't realize is that once you have more than 20% equity in your property, there is no longer any need for private mortgage insurance and it should be canceled.

In 1998, a law was passed that states that the lender of your home loan is supposed to automatically terminate or cancel your PMI policy when you first owe less than 78% of the original value of the property. This law only applies to loans made after July 1, 1999. There are particular types of loans such as certain high-risk loans and affordable housing programs where this doesn't apply. Even if your home loan does not fall under this law, you should still reach out to your home loan provider when you have 20% equity in your home to see if the PMI can be canceled.

Read: A Simple Way to Reduce Your Mortgage Payments


Everyone needs utility service to survive, but you might be paying too much. If you have a hard time paying for your utility bill in the hottest months of summer due to air conditioning needs and during the coldest months of winter due to extra heating, then you might want to look into an option called a level payment plan. Getting on this type of program can literally save you one-half to one-third on your utility bill. The best news, it's usually offered for free by your utility company.

A level payment plan allows you to avoid running up debts during high-usage months by averaging your expected bills. Your yearly bill is divided into equal monthly installments, which means you pay the same amount every single month based on average use rather than actual use.

For example, if your total gas bill for a year is $1,400, you would pay $116.67 each month instead of $250 to $300 a month in the winter, and $50 to $60 a month in the summer.


Most of the time, you can lower your insurance costs by hundreds of dollars by doing two things – reducing your coverage or increasing your deductible. If you decide to reduce your deductible (the amount you pay before your insurance plan starts to pay), just make sure you can afford the deductible if you need to make a claim.

For car insurance, always make sure to get the minimum required by your state and opt for a higher deductible. Your rate is likely to be lower the longer you're with a carrier. If you find a better deal, always make sure to ask your current carrier to match it before switching.

If you own a car and a home, you can usually get better rates if you have both insured by the same company. If you are doing comparison shopping for better prices, see if your state department of insurance publishes rate comparisons. You can find state insurance department websites from the National Association of Insurance Commissioners (www.naic.org).

Remember, not all insurance is worth it. You may decide to get rid of it all together. Expensive credit insurance and some kinds of life insurance should be reviewed periodically.

The post 4 little-known ways to cut expenses when you're in debt appeared first on The Budget Mom.

RELATED: 5 foolish mistakes investors make everyday

5 foolish mistakes investors make everyday
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5 foolish mistakes investors make everyday
#1. Chasing performance
"Investing in the stock market is a numbers game. You want to see a return otherwise you're treading water at best. Countless times I would hear investors say, "I've only seen X% return in the past quarter!" and want to jump ship. This short-term thinking often gets you nowhere and brings added commission costs." -InvestmentZen
#2. Thinking you can beat the market
"The twin sibling of chasing performance is believing you can time the market. In many cases, market timing results in investors selling low and buying high – the opposite of what we should be trying to accomplish. As the Peter Lynch quote goes, "There are no market timers in the 'Forbes 400,'" yet the appeal draws many investors who think they can time the market." -InvestmentZen
#3. Listening to the media
"The media may be fodder for a good laugh, but in most cases, they're simply that when it comes to investing. "By far the biggest mistake I see today is letting the media dictate how you invest. While the media is loud and comes from every direction today, they simply don't know what's in your best interests," says Clint Haynes, CMFC® of NextGen Wealth." -InvestmentZen
#5. Ignoring your investments 
"Ignorance can cost investors thousands of dollars in wasted money. Whether it be a corporate action or price plummet, if you never check on your investments, you can lose big." -InvestmentZen
#4. Not being properly diversified
"Proper diversification is a hallmark of sound investing. Sadly, too many think picking a small handful of stocks means they're diversified, without realizing that they're opening themselves up to significant risk.

On the flip side, many investors think that because they invest in mutual funds or Exchange-Traded Funds (ETFs), they're diversified. Little do they realize that if they don't look at what those funds hold, they could own a group of holdings that leaves them more open to risk than they realize." -InvestmentZen


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