10 Ways to Cut Your Monthly Budget

Save money painlessly by negotiating discounts for monthly household expenses.

By Laureen Miles Brunelli, About.com Guide

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OK, so you've already cut your monthly budget in an effort to build your savings. Daily lattes are gone, dinners out are rare, and perhaps you're saving money by working at home. What else can you do to cut your monthly household expenses? Cutting your monthly budget again doesn't mean trimming necessities; it means saving money on them. That might include trimming grocery costs and comparison shopping for items likes clothes and household goods.
But when you save money on these purchases, each discount only happens once. To really maximize your savings, cut your recurring expenses, and let the savings add up.

Review Your Monthly Budget Expenses

We tend to think that the costs of goods and services only goes up, but, in fact, they sometimes goes down. Competition and new technology often bring down prices for services like cable, telephone and Internet--giving us an opportunity to cut monthly budget expenses painlessly. So consolidating your business at one company or signing up for bundled services also might mean a discount.

But few companies advertise to existing customers that they have lowered their prices. You have to review these monthly household expenses periodically to be sure you are getting the best deal.

Here's a list of 10 places to cut your monthly budget:

1. Insurance

Compare prices for auto, home, health, business and life insurance. Consolidating at one insurance company could lower your insurance costs. That might mean you'll need to take your business elsewhere to save money. But before you do, be sure you're getting all the discounts you deserve at your current company.

Consider raising your deductible for lower rates. Ask your agent what other discounts you might qualify for. Often working from home could mean a discount on auto insurance.

2. Financial Fees

Are you still paying a monthly fee even though your bank now offers free checking? Particularly if you have direct deposit, most banks offer some type of free checking. I found I was paying $8 month for only a few services (like free certified checks) that weren't available on the bank's free checking program.

Do you incur ATM fees because your bank's machines are not convenient? It might be as simple as reviewing your current bank's options or you might consider migrating your account to an Internet bank, especially if earning more interest is important to you.

3. Cable and Satellite Television

Competition in this industry means that new packages are available that could save you money. Television and phone service providers are now bundling together their services, so consolidating your phone and TV services at one company may save money.

New customers, whether bundling services or not, usually get the best deals, so it may be necessary to switch providers. But sometimes threatening to switch will net you a discount. Also, if you're really serious about saving money, consider downgrading your package by cutting out pay cable channels.

4. Cell Phone

Cell phone companies love to offer free phones to induce you to sign up for another two-year contract. Before you renew your contract ask yourself a few questions:

• Do you really need a new phone and what is the hidden cost up sticking with your plan to get it? (I got my cell phone from Ebay for $30 rather than take the free one and the two-year contract.)
• Are you using all the minutes allotted?
• Are you paying for Internet and texting but not using it enough to justify the cost? Or are you using it so much that another plan might be a better deal?
• Would a cheaper plan or a prepaid cell phone serve you just as well?

5. Telephone

Many people are getting rid of their landlines entirely. However, if you work out of your home, this may not be a feasible option. But if you have a separate fax line, you might consider discontinuing it. With a scanner, you can email documents as PDFs instead of faxing.

Like cable and Internet providers, landline phone service packages keep getting cheaper as more competition comes on the market. Consider VOIP or cable phone services. If you do stay with your traditional telephone company, be sure you are getting the cheapest long distance service and not paying for services you don't need.

6. Internet Provider

Shopping around for a better package of telephone services might also save you on your Internet access if you use DSL. But there are many other options for Internet services including cable, satellite and a whole host of wireless Internet options.

The Internet is a telecommuter's lifeline, so do your research first. Be sure if you change service providers the new one will offer the services and reliability your business needs.

7. Refinance Your Home

Refinancing your home can cut your monthly budget expenses the most significantly, sometimes saving you hundreds of dollars per month.

But refinancing involves many upfront costs (interest points, taxes, fees, etc.), so it may take several months (or even years) for you to actually realize these savings. And if you're not planning to stay in the house for long, you could actually lose money on refinancing. Carefully consider the pros and cons of refinancing your home before taking this cost-cutting step.

8. Credit Card Rewards Points

If you have a credit card with rewards points, use them. But use them wisely. Keep in mind that credit card companies offer points to induce you spend more. So don't pay more (by racking up interest or fees) in order to get rewards points. To accumulate points faster, concentrate your spending on the one card that offers the reward you will use (for me that's the one with Home Depot gift cards) rather than spreading your spending among several cards.

Saving rewards points for your dream vacation or another splurge runs the risk of the points expiring or never being used. Using points on a regular basis helps you cut your monthly expenses. Consider using rewards systems that pay cash or offer gift cards that you will actually use.

9. Utility Bills

Like phone and cable industries, your utility company likely has more competition than it once did. Often you can change gas or electric suppliers for a better price on your energy needs, while still remaining a customer of the same utility company for billing and delivery purposes. However, these other suppliers don't always have a better price so be sure to do some comparison shopping.

But the old-fashioned way to save on utility costs is simply to conserve electricity or waste less water.

10. Credit Card Interest Expense

Monthly interest can be a huge expense for those with a large debt. Making only a minimum payment means the monthly interest eats up most of your payment. Reducing interest can mean more money for other expenses or paying off debt faster.

One way to lower your interest is to simply ask for a lower interest rate. Companies will often oblige to keep your business. If they don't, consider a balance transfer to another card with a better rate. Read the fine print, though, balance transfers sometimes offer rates that go up after a period of time and usually involve fees.

Avoid interest in the first place by saving for holidays and other known expenses in advance.