8 Easy Tips to Lower Your Monthly Bills
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Everyone has their own unique collection of monthly bills, which can range from mortgage payments and home utility bills to cellphone bills, grocery bills, monthly subscriptions, student loan payments, child care costs and more. But regardless of which payments hit your checking account each month, they can take a toll on your bottom line over the course of a year.
According to a 2018 survey from LendingTree, people have, on average, six late payments on their credit report. But rather than falling into this category, you can implement some simple strategies that will lower your monthly bills and, in turn, increase your chances of making payments on time.
How to lower your bills: 8 tips to follow
Fortunately, there are some simple ways to lower your bills and free up some cash for financial priorities, such as your retirement savings.
1. Refinance your debt
When you refinance, you take out a new loan (often a personal loan) and use it to pay off an existing debt. For example, you could take out a personal loan to pay off your car. The new loan could have a lower interest rate and fewer fees if you qualify. That way, your monthly bill could be lower and more of your monthly payments go toward your principal balance.
You could also refinance to extend the repayment period on your debt. Doing so will lower your monthly payments to free up cash month to month. However, a longer repayment term means you’ll pay more in interest over time.
If you decide this pursue this option, be sure to research lenders carefully. Review their terms, conditions and fees. You may also get pre-qualified for loans with soft credit checks in order to get a glimpse at what you may be paying for a loan.
2. Consolidate your debt
Whether you have multiple credit cards with a balance or several student loans from your college years burdening you, consolidating your debt may help you lower your monthly payments.
When you consolidate debt, you take out a new loan to pay off multiple debts at once. Instead of making payments to multiple student loan lenders, for example, you’ll have one consolidation loan to make payments on. That could mean you end up paying less each month, with a potentially better interest rate to boot.
3. Consider a balance transfer card
If you’ve accumulated a lot of credit card debt and your interest rates are high, you might want to consider a balance transfer to consolidate credit card debt. With a balance transfer, you move your debts over onto a new credit card.
To maximize your cost savings, you should look for a balance transfer card, which can come with a 0% interest promotional period. Your promotional period may last 18 months or longer depending on the card, buying you time to pay off your debt with no interest charges. You may have to pay a balance transfer fee, however, which is a percentage of the balance you’re transferring.
4. Shop and eat smarter
You can save on groceries by meal prepping and throwing together a grocery list before hitting stores. Doing so keeps you focused while you shop, and helps ensure you use all of the food you buy on your trip.
Cooking at home takes commitment, but it’s a simple way to save money each month. To maximize your savings, consider using discounted gift cards and coupon apps, such as Target’s Cartwheel app and Ibotta to save on groceries. There are also browser extensions, such as Ebates, that let you earn cash back when you shop online.
5. Slash energy costs
Let’s face it, there’s little to no satisfaction that comes from paying your monthly utility bills — except, of course, that it’s something that must be done in order to keep the lights on and the pipes from freezing in frigid temperatures. Regardless, there are a number of steps you can do to lower your home’s energy costs and save on your monthly utility bills:
- Air-dry your dishes instead of using the drying cycle on your dishwasher.
- Turn off lights, televisions, smart speakers and computers when they’re not in use.
- Replace your heater and air conditioner air filters once a month and install CLF or LED light bulbs and programmable thermostats.
- Consider installing aerating, low-flow faucets and showerheads.
- Lower your water heating setting to 120 degrees.
- During the winter, keep window coverings on your south-facing windows open during the day to allow sunlight to naturally warm your home.
You can also have an energy audit, where a professional comes in and identifies areas in your home where you can make small improvements for increased energy-efficiency. You can even consider this do-it-yourself energy audit tool.
6. Cut unused monthly subscriptions
Whether you subscribe to a monthly service like a grocery delivery service, wine club or a health and fitness center, seek out services that you can do without to reduce your monthly bills. Determine how often you use each service and whether you’ll truly miss these services if you cancel or freeze them for a given period of time. Don’t overlook minimal fees that might come from newspapers, magazines subscriptions and apps that charge a monthly fee, since these can also add up over time.
7. Negotiate to land the best rates
Whether you’re looking for health insurance, homeowners insurance or auto insurance, be sure to shop around for the best rates. Sometimes an employer or an organization like AAA will offer discounted rates. Also consider bundling your homeowners and auto insurance, if possible, to land a better rate.
When it comes to cable bills, negotiating and researching the best options can also go a long way. Cable companies have a reputation for increasing fees over time, especially when contracts run out. To reduce the chances of this happening, be sure to keep a close eye on your monthly bills. When you begin a new contract, find out the terms of your agreement and set a calendar reminder for when you’ll need to call and renegotiate your contract.
Also, seek additional ways to reduce costs, such as by skipping on extra channels or services like DVR. You can also eliminate your cable bill altogether by using streaming services like Netflix or Hulu instead, which are less expensive.
8. Remember that location matters
If you’re truly set on lowering your monthly bills, consider relocating to an area where the cost of living is lower. MagnifyMoney, which is an affiliate of LendingTree, looked at 107 metropolitan areas to determine the best cities to live on a tight budget. The top-ranking metros were Madison, Wis., Grand Rapids, Mich., and Dayton, Ohio.
With these tips in mind, you’ll be well on your way to lowering your monthly bills and freeing up cash for things that bring joy and satisfaction to your life. Careful research, planning and budget-friendly behaviors can go a long way for reducing your monthly expenses. In turn, you’ll be sure to reap the benefits.