The average American household brings in a little under $75,000 a year, yet struggles with debt and doesn’t enjoy the financial security that such an income should warrant. Escalating household bills are one of the biggest reasons for this lack of security, and when you look at how much of this income household bills are consuming, it’s easy to see why.
Every year this $75,000 household will spend roughly $7,000 on food; $9,000 on transportation;$2,800 on entertainment; $10,000 on insurance and health care; $2,000 on clothes; and $1,000 on alcohol and cigarettes.
And that’s only scratching the service, there are many expenses that make those household paychecks look like a pittance. So, let’s take a look at some top tips to reduce your household expenditure.
10. Install Energy-Saving Lightbulbs
An energy saving bulb can save you anywhere from $0.40 to $0.60 a month, or up to $7.20 a year. Doesn’t sound like much, does it? But if you multiply that by how many lights you have in your house it starts to add up.
The average US household has 40 lights, which means some households can save as much as $288 a year. A more realistic figure is between $80 and $160, as many of those lights are barely used, but that’s still a great saving.
To save even more money, make sure you only make the switch when your current bulbs actually expire. Just buy a batch of energy-saving bulbs and use them to replace your expired high-energy bulbs.
9. Turn Off Electronics
Standby mode is not your friend. Electronics still draw power when they are in this mode, and if you’re guilty of leaving computers, consoles and other electronics on around the clock, then they’re consuming unnecessary power.
Turn electronics off when they are not in use, it could save you tens of dollars over the course of a year.
8. Seal and Insulate
There is always something you can do to make your home more energy efficient. Insulate your walls and doors, make sure there are no gaps letting in air and pests, and spend some time on the garage walls and door. Gaps and poorly insulated walls a can render your AC or central heating ineffective, which forces you to increase the power, thus spending more money.
7. Take an Honest Look at Your Subscriptions
You don’t need a $50 monthly gym membership if you only go there to use the sauna or run on the treadmill once a month. Be honest with yourself, stop telling yourself, “But I might need it in the future” and start thinking about what you need now.
The same goes for any media services you don’t use. We’ve already looked at the huge prices that Americans pay for subscription services. We all get drawn in because $5 or $10 a month doesn’t feel like a major expense. But those minor expenses add-up and can cost you hundreds of dollars a year.
6. Stop Eating Out
We mentioned already that the American household food bill is over $7,000. But what we don’t mention is that most of this is spent on dining out and $500 of the grocery budget goes on food that ends up in the trash.
Make better choices when eating out, limit the amount of times that you do it, and plan your grocery shop so that you don’t buy more than you need. If you find that you have a lot of food that is about to expire and won’t be used, consider cooking some big meals and freezing them for later.
5. Buy in Bulk
Fresh food should be bought in limited quantities to reduce waste, but the same can’t be said for dried and tinned food. Buying these in bulk can save you a lot of money—just make sure you have the space to store them.
The same goes for toiletries and other non-perishable essentials. If you find a good deal and have a stack of coupons to use, go mad. You’ll save yourself piles of money over the course of the year. What’s more, if you run out you won’t have to panic buy and can just head to the pantry or toiletry cupboard.
4. Consider Growing Your Own
If you have some yard space, put it to good use and grow some of your own food. The trick is to grow something that you eat and buy a lot of, but to avoid low yield and inexpensive crops. Root vegetables, for instance, are relatively easy to grow in most climates and produce quite a large yield, while lettuce does not and can be bought cheaply at the grocery store.
If you don’t have a yard but still want to grow your own food, try growing some herbs near a window. They grow like crazy and can save you money on fresh and dried herbs.
3. Move Suppliers/Negotiate
There are always savings to be made on energy bills and insurance. The companies that have your business spend most of their time trying to acquire new customers and completely neglecting the ones that they have. Take advantage of this fact by trying to negotiate a new price and moving somewhere else if they do not give it to you.
This works with a number of bills—anywhere there is fierce competition and people who want your money.
2. Get an Automated Thermostat
Automatic thermostats let you set the temperature of your home when you’re not there. You can ensure the house is nice and warm (or cool) for when you get back from work and you can reduce wasted energy the rest of the time. Smart thermostats also offer a number of energy saving features.
1. Carpool or Take Public Transport
The transport costs that we mentioned at the outset of this article are the most striking of all, and they don’t even include the amount of money you spend to buy a car in the first place, or the fact that many American households have two cars.
Getting rid of a car is a big ask for some people—especially those who live in rural areas far away from their place or work—but if you can live without a car then you will have a lot of extra money in your pocket at the end of the year.
You can sell the car you have, use the money to pay off debts or to go toward your mortgage, and then try taking public transport, saving massive amounts on fuel, maintenance and car loan payments.
At the very least you should try to reduce how much you use your car by taking advantage of carpools or ride-share programs. You’ll spend less on gas, you’ll do fewer miles in your car and you’ll also make new friends or establish better relationships with old ones. Just make sure you return the favor by driving your friends to work every now and then as well.