Help with Lowering My Bills

The first step to lowering bills and saving money is to thoroughly understand your current financial situation. Look at what you are spending and how much money is coming into the household. You may approach lowering your bills haphazardly and obtain some small savings. However, if you create a budget you will understand the overall picture of your finances. Many tools are available to help guide the process.

Budget Considerations

• You can create a budget on your own or you can use free resources such as offered by Mint.com, an online money management company. Identify where you are spending your money and then set goals for reducing spending. After you have created the budget, track what you are spending. Don't forget to include school lunches, parking or even items you know you will cut back on such as going to the movies every week. Also, make sure to show your financial goals clearly. For example, if you want to pay off your car, put a specific deadline on the payoff so that the goal isn't vague.

Lower Expenses

• Look at ways to lower your bills. Start with bills such as groceries. Groceries are different from a regular bill such as car insurance because food isn't a set amount each month. Go over your grocery receipts closely and look at ways to cut back. If you buy items like soda or chips, it may be time to look at healthier eating habits. Even a five- or ten-dollar savings will free up money. Now, look at what you spend on ATM fees, credit card fees and other places where a bit of planning can reduce costs.

Evaluate Bills

• Examine each bill that you have and investigate alternatives. Get estimates from other companies for car insurance or cell phone plans. Look at alternative energy companies. Reduce your satellite channels. Understand your energy costs. For example, if you know that your washer uses a certain amount of electricity, it will remind you to only run full loads.

Lifestyle Changes

• You may need to make several lifestyle changes to reduce your bills. If the budget is very tight, you may need to cancel health-club memberships or eliminate an extra vehicle. According to Mint.com, your housing expenses should be 33 percent or less of your income, and debt shouldn't exceed 30 percent of your income. If your expenses are higher, you may need to relocate or get a part-time job.

Caution

• When you begin to see a few extra dollars in savings, you may be tempted to spend the money. Resist this temptation. Use the money saved to pay down a credit card or paying off an auto loan. Changing your spending habits may appear difficult, but with a positive attitude, you can find low-cost enjoyment. Lowering your bills does not mean you must stop living a full life, although it does mean closely examining your life.