The average family spends about $5,000 per month. And that’s just the average! There are families who spend much more than that.
But how do you know if your spending is reasonable? What should you be spending and what can you save on? It might seem like a lot of work to figure this out, but it doesn’t have to be complicated. In fact, there are many easy ways to cut back on expenses without feeling any real pain in your daily life.
How to save $500 per month on a family budget
The first thing you should do is talk to your family and figure out what things are most important for everyone. The next step would be to prioritize your spending and find where you should cut back on. For example, if cable or internet service is something you don’t need, then get rid of those subscriptions. Perhaps you can reduce the grocery bill by cooking at home more often, which will not only save you money but also time because there’s no need to go anywhere else. If you’ve been paying for services that your children can provide themselves with a little guidance, it may be time to cut back on some of them to save money.
It’s also important to put money away for a rainy day so if the car breaks down, or there’s a sudden illness in the house, you’ll be prepared to deal with those unexpected expenses without having to dip into your savings account. Think carefully about whether you’re getting good value for all your purchases.
If you’re looking for more information on how to start a family budget or need tips on cutting back,
Create a list of all the ways you can cut back and save money without feeling any real pain in your daily life
You can save money in several ways without really dealing with any pain. One way to do this is to ditch cable and find other ways to entertain yourself: going to a park, starting a book club, or making dinner from scratch with friends. Another option is cooking at home more often and cutting back on restaurant meals or takeout so you can cut back that way. Making your own coffee at home is also a good way to be frugal. You can also save money on your grocery bill by shopping around for sales, comparison shopping and using coupons.
Another big way you can keep more of your money is to pay off credit card debt. The sooner you pay down your balances the better – not only will you get rid of those high interest rates, but it’ll be a lot harder to spend more than you can afford if your debt is paid off. If you have credit card debt, look for over-the-limit fees to really save some money – just make sure that you’re paying down the balance as much as possible so that you don’t owe more in interest.
Look through your budget and find the money that’s going to waste each month and see if you can cut back on spending. For example, perhaps you don’t need that gym membership or movie package anymore. If you don’t watch all those movies or go to the gym regularly, cancel them – it’s money that could be better spent elsewhere.
The more debt you have the more expensive every little purchase becomes because you’re paying interest on top of your purchase. Stop racking up more debt by sticking to a budget and making sure that you don’t spend more than you can afford. If it’s something you need or want, set money aside in advance so there isn’t a chance that it’ll come out of the family budget without careful planning first.
Another way to cut costs is to start an emergency fund. If your car breaks down, or there’s a sudden illness in the family, you’ll be ready to deal with those unexpected expenses without having to dip into savings.
As soon as you have some spare cash, put it away for a rainy day because when an urgent expense comes up and you don’t have any money saved, you’ll be forced to take out a loan or put it on a credit card – which means more debt down the road. If money’s tight, start with putting away pennies and nickels so over time you can start growing your emergency fund without feeling like you’re spending any real money.
Tips for how to find out what’s driving up your monthly costs so you can continue to cut costs and save money
The next step to finding out what’s driving up your monthly costs is to look at your credit card statements. Look for those charges that you don’t get any value from and cancel them. For example, maybe you don’t need a gym membership or movie package anymore. If you don’t watch all those movies or go to the gym regularly, cancel them – it’s money that could be better spent elsewhere.
Here’s 6 simple ways for a typical family of 4 with 2 adults and 2 kids under 12 years old:
- Reduce your cost for groceries by shopping at Costco instead of whole foods or trader joe’s.
- Reduce your entertainment costs by cutting back on cable or trading it for streaming services.
- Cut out a car payment by selling your car / leasing a new one instead of buying it.
- Rethink your cell phone plan and consider unlimited data if you need to be connected all the time.
- Get rid of satellite or cable tv and watch your favorite shows on streaming services.
- Conserve energy by turning down the heat in your home if you’re not there, unplugging electronics at night, and using appliances efficiently.
There you have it. Some very simple ways to cut back. This is just the beginning of your journey, though. Once you’ve taken these steps, it’s important for you to understand where all your money is going every month so you can continue to cut costs and be more economical.
This will take some work but could be worth thousands of dollars a year in savings.
This will take some work, but it’ll be worth it. If you keep all 6 of these changes up for a year, you could save more than $500 per month! That’s over $6,000 per year. Who wouldn’t want to have that kind of extra cash at their disposal?
Why it’s important to start today, not tomorrow or next week or next month
If you’re reading this, then there’s probably a good chance that you know how important it is to have savings for emergencies. But are you living in the moment and saving what your budget allows for unexpected expenses or are you hoping and waiting to save when an emergency arises?
Many people rely on credit cards to get them through tough times. While a credit card can be a lifesaver, it can end up costing you more than just interest rates if it gets out of hand.
So don’t wait until an emergency strikes before you start thinking about how to save money on a family budget – start today.
Having a family budget is one of the best things you can do for your finances. Having this financial plan in place will not only help with saving money but it will also allow everyone to know where they stand financially and what’s expected of them within the household. It may seem like $500 doesn’t make much difference, but when put into perspective that’s money which could be used towards something else!
We spend so much on necessities that we forget sometimes how quickly those little extras add up over time.