When it comes to building wealth, budgeting and saving money are important steps in the process. By doing them both, you’re able to buy assets and watch them grow!
Unfortunately, most people’s recurring costs have a large impact on their ability to save. These expenses consume the majority of their income, preventing them from putting money aside and reaching their financial goals on time!
Oftentimes, your recurring costs get paid automatically, too. You may have them set up on auto payment and don’t realize the amount you’re spending. Then at the end of the month, you might find yourself wondering where your hard-earned money went and how you’re going to save!
Below, you’ll learn the difference between non-recurring and recurring costs along with how to save money on your most common regularly occurring ones!
Some expenses are sporadic. They tend to catch you off guard and take you by surprise. You may incur them randomly or one time, and then may be not again for years! Due to their irregular nature, they’re considered to be non-recurring costs.
Examples of non-recurring costs are:
The expenses that you pay regularly are recurring costs. They’re the ones you can anticipate incurring regardless of whether it’s on a monthly, quarterly, or annual basis.
Not all recurring costs are fixed expenses, either. Some of them can vary from one month to the next, like your utility, food, and entertainment bills. Typically, you have more control over them than your nonrecurring costs, too. This allows you to cap your spending on them, which reduces your burn rate and gives you more money to put towards your future!
Here are 10 common recurring expenses and how you can save money on each of them!
Over the last several years, streaming services like Netflix and Hulu have become big businesses. They’ve made it easy and affordable to have a constant flow of entertainment no matter where you are in the world!
Due to their accessibility and low cost, many people have over-subscribed to them. They have multiple services that provide an unlimited amount of entertainment which encourages them to spend all their time watching TV! Is this really the best use of their most precious non-renewable resource, time?
While having immediate access to entertainment is great, it still needs to be used within reason. Unfortunately for many people, it has become a distraction that prevents them from living life and pursuing their dreams!
To reduce this recurring expense, review all of your TV subscriptions and determine the amount of time you’re streaming each one. Don’t be surprised if you find one or two that you haven’t used in months either! Once you’ve gone through and reviewed your services, try weeding out or eliminating the ones that aren’t getting used regularly!
Keep in mind that nothing is preventing you from switching between streaming services every few months, either. You may find that this not only keeps your entertainment options fresh but that these companies are more willing to offer incentives to get you back as a customer, too!
Convenience food, whether it’s from UberEats or your favorite restaurant, always costs more than cooking it. On top of the added expense, it’s usually less healthy, too!
The most common excuse people give for not making their meals is that it’s time-consuming. But, in the same amount of time it takes to travel and endure the drive-through, you could have a meal that was healthier and less expensive!.
Meal prepping is one way you can save time and money on food. By spending a few hours cooking, you could have all your meals prepared for the entire week!
While I enjoy the social aspect of suffering with other people at the gym, I realize that it’s not for everyone. In addition to that, these recurring costs can get rather expensive depending on the facility and programs they offer.
One easy way to save money on your gym membership is to shop around for cheaper options. Many facilities, like Planet Fitness and LA Fitness, have low monthly rates and facilities all over the country. It’s also possible that your employer has negotiated low prices with a preferred gym already!
It doesn’t take a lot of room or equipment to exercise outside of a gym, either. By investing in yourself and buying some basic gear, you could eliminate gym fees altogether. On top of that, there are countless fitness and yoga classes that you can watch for free on YouTube!
Vehicles are another one of your significant recurring costs. Not only can the debt payments be a constant drain on your bank balance, but the cost of gas and insurance can be excessive!
Not to mention, there are also many different types of expenses associated with owning a vehicle. There’s maintenance, repairs, depreciation along with other hidden costs. Over a year, these can add up to a large amount of money and cost you thousands!
While getting rid of your vehicle is unlikely, using it less often can reduce the pressure on your monthly budget. By sucking up your pride and riding public transportation, you could save money on fuel, deterioration, and simultaneously be more environmentally friendly!
If you live in an urban area or city, then you may not need a vehicle at all. Instead, you could use a ride-sharing service, like Uber or Lyft. For longer trips, you could rent a car and pay a fraction of the cost compared to what it would if you owned it full time!
When your insurance bill is on automatic withdrawal, it’s easy to set and forget it. Unfortunately, this also gives companies the ability to increase your bill without you even noticing!
At each renewal, review your bill and determine whether its gone up. If it has, then shop around and you may be able to save hundreds of dollars on your insurance premiums. In addition, some companies can bundle your services, saving you 10% or more in the process!
Driving safely and following traffic laws also help you save on this recurring expense. If insurance companies find previous tickets and accidents on your record, then you’re a higher risk and will likely be paying more!
Do you have an unlimited plan? Most people do, yet their usage typically doesn’t justify the price they’re paying for it.
By downgrading your plan, you can save money on this monthly recurring cost. Instead of using data; connect to the internet via Wi-Fi whenever possible, close data consuming apps, and set up usage alerts. In doing this, you can limit your data consumption or buy more when your plan runs low which also prevents you from wasting money on overages!
As with all services, you can potentially save money on them by shopping their rates and switching providers. Some companies, like Mint Mobile and Tello , operate on the same network as the major ones, yet offer rates as low as $14 per month!
Being energy efficient around your home is not only good for the environment, but it’s also good for your wallet. By reviewing your current electricity consumption, you can find ways to reduce the amount you spend on them every month.
According to Direct Energy, about 17% of your home’s electricity gets used by the hot water heater alone. Most often, the temperature is set higher than what most people use which burns more energy than is necessary. By reducing the temperature setting, you’ll get to take hot showers and save money at the same time!
A programmable thermostat can also reduce your electric bill. With one, you’ll no longer heat or cool your home while you aren’t there to enjoy it. Instead, schedule your thermostat to turn on and make the temperature comfortable right before you arrive home!
Alcohol and cigarettes can not only ruin your health but your finances, too. If you’re reliant on either of them, then quitting has the potential to not only save your life, but cut out these recurring expenses altogether!
While giving up these and other bad habits isn’t easy, it can be life changing. By kicking them, you’ll likely be around to enjoy the nest egg and wealth that you’ve been working so hard to create!
I understand that it’s not always possible to completely eliminate bad habits. Still, cutting them back provides you with numerous health and financial benefits. So, if you can’t give them up entirely, at least try to limit the amount you consume.
It doesn’t matter whether you rent or own a home, housing is most people’s largest recurring cost. Because of this, it also gives you the biggest opportunity to save!
If you rent and pay on time, then chances are good that your landlord doesn’t want to lose you. It can be hard for residential property managers to find a good-paying resident which gives you negotiating power. You may not just reduce your rent, but also get upgrades done to your unit for free!
Homeowners can also reduce their housing expense by refinancing their mortgage. With today’s low rates, you could shave hundreds of dollars off your payment. Also, due to inflation, you’ll pay the loan back with dollars that are worth less than they are today!
Children can be expensive, especially when you need other people to take care of them. But by exploring your childcare options, you can potentially save hundreds per month and thousands per year!
Do you have friends that have kids? Maybe you can set up an arrangement where you take care of each other’s children once or twice per week.
Also, many organizations offer educational and low-cost childcare. Consider the YMCA, local churches, and after-school activities that can keep your child engaged and growing, all while helping you to save money!
As you can see, there are countless ways to reduce your recurring costs. But, you won’t save any money on them unless you review your expenses and find out the amount you’re spending on them!
By discovering 10 different ways to save $10 per month on your recurring expenses, you’d have an extra $1,200 per year. If you were to invest it and let it compound, then think how much closer you’d be to reaching your financial goals!
Which recurring costs are wreaking havoc on your finances? Comment below.
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