Shrink Your Monthly Bills with These Tips

It's always a good time to review what you are spending your hard-earned money on each month, and to optimize your finances. Trimming down your expenses may seem daunting, but it can help you on your journey to financial freedom.

Start By Auditing Your Bills

It is important to know where your money is going, so gather all your bills and receipts, or review your online banking statements, to analyze your monthly spending. This will help point out any unnecessary expenses, like unused services or excess charges. From here, you can choose which items you would like to lower your spending on or eliminate altogether.

Reduce Rent

It’s likely that your highest expense each month is rent, so here are a couple tips on how to lower this cost. First, sign your lease in the fall or winter. There is more demand for rental units during the warmer seasons, so landlords may charge higher prices. Signing in the later months of the year can save you more down the line.

If you find yourself with extra apartment space, consider downsizing. This will allow you to save hundreds of dollars each month. If you want to keep your current place, search for a roommate. While you will lose part of the space, they can cover around half of the expenses.

Reduce Utility Bills

The cost for utilities – like internet, cable, phone and electricity – can all usually be reduced. First, shop around for bundles on cable and internet. You can also call your current service provider and try to negotiate lower rates. If you have any unused streaming subscriptions, consider lowering your plan to a cheaper one or sharing the cost with family. Music platforms like Spotify and Apple Music offer family plans at a reduced rate. As well, video services like Paramount+, Prime Video, Crave and Apple TV+ still allow for password sharing, meaning your family can share accounts and split the costs.

There are many ways to reduce your energy bill, including turning off lights when you are not in the room, investing in LED lights, and unplugging any gadgets that are not in use. To make these steps easier, purchase smart plugs and power bars. These will allow you to control electronics from your phone which makes managing energy consumption convenient.

Lastly, make sure to turn down your thermostat. For each degree of temperature you lower during the winter, you can save around 1-2% on your bill.

Reduce Water Bill

There are little changes that you can make to lower your water bill each month. Start by shortening the time you spend in the shower and turning off the tap when not actively using it. Both these tasks can waste at least 5 litres of water per use. As well, dripping taps and leaks can waste around 200 litres per day, so it is important to fix these quickly to conserve water and reduce expenses.

Find Your Budgeting System

There are many options for systems that you can put into place to keep track of your monthly expenses. The first option is a cash envelope system, also known as ‘cash stuffing’. This forces you to physically portion out your spendings for the month into categories by titling different envelopes with categories – groceries, entertainment, etc. – and putting in the money you expect to spend on those things.

If you prefer to do this digitally, there are many budgeting apps to choose from, including YNAB, PocketSmith and Goodbudget. For an easier and free method, organize these categories into an Excel/Google spreadsheet or a physical ledger.

Overall, it is best to adhere to the 50-30-20 rule. This recommendation splits up your monthly income by priority. 50% of it goes towards your needs (rent, bills, groceries, etc.), 30% goes to your wants (subscription plans, vacations, take-out meals, etc.) and 20% is allotted to savings (retirement, investments, etc.) or paying off pre-existing debts.