How to Cut Unnecessary Expenses from Your Budget

Do you pay close attention to your spending habits?  Some people may think that they are living smartly by cutting down expenses here and there.  Are you overlooking aspects where you can save money?  Take a look at the following pointers and you might be able to cut even more from your monthly budget:

Lower or cut-out PMI

PMI or private mortgage insurance is the fee imposed by banks to minimize the risks of default. Check your mortgage and see how much PMI you are being charged and request your bank or lender to lower the cost of your PMI.  If you are timely in submitting your monthly loan payments, your lender is more likely to grant your request.

Increase your car insurance deductible

The deductible is the amount you agree to pay out of your own pockets before making claims from your car insurance company. It’s a good idea to save cash specifically for car emergency expenses so you don’t have to depend entirely on your car insurance plan.  By raising the amount of your deductible, you can significantly cut down the cost of your monthly insurance payment.

Do not buy unnecessary warranties

Some merchants will charge a certain amount for warranty services.  While a warranty can prove to be useful for expensive items, paying the extra cost can prove to be unnecessary for small purchases.  Better yet, try to negotiate your way to getting the warranty for free so you don’t need to pay the extra cost.

Finance charges

Consumers need to be aware of the specific charges they might incur and how these can be eliminated.  For instance, you can save a great deal of cash if you can avoid late fees and over-the-limit charges.  Instead of paying the penalty fees, get to know the rules of your banker and do your best to steer clear of these charges. {Also read Save Your Finances by Avoiding Late Fees}

Credit Card Fees

It’s best to look for a credit card with minimal fees and reasonable interest rate.  Some credit cards offer incredibly low introductory rate but with expensive fees such as annual fee, late fee, over-the-limit fee, cash advance fee, etc.  While the low rate is enticing, keep in mind that it will not last for a long time.  Some cards offer an introductory rate for only 6 months or less.  Afterwards, you might get stuck with a credit card that has high rate and expensive maintenance costs.  Thus, before signing up for credit card, check the interest rate as well as the other fees associated with it.

Do what you can to avoid paying the extra charges.  For example, by paying your monthly credit card balance in full and on time, you don’t have to worry about paying the interest rate or penalties.  Furthermore, cash advances are not covered by the grace period so you automatically incur the interest rate charge plus the transaction fee the moment you take out the cash from the ATM.  As much as possible, cardholders are advised not to use the cash advance feature.

 

Elizabeth Roberts

Elizabeth Roberts

Liz Roberts and her team are continuously providing information to people who are ready to repair their credit and improve their credit score. Also NewHorizon.org team strives to empower the homebased and small business owners by bringing information that can help them to manage and grow their businesses. Let our 24+ years of business finance experience help you to get the financing you need! CONTACT US if need financing for your business.

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NewHorizon.org is an independent, advertising supported website. The owner of the site may be compensated in exchange for featured placement of certain sponsored products and services, or your clicking on links posted on this website. NewHorizon.org has not reviewed all available credit card offers in the marketplace.

Privacy Policy Terms of Use

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