Updated on 12.27.16

Cut These Five Bills to Save $500 Next Month

No matter the time of year, saving money is almost always a good thing. But, when the holidays hit, your savings goals might feel even more urgent than usual.

Maybe you traveled to see family over Christmas and forked over a pretty penny for airfare, hotel stays, or a rental car. Perhaps you spent more than you planned on holiday gifts. Maybe you even spent so much that – gasp – you can’t afford to pay your holiday credit card bills.

Whatever the reason, now is as good a time as any to take a sharp swipe at your expenses and get back in the swing of things. And if you hack at your budget enough, you could even save up to $500 next month.

Want to know how? Consider cutting any combination of these expenses to reduce your spending and get your finances out of the red:

#1: Energy Bills

Your energy bills might make up a huge portion of your budget, depending on where you live. If snow is falling and air is cold, for example, your gas or electric bill might be through the roof.

Fortunately, this is one area where you could start saving right away. Some ways to reduce your energy usage immediately include:

  • Turn down your thermostat. Even a few degrees can make a huge difference in your energy bills when it’s cold outside. And if you have a few bucks to invest upfront (or some holiday gift cards to burn), you could also consider buying and installing a programmable thermostat that will turn down the temperature automatically when you’re not home or tucked under the covers at night.
  • Unplug unused electronics or use smart power strips. Unused electronics siphon “phantom” energy that adds to your energy bills without providing any value in return. To keep unused electronics from costing you, unplug them when they’re not in use. You can also install power strips to keep related items turned off when you’re not home. For example, you can keep your television, DVD player, and cable box on one strip that is easily turned off when you’re not watching TV.
  • Turn down your water heater. You don’t have to take cold showers to save on energy bills. But hot water heaters account for about 17% of a home’s energy usage — more than all your appliances combined — and most of the time that water’s just sitting there in the tank. To dial back your usage, try turning down your water heater incrementally; when you finally notice a difference in the shower, turn it back up just a tad.
  • Seal your home. The U.S. Department of Energy offers a great guide on air sealing your home. They suggest looking for leaks, then adding weatherstripping, caulking, and insulation to keep warm air from escaping your home.

How much will you save with these changes? As the U.S. Department of Energy notes, your savings will vary depending on myriad factors such as where you live and how efficient your home is. However, they note you could easily save $83 to $166 per year just by sealing leaks, $100 per year by using power strips, $12 to $60 per year by turning down the water heater, and up to $83 per year by turning your thermostat down for eight hours each day.

By making each of these changes right away, you could presumably save at least $30 next month and beyond.

#2: Food Spending

We all know we could spend less on food. So, why don’t we? At the end of the day, it all boils down to our habits – and mostly our bad ones.

Rather than cook at home after a long day at work, it’s far too tempting to pick up take-out on the way home. And if you’re not in the mood, a ring to any random pizza parlor or Jimmy John’s will result in delicious food delivered right to your front door. It’s all too easy, but those extra “splurges” sure do add up.

Fortunately, it’s easy to shave costs if your food spending is out of control. Here are your first steps to save at least a few hundred bucks next month:

  • Stay away from restaurants. Seriously, don’t go. If you can avoid dining out for a month, you’ll save money by default.
  • Pack your own lunch to work. It’s easy to go out to lunch and spend $10 to $15 per day. Stop. Visit the grocery store instead to stock up on ingredients for easy lunches you can bring to work.
  • Make cheap and easy meals at home. Cooking every night may not be fun, but you’ll save a lot of money if you learn to make some meals using simple ingredients at home.

If you normally spent $50 per meal dining out once per week, you could save $200 next month by staying home. If you normally eat out for lunch and spend $10 per day, you could pocket $50 per week or $200 per month by bringing lunch instead.

The best part about this component of your budget is that you can get started and see results right away. And with some combination of these moves, you should easily be able to save $200 next month.

#3: Cable TV

The average cable television bill hit $103 per month earlier this year, with 82% of households subscribing to some form of pay-for-television service.

The good news is, there are plenty of ways to save money on cable without ditching your favorite TV shows altogether. Some options include:

  • Downgrade your plan: If you’re paying for premium channels or add-on packages, consider which ones you truly watch and enjoy. Do you need a DVR on every TV? Are you really getting your money’s worth from the extra channels you’re paying for, or are they just nice to have?
  • Invest in a digital antenna. A digital antenna might run you $25 to $50 upfront, but it could help you drop your cable bill forever. The major TV networks (such as NBC, ABC, CBS, FOX, and PBS) still broadcast their signals over the air, for free, just like they always did — except now they do it digitally, in high definition. With digital bunny ears, you can watch a lot of hit TV shows, local news, and live sports (including football), in HD, completely free.
  • Subscribe to Netflix or Hulu. To complement your free over-the-air TV, you can sign up for Netflix or Hulu for less than $10 a month each. With Netflix, you’ll have access to hundreds of children’s and adult shows, including complete past seasons of popular TV series, documentaries, and thousands of movies. With Hulu Plus, you can watch any number of popular TV series. To watch these services directly on your TV instead of your laptop, you have plenty of options, ranging from a $5 HDMI cable to more user-friendly plug-in devices (like Google’s Chromecast or the Amazon Fire TV Stick) to complete set-top boxes (such as the Roku Box or Apple TV).
  • Use Your Amazon Prime Membership: If you already subscribe to Amazon Prime for the free two-day shipping (now $99 per year, or about $8 a month), you also get access to an entire library of movies and television shows you can stream directly to your TV.

With any of these options – or a combination of them — you could easily save $50 or more on your cable bill next month. At my house, we’ve got Hulu and Netflix for less than $20 per month. While even this is probably more TV than we need, it still helps us save $80 per month off the average cable bill.

Keep in mind, however, that streaming options require home internet service. If you already have internet service you’re happy with, these options might help you save. But if you have to add internet service to cut your cable TV, the savings could be negligible. Either way, make sure to compare options, plans, and potential savings before you pull the trigger.

#4: Insurance

Automobile and homeowners insurance should be taken seriously, but that doesn’t mean you can’t save with some savvy moves. We’ve all seen that adorable lizard saying you can save up to 15% on car insurance just by shopping around, but this is true no matter which company you choose and what type of insurance you’re looking for. Consider these tips to save on insurance right away:

  • Shop around for the best quote. The best way to save on homeowners and auto insurance is to shop around for a better deal. Just make sure you’re comparing “apples to apples” by seeking out similar – or better – coverage than you have already.
  • Raise your deductible. If you like your policy already and don’t want to change, you may be able to reduce your annual or monthly bill by raising your deductible on either your homeowners or auto insurance policy. The best way to find out is to call your agent and ask.

#5: Credit Card Interest

Whether you were drowning in debt already or picked up new bills over the holidays, the monthly interest payments credit cards will charge you tend to be unkind to your wallet. With average credit card interest rates hovering around 15%, it’s not hard to imagine why!

The obvious long-term solution to credit card debt is to pay it off. Unfortunately, this strategy can take time and money you may not have right now.

If credit card interest is hampering your savings efforts, consider these options:

  • Call your card issuer to ask for an interest rate reduction. If you have a solid history of repayment, your card issuer might reduce your interest rate if you call and ask. The worst they can say is “no.”
  • Consider a balance transfer. If your cards carry unruly interest rates, a balance transfer credit card can help. By transferring your current balances to a new card, you could secure 0% APR for anywhere from 12 to 21 months. This could cut your monthly credit card interest payments down to zero overnight and help you pay down debt faster.

The Bottom Line

Whether your goal is to get out of debt this year or to save up a down payment for a house, saving money should be your top priority. With a few sacrifices, it may be possible to free up an extra $500 per month or more — and not just next month, but every month going forward.

If you’re serious about getting out of debt this year or simply want to reduce your monthly spending to save more, these strategies will help you get started. So, hack away, my friends… and keep hacking. Before you know it, you’ll have a lot less money going out the door – and a lot more staying in your bank account.

Holly Johnson is an award-winning personal finance writer and the author of Zero Down Your Debt. Johnson shares her obsession with frugality, budgeting, and travel at ClubThrifty.com.

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Do you plan to cut your spending next month? Which expenses do you plan to cut first?

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