With everything that’s gone on in the past year, it shouldn’t be a surprise if your finances have derailed. In one way or another, the pandemic has served as a disruptor for many — especially when it comes to money. However, it’s what you do now, in 2021, that’s going to help you get your finances back on track.
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By cutting top expenses from your budget, you can free up cash that can be put to much better use, like paying off debt, padding an emergency fund or making an investment. From curbing your morning coffee runs to canceling unneeded subscriptions, here’s how to get your finances back on track so you can meet your financial goals.
Last updated: Jan. 26, 2021
The average American pays just over $100 monthly for cable, according to USA Today. So if you effectively cut the cord, you could save at least $1,200 per year. As an alternative, you can sign up for a streaming service. As long as you have an internet connection and a supported device, like a smart TV, you can stream your favorite shows and channels. For example, Netflix streaming plans are $8.99-$17.99 per month. Or you can choose a more robust service, like Philo, which offers 63 live and on-demand channels and unlimited DVR for $20 monthly — and no contract.
If you sign up for a streaming plan that’s $20 a month, you’re still saving $960 per year by ditching cable. You could take the money you save and use it to build up your emergency savings fund.
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From branded bottled water to designer coffee drinks, your daily beverage habit can really add up. A six-pack of Fiji water per week costs $8.39 at Albertson’s, while six cups of coffee from Starbucks per week, at $2.75 each, will cost you an average of $16.50. In a month, that’s around $34-$66 dollars. And if you buy both branded bottled water and Starbucks, you’ll spend around $100 per month just for convenience.
Try making your own coffee each morning and refilling your water bottle at home with filtered water from your refrigerator or sink attachment. If you do both, you’ll be able to save up to $1,200 annually on convenience beverages that you can put toward padding your emergency fund or paying off your credit card debt.
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A weekly maid service costs $75 to $200 per visit, according to data from HomeAdvisor, which can add up to $300 to $800 per month or $3,600 to $9,600 per year. That’s a lot of money to have someone clean your house every week for a year.
If you have a family and your schedule doesn’t allow for weekly housecleanings, try reducing the maid service to every other week, which will slash your monthly and yearly costs in half — between $150 to $400 per month or $1,800 to $4,800 a year. If you have your debts paid off and your emergency fund is well-padded, consider investing the money you save.
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Don’t panic. You don’t have to completely eliminate takeout from your budget, but if you rely on this convenience heavily, you could save big by cutting back. According to the 2020 State of the Restaurant Industry Report from Upserve, 60% of consumers order delivery or takeout once per week and 31% use these services at least twice a week. Plus, 34% of consumers spend at least $50 per order.
If you order takeout every week and spend $50, that’s $200 per month or $2,400 per year. If you can’t completely nix your takeout habit, cut it in half and order every other week, which will effectively save you $100 per month or $1,200 per year. Take that $100 per month and put it toward a debt strategy that will help you pay off your credit cards faster.
Find Out: See How Much Americans Are Spending on Takeout Amid the Pandemic
Subscriptions You Don’t Use or Value
While you can use streaming services to help you cut the cord on cable, how many do you really need? The average American watches 3.4 services at a cost of $8.53 each, according to a study from Vindicia. The average cost of a gym membership is $30-$60 per month, according to Verywell Fit. The average music streaming subscription is around $10 a month, according to Consumer Reports.
You could save between $100-$720 per year for each unneeded or unwanted subscription you cancel. To realize the savings, transfer the amount you save each month directly to your emergency savings or a high-yield savings account.
This article originally appeared on GOBankingRates.com: Top Expenses To Cut Now To Get Your Finances Back on Track
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