When you think about what you want in life, what are the answers? Do you want financial stability? Comfort? When you soul search, the answer to these questions is likely a resounding yes. It is entirely possible to have these things for yourself and your family, and it starts by reframing the way you think about money and making adjustments to your financial habits so that you can spend where it’s needed and save where it’s not.

Saving Money Without Sacrifice

If your budget is stretched to capacity, your first priority is to change the way you spend.

Your biggest monthly expense is likely your mortgage. The good news here is that now is a great time to pay less for your house without losing equity. You can do this by refinancing. 

Let’s say that you have an FHA loan with a 5% interest rate and PMI. On a $200,000 home that you put 3 percent down on, a 30-year mortgage payment would be around $1,400 per month. By refinancing from an FHA to conventional loan (assuming a $180,000 balance and that you put enough down to avoid PMI), a new 15-year conventional mortgage with a 3 percent interest rate comes out to around $1,200 a month. You’re not only saving $200 each month but potentially tens of thousands of dollars in interest. 

Sit down, do the math, and decide if this is a path for you. Don’t forget to factor in closing costs and other potential expenses. And be sure to compare rates and lenders before you take the plunge to ensure you get the best loan for your situation.

Another major recurrent payment is your vehicle. Chances are, you’re paying hundreds a month for a car. That is a huge chunk of change that might be better off in savings. Unless your vehicle is necessary for work, such as if you are an Uber driver or routinely transport important business clients, you can likely downgrade your vehicle without noticing any measurable difference in the quality of the time you spend on the road. Even if you owe money on your vehicle, you can sell it and finance something less expensive or pay cash for an older car.

Incidental Expenses

A vehicle and a home are necessary, even if you do have to pay for them each month. But there are many things that are not. Take some time looking at how much you spend on things like cable television, dining out, and utilities. You can save a great deal by altering your habits in these and other areas.

Let’s look at the average cable bill, which includes internet and television. If you choose a package with all of the bells, whistles, and premium content, you may find yourself writing at least a $200 check on the first of each month. Instead, Debt.org recommends using cheaper entertainment and communication options and shopping around for your services. Switching to Netflix and Disney+, for example, will cost you less than $20 per month, and there are many apps you can download on a streaming media device that offer access to free television and movies.

Don’t Plan to Spend

There are some things you have to spend money on. But there are others that are completely optional. Until you get a grip on your finances, plan to avoid excess expenditures. This includes forgoing things like adopting a new dog, clothes shopping, and going on vacation. Alternative yet equally satisfying options for these include volunteering at your local animal shelter, hosting a clothing swap with your neighbors, and visiting friends and family. 

When you do have to spend, do your research to find items that give you the best value. Sometimes spending a little more on a product that is made to last longer will save you money. For advice and reviews on home-related products check out HomeLifeDaily. And of course, Wirecutter is another great resource, especially for tech and electronics.

The point here is to look for opportunities to keep your money where it belongs, which is in your bank account. Doing so can help you plant the seeds for financial independence down the road. And it does not matter how big or how small your actions; every little bit helps, and every dollar you save has an opportunity to grow.

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