According to the Bureau of Labor Statistics, middle-class people (defined as Americans who earn $50,000 – $75,000 annually) spend 26.7 percent of their income on housing and another 8.2 percent of their income on utilities such as electricity, water and home gas. (This doesn’t include gasoline for vehicles.)
That means middle-class people are spending 35 percent of their money on their buying and maintaining their home. In my view, that’s the spot you should first target if you’re looking for ways to save.
Here are a few tips that can help you save money on home utilities, your home mortgage, and other housing-related bills.
#1: Cover up drafts. Many people don’t realize how much money goes out the nooks and crannies of their home. Heating and cooling costs can be drastically reduced by sealing up your home and keep “inside air in” and “outside air out.”
#2: Consider refinancing your mortgage.If you qualify, consider refinancing to a fixed-rate mortgage.
Interest rates on home financing have risen slightly, as compared to 2012. The average rate on a 30-year mortgage these days is roughly 4.25 percent, according to Bankrate.com. That’s an increase over the 3.25 percent rates that were being offered last year.
But interest rates are still at historic lows — so if you haven’t refinanced yet, take advantage of this opportunity before rates rise further. As a general rule of thumb, a refinance is worth the closing costs if you can knock off one percent or more.
#3 Group monthly bills. Do you use cable television, need Internet access, and have a cell phone? Why not consider purchasing all these services from one provider? Many local cable networks will offer you a considerable discount if you purchase all of your technical services through them. (Better yet, cancel your cable entirely and entertain yourself by watching free or cheap television shows and movies on Hulu.com, Netflix, Redbox and Amazon Prime, instead.)
#4: Insulate your pipes. You can easily cut your winter heating bills by purchasing insulation to put around the water pipes. By doing so, you’ll prevent heat from escaping through your pipes. And don’t worry — although some people might balk at the idea of putting porous foam that close to water, you don’t need to worry. Assuming your pipes aren’t leaking, the insulation will stay dry.
#5: Shop around for insurance. Between car and homeowner or rental insurance, your monthly bill can get quite high. Many insurers offer a discount if you buy both car and home insurance through them. Ask your insurance agent about “bundled” discounts.
#6:Get clean. You can actually lower your electricity bills by deep-cleaning your home. How? You see, many major appliances — like the dryer and refrigerator — have vents or filters that can get blocked by dirt or lint over time.The more dirt is in the way, the harder your appliances have to work. This increases your electricity bill. Spend a weekend afternoon deep-cleaning your vents and filters. It might cause a drop in your power bill!
Kennedi blogs about budgeting and saving at Face & Fitness. Her latest post is How to Save Money … Fast!
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.