Black Americans have been struggling with debt. The average debt-to-asset ratio is 50 times higher for African-Americans than it is for white Americans, according to the Employee Benefit Research Institute.
Here are five ways to slash your bills.
1. Got Bills? Eliminate Them
“The first tip I’d give to save money on bills is a simple yet effective one. Reduce them,” millennial business and finance coach Carlos Ariel Then of Mr Then Consulting LLC, tells Finurah.
Take a look at your monthly expenses and see what goods and services you can eliminate.
“Go through all of your subscriptions and get rid of the ones that you rarely use,” offers Jake Hill, CEO of personal finance publication DebtHammer. “Most of us have subscriptions to most, if not all, or the streaming platforms, for example, but only use 1-3 of them regularly. Once you identify which ones you consistently use and get value out of, unsubscribe from the rest, and you will eliminate several monthly bills.”
You can even slash your grocery bill easily and quickly — and over the course of the year can save you hundreds. “When grocery shopping, opt for the cheapest versions of the items you are buying. While the name-brand type of cereal you like may normally cost around $3.50, the off-brand version of the same thing might be a dollar or two cheaper. This is the kind of price substitution that might not seem like a big deal at the time, but ends up saving you a ton of money over the course of a year,” notes Hill.
2. Make Budgeting a Lifestyle
Make a monthly budget and stick with it.
“It’s not just something that people advise you; making your own monthly budget should be part of your lifestyle. It’s learning how to stay disciplined in terms of spending that you should master if you want to be coined a good payer or someone who settles their bills on or ahead of time,” advises Dominic Harper, founder of Debt Bombshell.
She adds, “Always keep in mind that money will never be enough, and millionaires going bankrupt is the best proof of that predicament. Stick to the list, and always prioritize Important bills first.”
Organize your budget in a way that it is easy to follow.
“Keep a 50-30-20 Financial Budgeting Rule. 50% of your income should be set aside for your needs, bills, and other physiological obligations, 30% be put for your wants and extra buys, and 20% for investment and insurance. This may still depend on how much you are earning, but if you practice living within your means, this budgeting rule will perfectly fit you,” suggests Harper to Finurah.
3. Make Money From Your Debt
Then offers a controversial way to pay your bills monthly. “Pay your bills with credit cards that offer cash back. That means using the money you would have had in your bank account to pay bills to instead consolidate that payment onto a credit card that earns cash back,” he says. Then you pay off the credit card with the money you would have sent straight to the bills, and you are still getting cash back.
You can also look for rewards in other ways. “There are reward points are everywhere,” declares financial consultant Hunter C. Guthrie, Coho Financial Group.
“Companies want you to be loyal to them, and they will pay for it. Make sure you are taking advantage of any and all the reward points that you can and in particular, focus just on one or two services or companies for each category of shopping. There are reward points for gas stations, and through apps on your phone, Amazon will help you save on shipping, Costco memberships offer points back … just pay it off every month,” says Guthrie.
4. Get Those Rates Lowered
“Many times our auto and home insurance rates will be more competitive with a new company. It is very smart to at least check the prices of the competitors every two-three years,” says Guthrie. “Same goes for your phone, Internet, TV, and gym fees.”
5. Don’t Status Buy
It’s tempting to want to keep up with the Joneses, but doing so can wreak havoc on your finances.
“Never buy anything, just for social status,” says Harper. “Apple iPhone isn’t the best phone in the market, nor is a Mac the best laptop, but most people get carried away with the thought that we all have to live according to our corporate titles and follow a certain social status, leading to spending on overpriced items.”
Doing so is a bad financial move. “This isn’t ideal, especially when you know how much money you can save should you be more mindful and strategic in choosing what to purchase. We should not try to fit a standard raised by society, and spending on items so that you can brag about it won’t give you that sense of fulfillment,” says Harper.