How to Save $500 on a Monthly Budget

If you're tired of living paycheck to paycheck and never having enough money to cover your costs then it's time to start budgeting. There are many ways that consumers can cut back and increase cash flow without giving up everything they have. If you're willing to stick with a budget and cut back on some nonessential items, you can easily save $500 a month.

Difficulty: Easy

Instructions

1. Check into the interest rate on your home mortgage. If a current rate is 1 percent lower then your existing rate, it's wise to refinance your mortgage. A 1 percent drop in interest rate can save you approximately $100 a month.

2. Take your lunch to work instead of eating out. The cost of buying lunch every day quickly adds up. Bring your coffee to work in the morning instead of paying $4 on the way.

3. Make a list when you go grocery shopping and stick with it. Generic food tastes just as good as name brand items and they're a fraction of the cost. Cut coupons and shop sales to lower the food bill.

4. Cut back on items that you don't need in the house. Reduce your payments by cutting back on cable, losing long distance service and cutting your Internet connection.

5. Create a monthly budget and be sure to stay with it. Write down every dollar that comes in and every dollar that goes out. Seeing exactly what you spend your money on can make you realize how crazy your spending habits are. This is an eye-opener that can cause you to keep your spending down.

Resources

• Dave Ramsey's approach to living on a budget and more.

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