We could all stand to scrutinize our household budget — no matter how big or small — and a new year means a chance to handle our money a little better.
Ahead, we have tips on how to manage your rental home costs in 2014.
Keeping up with expenses sounds simple, but it’s an item that tops most lists on money management. After all, if you don’t follow the relationship between what goes out against your income, there will be cash-flow trouble eventually. Start by saving and recording a month’s worth of receipts for utilities, groceries, memberships, car (gas and maintenance), debt repayment, medical costs and miscellaneous items. Check this calculator to help you visualize these and other expense items to carefully keep up with.
Once you have your monthly expense totals, subtract these from your income. The resulting picture will give you an instant recommendation on what kind of diet you might need to place your household expenditures on.
Launch a spending investigation
Most people who do this exercise can see almost instantly how much they are overspending, but deciding which categories can stand the most trimming sometimes takes more research. Get ready to put your deerstalker on and go all Holmes on your budget. It’s time to find ways to trim in every category of your budget, like the following.
What you eat and how you eat it can be an expansive category in any budget. Are you eating out a lot or shopping at gourmet markets? Reducing your frequency of either activity can definitely save your rental home costs. And while cooking at home almost always saves money, if you’re in the habit of loading up at expensive health food stores, this may not be the case. Consider buying organic items (that really need to be organic) at a regular grocery store with less expensive prices, overall. Look to see how much you can reduce your monthly food bill to get yourself back in the black.
Do you have cable, satellite, Netflix, Amazon Prime, Hulu Plus or any number of subscription services to access your favorite television and movies? If so, check the prices on all your options and see what you can do to reduce your costs. Maybe losing cable and picking up another service that lets you choose what you pay for might lower your home costs.
If going out to see movies and music is a big part of your socializing, consider getting more particular about how you spend your free time. Having friends over to watch a movie or skipping some bands and performances that come to town in favor of the ones you really can’t miss will help trim your entertainment budget significantly.
Ironically, though this category almost always involves non-essentials, it can feel like the hardest one to cut back on, especially if you enjoy collecting something, love clothing and fashion, or are simply addicted to the rush of buying. In fact, it’s often when money is especially tight and people feel that they’ve scrimped and saved all they can that shopping can be especially tempting. It’s time to give yourself the tough talk here. Acquiring is an emotional habit. Take inventory of your rental home, especially your wardrobe, books/movies and special interest equipment. Do you really need more? And if there are real needs there, have you tried to find your faves secondhand?
Make a realistic budget
Now that you’ve faced the hard reality of expenses over income and considered ways to trim costs in all categories, it’s time to formulate a rental home budget you can stick with. If there doesn’t appear to be a way to do it without dropping something you have always considered essential, like your cable or satellite service, get creative. You’d be surprised how little you’ll miss some former “must-haves” when they’re gone.
Be strict with yourself
The only way to stay on track with your rental home expenses is to stay within your budget. Before long you will memorize how much you have to spend in each category, while also keeping track of how your tally is going for the month. And if you decide to reward yourself with a luxury, make it a small one — and don’t create a habit of indulgence.
Managing rental home costs is a task in which we should all consciously participate. As a renter, you may already have a break on expenses like home and yard maintenance. Count yourself lucky and then count your pennies closely so that 2014 can be your most financially sound year yet!