How To Become A Capsule-Budgeteer And Streamline Your Monthly Costs

Ever heard of capsule wardrobes? It’s when you have a small wardrobe with mainly essential items of clothing in it: jeans, a skirt, some tee-shirts, a sweater, a winter coat, etc. It’s the basics, but each item has a purpose and gets used frequently. Clothing can be combined in different ways for different occasions, and when you’re choosing your clothes, you keep this principle in mind; that way, you shop smart, reduce costs, waste, and contribute to the planet by reducing your carbon footprint, and overseas exploitation.

It’s not exactly the same as reducing your household budget, but the same principle can apply. Most people tend to get into a routine with their bills and payments, if everything’s working well enough, there’s no great need to change anything. On top of that, it takes time and effort to phone up energy companies or insurance companies to try and get a better price. But if you take some time to consider the overall benefits of streamlining your monthly budget you could find that you not only save considerable sums of money each month, that is in your pocket instead if someone else’s, you will also contribute to the environment and feel a certain satisfaction that everything is under control.

In this blog post we take a look at some excellent ways to save money on your energy bills, your mortgage and what to look out for when buying a new home. Everyone needs broadband internet these days but do you have the best deal for you. Finally we take a look at some of the best money saving tips in 2020.

Energy

Its estimates that average households lose out on over a thousand dollars a year because of an inefficient energy plan. That’s money that could be used for a short city break, or some home improvement. Instead, it goes to an energy company that is in the business of overcharging people. Seriously, your loyalty is not rewarded the longer you are with a company, in fact it’s the opposite.

The energy market is very competitive, and it’s easier than ever to change suppliers. Because of this energy companies offer brilliant deals to new customers – a bit like telephone and broadband companies! The idea is to win customers in a closed-market economy. Unfortunately, loyal customers are not rewarded in this model, the shortfall has to be passed onto someone, and it happens to be you. That is someone who has been with the same energy company for a while.

What this means is that it’s in your interests to change suppliers, and more regularly. Furthermore, renewable energy bundles are becoming more readily available meaning that you can reduce your bills and contribute to the environment. Another excellent way to do this is to assess the efficiency of your home. A great deal of heat and, therefore, money is lost every year through windows, doors, walls, and roofs. Changing your windows and doors or upgrading your wall insulation might seem like a big expense at first, but it will pay off in the long run.

Mortgage

A mortgage is one of the most significant monthly financial commitments we make in our lifetimes, but just because we have that expense to pay every month doesn’t mean that it’s fixed and can’t be reduced with some savvy budgeting know-how.

Whether you are taking out a mortgage for the first time and need to calculate your mortgage payments or you’re renewing your mortgage, it’s a good idea to shop around for the best interest rate. Most lenders will allow you to benefit from the current rate on a new loan. Before you go shopping, check the lenders in the marketplace for the best prices. Take a note of the rates and make sure to negotiate with lenders. Consider s mortgage broker too to get the best deal.

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Another great way to save on your mortgage is to

amortize your mortgage over a shorter period. This means that the faster you pay down your mortgage, the less interest you pay on the loan overall, saving you a lot of money. For example, if you were able to repay a $200,000 mortgage in 20 years instead of 25 years, you would save around $25,250 in interest, assuming an interest rate of 4%. It might seem easier to have a smaller monthly payment but over the long term you are losing out on a substantial sum of money that could fund an annual vacation for the rest of your life.

You could also consider paying into your mortgage annually, perhaps with the money you save on your energy bills. These lump-sum payments will save you even more dollars in the long term. Being shrewd and savvy with your household bills can also be very satisfying.

Internet

When it comes to household internet it’s important to get it right, but getting it right can be a bit of a balancing act. First of all you need to do a sort of household audit. Some households are paying too much for Internet they aren’t using, others need faster internet, for gaming say, at the lowest possible cost. You can check your usage by contacting your provider and getting a rundown of the data. This data can then be used in the marketplace when shopping around for the most efficient deal.

If you have low internet usage, or even high usage but you aren’t gaming, streaming, or downloading, you could look into one of the government subsidy schemes. These are generally for individuals and households that earn below $35,000 per year. Even before ISPs became a utility, the government was partnering with providers to bring the internet into more homes. On one of these subsidy schemes you could get your internet for as little as $9.95 per month.

You probably didn’t know this but ISPs charge you between $5 and $10 per month for the rental of the router you are using. Crazy huh! The thing is if you buy your own router, even one second hand from say ebay you won’t have to incur this monthly charge. The catch is that buying your own router means it will have to be installed by you and will have to be compatible with your ISP. A little bit more leg work on your part, but when you consider the rental price of routers is on the increase and you could save between $60 and $200 per year – it might be worth the effort.

Insurance

For those who drive car insurance can be a hefty monthly cost. Especially when you consider all of the other expenses that go with driving. There’s road tax, fuel costs, repairs and maintenance, as well as the cost of the car itself. It pays then to shop around for the best price on your insurance as this is one factor that is within your control – to an extent.

There are some good ways to reduce your annual insurance quote. Firstly, limit your mileage. The fewer miles you drive each year, the lower risk you will be to insurers – your quote will, therefore, be more economical. Don’t however fudge the numbers, doing so could invalidate your insurance policy. This could get you into legal and financial hot water when you need your insurance the most.

As with most direct debits you will pay more overall for a cut-down monthly price. If possible you should pay for your car insurance up front and save money every year. Other options include paying the insurance on a 0% credit card just make sure you meet the card’s minimum payments and pay off the balance before the interest begins.

Saving

Becoming a capsule-budgeteer is not only about being shrewd with your bills and direct debits, it’s also about general savings and being smart with your income. We are told that to be secure we need to have savings of between three and six months of monthly income. That seems like an overwhelming amount to most people with modest incomes. So where is the best place to start? The answer is, start small. Target $500 at first and don’t worry if it takes a while to build up, the important thing is to get into the habit of putting the money aside and ring fencing it.

Establish a monthly household budget. This might seem like common sense but it’s surprising how many people don’t have their monthly expenses under control. It can be difficult, especially with so many direct debits and cash withdrawals happening. At the start of one month commit to making it a test month. Get a receipt for everything you purchase and mark down the date and amount for every direct debit. Organize this data into categories and make decisions on what to prioritise, and what you don’t need. You can also see where you are spending more than you need too – just remember to be realistic.

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