Budgeting 101: How to Lower Your Fixed Monthly Expenses

By Carmen Chan

Are you tired of feeling like your fixed monthly expenses are eating up all your income? You’re not alone. Many Canadians are struggling to make ends meet, with credit card debt and loan payments piling up. In this article, we’ll explore four key strategies to help you lower your fixed monthly expenses and pay down debt.

The State of Canadian Finances

According to a recent report by credit monitoring bureau Equifax, the average Canadian is carrying $21,296 of debt. Delinquency rates on loans have increased by 28.93% year-over-year, and mortgage delinquency rates have soared by 135.2% in Ontario and 62.2% in British Columbia. With interest rates on the rise, consumers renewing their mortgages have seen their payments increase by $457 on average.

The Power of Cutting Subscriptions

One of the easiest ways to lower your fixed monthly expenses is to eliminate subscriptions and recurring monthly bills. Take a closer look at your bank statements, credit card statements, and financial documents to identify every direct debit that’s taken out of your account. You may be surprised at the number of services you’re paying for that you no longer use.

Here are some common subscriptions to review:

• Cable, internet, and phone services
• Gym, yoga, or spin class memberships
• Grocery delivery services or meal prep service kits
• Streaming services, such as Netflix, Disney+, Spotify, and Amazon Prime
• Newspaper and magazine subscriptions
• Roadside assistance for your automobile
• Apps for brain exercises, fitness, and calorie counting, or other hobbies

By cutting back on these subscriptions, you could save hundreds of dollars each month. Don’t be afraid to make steep cuts, especially to services that you barely use. Remember, every dollar counts, and cutting back on unnecessary expenses can make a big difference in your financial situation.

Other Strategies to Lower Your Fixed Monthly Expenses

In addition to cutting back on subscriptions, here are three other strategies to help you lower your fixed monthly expenses:

• Negotiate with service providers: Reach out to your service providers, such as your cable or phone company, and negotiate a better rate. Many companies are willing to work with customers to find a more affordable solution.
• Consolidate debt: If you have multiple debts with high interest rates, consider consolidating them into a single loan with a lower interest rate. This can help you save money on interest and make it easier to pay off your debt.
• Increase your income: Finally, consider ways to increase your income, such as taking on a side hustle or asking for a raise at work. This can help you earn more money and put it towards your debt.

Conclusion

Lowering your fixed monthly expenses is a key part of achieving financial stability. By cutting back on subscriptions, negotiating with service providers, consolidating debt, and increasing your income, you can free up more money in your budget to pay down debt and achieve your financial goals.

FAQs

Q: How do I know which subscriptions to cut?
A: Start by reviewing your bank statements and credit card statements to identify every direct debit that’s taken out of your account. Then, take a closer look at each subscription to see if you’re actually using it. If you’re not, consider cutting it.

Q: Can I still cancel my subscription if I’m in the middle of a contract?
A: It depends on the terms of your contract. Some contracts may have early termination fees, while others may allow you to cancel without penalty. Be sure to review your contract before making any changes.

Q: How do I negotiate with service providers?
A: Start by doing some research to find out what other customers are paying for the same service. Then, call your service provider and explain that you’re looking for a better deal. Be polite and professional, and be willing to walk away if they’re not willing to work with you.

Q: Can I consolidate debt with a credit card?
A: Yes, you can consolidate debt with a credit card, but be careful. If you’re not careful, you could end up with even more debt. Make sure you understand the terms of the credit card and that you’re not paying more interest than you were before.

Author: nomoredebts.org

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