How to Minimize Your Fixed Expenses

The negative aspect of fixed expenses is that you have to pay them month after month. On the positive side, however, you know, roughly, how much each fixed expense will be for the month, so it is easy to plan your budget around these costs.

Another positive aspect of fixed expenses is that it is possible to lower them. If you are willing to make major changes, then you may be able to significantly lower the amount of money that you have to use on fixed expenses.

Here are some ideas for lowering common fixed expenses.

• Housing. Rent or mortgage payments are usually the single largest expense of the month. You need a place to live, so these payments are unavoidable. However, you can take steps to lower them. One option is to ask your bank to refinance your mortgage (if you own your home). This will not lower the amount of the loan, but it may decrease the amount of the monthly payments. If you rent, your options are  to 1) move to a cheaper location, 2) find a roommate to share the rental costs, 3) move to a cheaper space in the same building.
• Cell phone and internet bills. These costs are necessary because most people need a cell phone and internet access for work and for everyday communications. Luckily, it is easy to lower these bills. You can cancel your cell phone data plan and rely on wifi when you need to access your social media accounts or browse the internet. You can also explore the possibility of lowering your internet speed. High speed internet may be unnecessary if you are not using your connection to play video games or stream high definition movies on a large screen TV.
• Credit card debt and loans. If you have debt, you may be able to save on monthly payments by consolidating your loans into one account. This may mean transferring balances to a single credit card or perhaps getting a personal loan from your bank or from an online money supplier. If you have a good credit score, you should be able to get a lower interest rate on your consolidated loan. This will not only lower monthly payments, but also decrease the total amount (principal plus interest) that you will have to pay.

What if you cannot cover necessary expenses?

Some fixed expenses are necessities. If you cannot pay your rent or your heating bill, you will not have a warm place to live during the winter. For this reason, you should always have a backup plan in case you cannot cover these important expenses.

One option is to have a ready source for an online personal loan. These loans can be obtained quickly; the money can usually be deposited in your bank account in a few hours. You can use the money from these loans to cover your necessary expenses for the months when you do not have funds in the bank.