It’s unsurprisingly frustrating that three quarters of Americans are living paycheck-to-paycheck — with little or zero savings — to cover any medical emergency and unexpected situations.
In 2015, based on Bureau of Labor Statistics, American consumers had an annual expenditure of $55,978. The huge chunks of expenditures, with 10.9 increase, went to personal finance and pension. Meanwhile, expenditures on food, housing, apparel, and services plummeted, but the reduction was insignificant.
Whether you’re starting out a business or are considering to settle down, you need to consider the following expenses and be prepared for these to help you save money in the long run.
Food
In 2013, an average American spent $2.31 per average meal. While in 2015, a Gallup poll revealed that Americans biggest spending was on groceries.
Everyone, of course, needs to eat, but not everyone needs to eat out twice or thrice a week at a fine dining restaurant or just anywhere that needs a huge cash out.
You can also save hundreds every year if you take an inventory of the food you or your family need in a week. Sadly, a lot of Americans are wasting money on spoiled foods and unwanted leftovers.
Utilities
American household spent $3,885 per year on utilities in 2015. Utilities are important as nobody could live without electricity and clean
water these days.
It’s important to allot an amount for your bills on electricity, water, and whichever falls under your utilities expenses before the bill comes out. You can also stick with a feasible monthly consumption for electricity and water, so you won’t run out of budget.
Education
Education spending varies from family to family or from individual to individual. It’s a no-brainer that you’ll have to invest on education as it is always the foundation of everything.
While elite or high-end schools, they say, have better curriculum, facilities and training, they don’t guarantee the person’s success after college. It’s more important to consider the person’s interest and ambition. Parents have a big role in finding and supporting their child’s passion.
Applying for as many scholarships as you can will help fund yours or your child’s education. There are ample of ways and places to get a scholarship, so make sure to look around for potential opportunities.
If you can’t make it to exclusive colleges or universities, you can always consider the top public schools in your state as many of the latter have great curriculum. Another obvious reason is top public schools are less expensive than private schools.
You can also trim down expenses on textbooks. You can check which books you really need for your class and you will have to look for used ones. These days where everything can be sold online then you’ll have more leeway to buy from resellers and auction sites.
This is worth mentioning that the IRS provides tax benefits for you or your dependent’s education.
Healthcare
There’s no arguing that America has one of the most exorbitant health care costs in the world. David Cutler, Harvard’s health economist, mentioned the three reasons for such high cost. First, the “administrative costs” that associate with running the health care system are higher than in any other country. Second, the prices of pharmaceuticals and medical equipment are more expensive in the U.S than the rest of the world. Third, Americans receive more medical care than any other people in the planet.
As a consumer, however, you have the right to explore different options to save on health care costs. Basically, you need to embrace a healthy lifestyle which means healthy eating, exercise, and proper stress management.
Also, you need to pick the right insurance policy. You need to have a lot of information on what the policy covers before a certain illness hits you. You may as well consider a plan that pays for doctors, medications, and care for chronic conditions.
Life and Personal Insurance
In 2015, married couples with children spent the highest budget at 13.3 percent on personal insurance and pensions.
Before giving a nod to the insurance agent, you need to figure out if you really need it. You need to have an honest assessment of your resources and assets if they are enough to cover emergency cases.
Otherwise, if you wanted to get covered, you need to estimate how much coverage you need. Don’t let the insurance guy decide the amount or rely on your intuitions. You should also consider the different payment types that allow you to save money instead of opting to a monthly payment.
Make sure to shop around for quotes — lots of them! Once you’ve got plenty of them, you need to compare each companies and their offers. The cheapest policy does not necessarily mean the best one. You need to ensure the company’s reputation and stability.
Ask your employer if there’s a health insurance coverage that goes along your benefits. You can also inquire to social service organizations.
The best way to save on health and life insurance is to stay healthy. Most policies quote you based on your physical condition. The healthier you are, the better your rates will be!
