The cost of living is getting higher by the day, and middle-class dreams are on the chopping block because of it. Here are twelve ways expenses that can hold you back from financial freedom.
Housing Costs
Rent and mortgage payments are now taking up more of income than at any point in the past. The best way to combat this is by looking for homes in areas with a lower cost of living.
Healthcare Expenses
Premiums and out-of-pocket costs are putting a strain on budgets, even when there is insurance coverage. If you’re struggling with healthcare costs, use open enrollment to browse for other options and start putting money away in Health Savings Accounts (HSAs).
Childcare
For working parents, daycare and after-school programs can be prohibitively expensive. Yet they’re also a necessity, so many parents feel like their hands are tied. But you can always check to see if there are local co-ops or community programs that provide affordable childcare options.
Transportation Expenses
Gas, car payments, and maintenance costs can add up quickly. If you can afford it, you might have better success with a vehicle that has better fuel economy to save money. You can also try public transportation and carpooling, especially for commutes that are easy to do on a bus or train.
Grocery Prices
Everyone already knows just how expensive groceries can be, but what can you do about it? Aside from using coupons and apps to look for deals on groceries, do your best to meal plan and buy in bulk.
Utility Bills
Heating, cooling, and electricity bills can vary widely — even from month to month — particularly during extreme weather. You can limit these expenses by investing in energy-efficient appliances and a programmable thermostat to help cut down on energy usage.
Student Loan Debt
Monthly student loan payments hold back financial freedom for years or even decades. See if there are any income-driven repayment plans or refinancing options to lower monthly payments and give your budget room to breathe.
Insurance Premiums
All kinds of insurance are seeing price hikes, and unfortunately, insurance can still be just as vital as ever. But you can check in with your policies often and compare rates
Entertainment and Leisure
Leisure purchases are already seen as extra and unnecessary, but it’s becoming an even bigger problem now. But as long as you build entertainment expenses into your monthly budget, you can enjoy the finer things in life without any guilt!
Credit Card Debt
Credit card interest rates are high, which can lead to a cycle of debt. Fight back by paying off balances every month and look into consolidating debt to lower your interest rates.
Rising Taxes
Higher property taxes and income taxes can leave you with significantly less disposable cash. Keep an eye out for local tax incentives and deductions that may give you some relief come tax season.
Home Maintenance
Home maintenance is essential, but it often means shelling out cash for repairs you didn’t know you needed. We recommend setting up a home maintenance savings account to help fund future repairs and investing in a maintenance schedule to prevent small problems from getting bigger later.
