According to ValuePenguin, the average American household spends about 82% of their income on bills, or $5,111 a month. This includes housing costs, transportation, taxes, utilities, food, health, personal care, entertainment and so on.
Powered by Money.com - Yahoo may earn commission from the links above.
If you’re like many people, one of your goals is to save money where you can — or at least make your money go further than it does now. But this can be tough to do when there are so many unavoidable expenses to pay for every month.
Whether it’s for your health, your car or your home, insurance is one of those unavoidable expenses you’re bound to pay this year.
When it comes to health insurance, here’s what Jay Zigmont, Ph.D., CFP, founder of Childfree Wealth had to say: “While it may seem attractive to cut back on your healthcare coverage, or cut it out completely, we all need decent healthcare and it is not cheap. Instead, focus on using what benefits you do have and limiting out-of-network charges if at all possible.”
Zigmont went on to say that auto insurance is likely required in your state if you own a car, meaning you can’t avoid it. However, you could potentially lower costs here.
“If you are working from home, call your insurance agent and lower your miles driven per year. I just did this for my wife and I and saved nearly 20%,” said Zigmont.
Last but not least, you’ll need home insurance if you own a home. If you’re currently paying more than you’d like, shop around and compare plans to get a lower premium. Just make sure you’re not cutting out any essential coverage — like flood or earthquake insurance.
Unless you don’t have a phone or rely on home internet, these are two additional bills you can’t really avoid in 2024. This is true whether you work from home or you just want to be able to communicate with your loved ones.
You could still cut down on costs here, though.
“One way to reduce phone and internet costs includes being willing to jump to other carriers for better rates (especially if you’re someone who likes getting the latest phones) or being willing to go to lower-tiered plans, usually for slightly slower internet speeds,” said Scott Lieberman, founder of Touchdown Money. “Most of the time, it really won’t impact your quality of internet, and you can save anywhere from $20 to $50 per month.”
Utilities
Whether you own or rent, it’s hard to avoid paying for basic utilities — that is, water, electricity and gas. But even then, you could still your lower utility bills.
“Did you know many providers offer energy audits to help you determine where energy is being lost in your home for free?” Lieberman said. “In addition, energy companies can point you to savings and rebates offered by your state if they exist in order to upgrade items in your house that are costing you money by being inefficient.”
Food
Everyone has to eat, and even if you live off the grid and grow your own food, chances are you still need to pop by the convenience store every now and then. But while you can’t exactly avoid buying at least a few groceries, you can reduce costs.
Vanessa Alfaro, regional sales leader at OneAZ Credit Union, had some suggestions to do just that.
“Build a monthly budget that includes a food and grocery bill to help manage the expense,” she said. “Make a list prior to going to the store and download grocery apps to upload digital coupons ahead of time.”
You can also place orders online and do curbside-pickup to avoid temptation in the store.
Housing
“Unavoidable costs are those which are required for you to meet basic human needs. For instance, a place to live requires rent or a mortgage, plus home or renters insurance,” said Mark Henry, founder and CEO at Alloy Wealth Management.
The median monthly mortgage payment in the United States is $1,672, while the average rent is $1,372. You could live in a smaller home or cheaper neighborhood to lower housing costs, or you could get roommates. But you’ll still need to pay for some kind of shelter.
Debt Payments
It could be your credit card, your auto payment or your student loans. Whatever the case, debt payments are another one of those unavoidable expenses for most people. Of course, if you’re debt free, then you won’t need to worry about this one.
If you do have debt, you can’t skip paying it.
“Missing a debt payment can lead to increased interest rates, paying extra fees and hurt your credit score. It’s never worth it to miss a debt payment if you can avoid it,” said Erika Kullberg, an attorney, personal finance expert and founder of Erika.com.
“Whenever possible, it’s also a good idea to make more than the minimum required payments,” she added. “This is especially true with credit card debt. The faster you can pay down your principal balance, the less you’ll spend on interest.”
If you do have debts, there are a few ways to reduce your monthly payments — or lower what you owe altogether.
“With debt, it never hurts to ask for a lower interest rate,” said Kullberg. “If you can afford to pay off a large chunk of the debt right now, you can even ask to settle the debt now for a discounted price. There’s no guarantee this will work, but if it does, you’ll be free and clear.”
Debt settlement can hurt your credit score, so keep this in mind before going that route.
Transportation
You’ll also have to pay for transportation unless you plan to walk or bike everywhere this entire year.
“Transportation needs come with gas and car insurance expenses even if your car is paid off, or public transit costs if you don’t own a vehicle,” said Henry.
But like other unavoidable bills, you could cut costs here.
“Planning ahead can help with gas and transportation costs,” Henry said. “Use an app or online tool to look for the lowest gas prices, and try to fill up before empty so you don’t have to settle for the nearest gas station. If you take public transportation regularly, a monthly or annual pass may be less money in total than buying a daily ticket.”
