How to save money on the biggest expenses in your budget

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Want to find some real savings in your budget? Cutting out lattes and avocado toast probably isn’t the way to go.

Housing, transportation and food: that’s what Americans spend almost 70% of their money on, according to the Bureau of Labor Statistics.

Sure, you can always cut back on extras, but it’s the biggest expenses where we bake a lot of fluff into our budget and call it “essential spending.” Take big swings at these big categories, financial experts say, and you’ll shake lose big chunks of money.

“You should enjoy a latte every now and then,” says Chris Whitlow, co-Founder and CEO of Edukate, a workplace financial wellness provider. “Lattes and avocado toast are impulse buys that are tied to emotions and experiences. Make a concerted effort in cutting your big expenses and you can build your smaller expenses in.”

Here are ways to take the air out of your biggest expenses — housing, transportation, and food — and give a little boost to your discretionary income, to use for savings, debt repayment or even a guilt-free cup of coffee with friends.

Housing

Itemize your housing costs

Housing isn’t just rent and a mortgage. It’s also taxes, insurance, condo fees or homeowners association dues, utilities, repairs, maintenance, pest control, lawn care.

Pull together your numbers so you have a comprehensive picture of your housing costs. Then find line items to reduce or cut.

Find out about off-peak savings programs from your utility providers. Appeal your property tax statement if the value of your 70-year-old home is being hit by the nearby sale of new construction McMansions.

And if you’re struggling with your rent or mortgage payments, remember that they don’t have to be fixed costs. Consider taking on a roommate to share the cost, or renting out a part of your home to cover the mortgage. Don’t rule out a move if it will provide big long-term savings. Downsize to a smaller place or consider a more affordable neighborhood.

Refinance or lock-in a rate before they rise

If you own a home or are looking to buy, now is the time to cut your costs by refinancing or locking in a rate before interest rates increase.

The average 30-year mortgage rate over the past 45 yeas has been a little over 8%, says Whitlow. Even though rates are on the rise, “we’re still 50% below that.”

Push to be mortgage-free

Play the long game to cut your housing costs: What if you were mortgage free?

“If you own a home, you can use auto-pay for your mortgage and add another $100 or more each month,” says Whitlow. “By the end of the year, you may have made an extra month’s payment or more.”

This is the same as saving for your 401(k) in that you’re paying off money sight-unseen, so you don’t feel the pain of paying extra, but you get the reward of paying off the mortgage faster.

Transportation

Ditch the car

Transportation is the only one of these big expenses that has gone down in recent years, according to BLS. That’s because vehicle purchases went down, as did gasoline and oil expenses.

With increased options for carpooling, ride-sharing and public transportation, letting go of the car can free thousands of dollars in your budget.

“I haven’t owned a car in eight years,” says Whitlow. “I don’t pay for parking or insurance or maintenance and I can take my car with me when I travel, because it’s in my pocket.”

Work it, working from home

If your job allows you to work remotely, take advantage of it and realize the savings.

In addition to cutting the raw transportation costs by avoiding the commute, working from home can help your car insurance costs, Whitlow says. “If you do work from home, you can let your insurer know that you’re working from home three days a week and only commuting two, it may decrease your rate.”

Avoid car envy

Easier said than done for a lot of people.

“People see their coworkers getting a new car and they think they need one, too,” says Whitlow. “But cars are depreciating assets.”

Once you’ve bought a car you’re on the hook for those car and insurance payments for months to come, not to mention upkeep. Plus, your needs and budget may change.

“The average tenure of a job is 3 to 4 years,” says Whitlow. “The average car loan is greater than that.”

Food

Meal mantra

One of the most expensive food costs is dining out.

Limit yourself to one day a week and make your own mantra, says Whitlow: Meatless Monday, Taco Tuesday, Wildcard Wednesday, Thai Thursday, New Find Friday.

It sets your expectations, says Whitlow, so that you know you’re only going to go out on that day.

Meal planning 2.0

Impulse buys are usually the reason grocery spending gets out of control. And one of the best things you can do is plan your meals.

Having a plan will address both the logistics and the temptation that arise when mealtime comes around.