Worth Saving? 3 Cost of Living Expenses You May Be Tempted to Cut Down

For many people, cost of living expenses chew through the lion’s share of their income. They get to the end of the month with almost the exact same amount of money. It can prove tempting to save money by cutting down on some cost of living expenses. There are, however, three of these expenses that aren’t worth the meager savings.

Food

There are good ways and bad ways for you to cut down on food costs. Good ways include coupons, buying store brands, and even the occasional bulk buy. Once you do these things, though, you might be tempted to simply start depriving yourself of more expensive food. Think fruits and vegetables during the winter months.

That’s the bad way to cut down on food costs because it will almost certainly affect your health. Your body needs the vitamins and nutrients found in fruits and vegetables. Depriving yourself of these increases the odds of getting sick, which will cost you in medical bills, prescriptions, and missed work.

Insurance

Sooner or later you’ll look at your insurance premiums and think they’re too high. You might say, “I don’t really need that much coverage, do I?” It’s easy to think that way when you’re in good health or haven’t had an accident recently. 

The problem is that it’s hard to predict health problems or accidents. Ditching better insurance coverage for cheaper premiums leaves you in a vulnerable position if anything goes wrong. 

You can find yourself on the hook for thousands of dollars in medical costs or replacing your vehicle out of pocket. You won’t save nearly enough on your premiums to make that a good trade. Plus, you can usually find better rates with another insurance provider.

Savings

Every budget should include money for savings. Ideally, it’s 10% of your take-home income. When things get tight, you can find yourself thinking that there are better uses for that money. “I’ll replace it later,” you think.

The problem is that money that’s not in savings can’t go into a retirement account like a Roth IRA. Even if you do replace those savings later, you can’t reclaim the growth that money experiences in a retirement account. 

No matter what you buy now, it’s rare that it can exceed the long-term investment value.
Many families live on tight budgets, even in a strong economy. 

When it comes to cutting your cost of living expenses, though, some cuts aren’t worth the savings. Food, insurance, and savings are three areas where you really are better off spending the money.