According to the household expenditure survey conducted by the government in 2013, an average household in Singapore spends roughly S$4,699 per month. If you dig deeper into the survey, you will find that about families spend only about 41% of this on things that they "want" like shopping, travelling, dining out and recreation. Of course, the top 20% of families spend much more on these "discretionary" spendings (46%), while the bottom 20% of families spend much less (38%). Still, is there any way to spend less on what we "need" so we can afford more of what we want?

Focus on reducing your monthly bills

Among all of a typical household expenditures, one of the easiest to reduce without affecting its lifestyle would be its monthly recurring bills. First, other spendings on housing and daily necessities like groceries are relatively difficult for people to reduce meaningfully without causing a big lifestyle change. Secondly, people tend to overlook how much they are spending on their monthly bills because they are often a hassle to monitor and change. Therefore, they tend to be the least optimised among all consumer spending categories. Still, unavoidable monthly recurring bills on utility, telecom and insurance alone comprise 17% of their budget every month. If an average household could reduce this expenditure just by 10%, they could save almost a S$1,000 annually that they could use to go on a vacation or make a big purchase.

Consider shopping online for the best telecom and insurance plan

While it might be difficult to reduce your utility bills without changing how you live, it may be much easier to do so with your telecom and insurance bills. In case of insurance, they almost always have some level of "margin" built into their premiums to compensate their sales people and agencies (i.e. maid agencies, car dealers, etc). For example, car insurance policies being sold by car dealerships can sometimes cost 2x higher than what you could get directly from another insurance company online. This type of pricing practice is prevalent across all types of insurance policies like health insurance, life insurance and foreign domestic worker insurance. If you had purchased even one of these plans from a sales person or a physical location, you could stand to save at least 10-50% on your premiums by looking for a better alternative online.

Also, taking some time to shop for better mobile and insurance plans at least once a year is also a good way to reduce your monthly bill. First, this gives you a chance to review your actual need (i.e. data usage or certain insurance coverages) and assess whether you are overpaying for benefits that you don't actually need, which is the easiest way to reduce your bill. Secondly, both the telecom industry and insurance in Singapore has been experiencing increased competition with new players like Circle.Life, leading to new innovations like SIM-only plans that could help people save money.

Use credit cards to earn rewards & discounts

While most credit cards don't provide rewards on recurring bills (especially on insurance), there are still several that do. By matching these cards to your various monthly bills, you could potentially save a significant amount over time. For example, UOB One Card provides S$100 of monthly cash back for those who spend at least S$2,000 on the card consistently every month, a set up that's quite ideal for this type of situation. For those who prefer a miles rewards card, Citi PMV Card also doesn't seem to exclude any "monthly recurring bill" or "insurance payments" from type of expenditures that it provides miles rewards on, which is typically 1.2 mile per S$1 spent in Singapore.

Decide in advance what to do with your savings

Lastly, before you start making all these changes to start reducing your monthly bills, it would be wise to first set a goal on what you are going to do with the savings. Whether it is to purchase something you've been eyeing for a long time, to take your dream vacation or to save and invest in stocks for extra income, having a clear goal can help you stay on target when you feel tempted to deviate from your goals or feeling too lazy to check on new offerings on the market when the time comes to renew your plans.

This story was first published on ValueChampion. Click here to read.