For most Americans, housing is the single largest expense in their budget. According to the Bureau of Labor Statistics, the average American household spends over 30% of their income on housing costs, including mortgage or rent payments, property taxes, insurance, utilities, and maintenance.

Transportation is also a significant expense for most households, often claiming the second-largest share of monthly spending after housing.

With such a large chunk of your budget going towards these two expenses alone, finding ways to reduce costs can significantly impact your overall financial health. Here are some strategies for slashing your transportation and housing costs.

Cutting Transportation Expenses

Optimize Your Car Insurance

Insurance is a necessary expense if you own a car – but that doesn't mean you have to overpay for coverage.

• Shop around and compare quotes. Get quotes from several providers to find the best combination of coverage and price.

• Explore policy bundles. Many insurers offer discounts if you bundle your car insurance with other policies, such as homeowners or renters insurance.

• Consider raising your deductible. Opting for a higher deductible (the amount you pay out of pocket before insurance kicks in) can significantly lower your premiums. Make sure you have enough savings to cover the deductible if you need to file a claim.

• Take advantage of discounts. Many insurers offer discounts for anti-theft devices, a defensive driving course, or even being a good student. Ask your insurer what discounts you may qualify for.

• Usage-based insurance. Some insurers offer apps that track your driving habits, such as miles driven, speed, and braking. Your premiums are then adjusted based on your driving behavior. This option may lead to significant savings if you're a safe driver who doesn't log many miles.

By taking these steps to optimize your car insurance, you could potentially save hundreds of dollars per year on your car insurance premiums.

Find Ways to Save on Gas

For most car owners, gas is a significant ongoing expense – but there are several ways to slash fuel costs and keep more money in your pocket. Here are some tips:

• Use apps to find the cheapest gas prices in your area. 

• Pay with cash instead of credit if a discount is available.

• Use a rewards credit card. If you pay with credit, use a card with rewards or cash back on gas purchases. Just be sure to pay off your balance in full each month to avoid interest charges.

• Drive more efficiently. Accelerating slowly, maintaining a steady speed, and anticipating stops can all help you save on gas. Aggressive driving, such as speeding, rapid acceleration, and hard braking, can lower your gas mileage by as much as 30%.

• Keep your car well-maintained. Regular maintenance tasks like inflating your tires and replacing your air filter can improve your fuel.

Implementing these strategies can potentially save hundreds of dollars per year on fuel costs, depending on how much you drive and the price of gas in your area.

Keep your Vehicle Longer

If you've been in the habit of leasing for short periods or even buying a new one and trading in your vehicle after only a few years, breaking this cycle can help you save money. Since your car's value drops dramatically the day you drive it off the lot and during the first two years with a new car, you're constantly absorbing this depreciation over and over again.

The longer you keep a car, the less you lose to yearly depreciation.

Cutting Home-Related Expenses

Optimize Your Heating and Cooling 

Heating and cooling can account for nearly half of your home's energy consumption. Making intelligent adjustments can yield significant savings without compromising comfort.

Install a programmable thermostat to automatically adjust the temperature based on your schedule, reducing energy waste. During winter, setting your thermostat to 68°F while you're awake and lowering it while you're asleep or away from home can save you about 10% a year on your heating bills. In summer, setting it to 78°F when you're home and higher when you're away can offer similar savings on cooling.

Embrace Energy-Efficient Lighting and Appliances

Replace incandescent bulbs with LED bulbs, which use at least 75% less energy and last 25 times longer. When it's time to replace appliances, choose ENERGY STAR-certified models, which meet strict energy efficiency criteria set by the U.S. Environmental Protection Agency or the U.S. Department of Energy.

Seal Drafts and Add Insulation

Even if you rent, tracking down and eliminating drafts can lower your monthly energy bills. Use weather stripping around doors and windows and caulk any gaps. Ensure your home has adequate insulation, especially in the attic, to prevent warm or cool air escaping.

Lower Your Water Heater Temperature

Setting your water heater temperature to 120°F instead of the default 140°F saves energy and prevents scalding. To further reduce hot water use, consider installing low-flow shower heads and taking shorter showers.

Take Advantage of Utility Incentives

Many utility companies offer rebates for energy-efficient upgrades, home energy assessments, special pricing plans, and even community solar programs. Check with your local utility provider to see what money-saving options are available.

The Takeaway

Adopting these strategies for your home and vehicle may significantly reduce two of the largest expenses most households incur. With thoughtful planning and regular review, you can keep more money in your pocket while reducing your environmental impact. Start implementing these tips today to see real savings over time.