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When you think about reducing your budget, you likely look at eliminating costs such as streaming subscriptions, daily lattes, and dining out. But you can also shrink your budget by paying upfront for everyday expenses.

Many people cover essential costs using monthly installment plans or piecemeal methods. They purchase groceries and toiletries on an as-needed basis rather than in bulk, and they pay insurance premiums and other bills on a month-to-month basis. But you stand to save substantially if you pay in lump sums instead.

Though paying one large amount may feel like more of a pinch than making more frequent, smaller payments, knowing how much you're saving can ease that pain. Here are a few areas where the lump sum approach can help you save:

Toiletries and Cleaning Supplies

Stocking up on toiletries and cleaning supplies can be a major money-saver in the long run. For instance, toilet paper purchased in bulk may cost you $0.17 per roll, compared with $1.05 at a regular grocery store. Items such as toothbrushes, toothpaste, hand soap, office supplies, and laundry detergent are also cheaper when you buy in bulk. You can save big on baby items at wholesale clubs as well. You may be able to save as much as $175 a year by purchasing diapers from a wholesale store instead of Target.

Non-Perishable Foods

Buying your non-perishables such as rice and canned foods in bulk can yield a 21 percent savings on your grocery bill. You can also cut costs by buying exclusively what's on sale. Opting for a case of black beans instead of chickpeas may mean compromising a bit on the dishes you prefer to make. But if one is marked down, becoming a more versatile cook may be worth the cost savings.

Insurance Premiums

You may be able to save up to 9 percent on your homeowners insurance by paying yearly. Monthly plans accrue administrative fees, so you're better off putting down a lump sum once a year instead of seemingly smaller payments every month.

Auto insurance also tends to be cheaper if you pay in full once a year. Your provider may offer discounts for annual payments because it benefits them to have the money upfront and they have fewer processing expenses associated with lump sum payments.


Smartphones have become everyday essentials, but they're not cheap, especially if you're partial to higher-end brands. Installment plans that allow you to lease the phone through your service carrier may seem tempting since you can get the phone of your choice at a relatively low monthly price. However, you may end up paying interest and other fees that make it far more expensive to lease than to purchase the phone outright.

You might also consider buying gently used phones from eBay or other auction sites for significantly less than you'll pay for a brand-new model. Although you miss out on having the latest version of your preferred smartphone, you'll find it far easier to pay for the phone outright by buying used. The money you save on the phone, along with the fees, can be used toward your savings goals or higher-priority purchases.

Paying for everyday expenses upfront may take some getting used to as it's not easy to see $1,000 or more come out of your checking account at once. However, if you track how much you save on a yearly basis by going that route, it'll become easier and easier to part with large sums once instead of small amounts every four weeks.

This information and recommendations contained herein is compiled from sources deemed reliable, but is not represented to be accurate or complete. In providing this information, neither KeyBank nor its affiliates are acting as your agent or is offering any tax, accounting, or legal advice.

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