Do you find that your monthly expenses are higher than your monthly income? Are you fed up with surviving paycheck-to-paycheck? If so, the chances are you’re looking for an active and rapid way of cutting everyday household expenses.
This article will explain how to drastically cut expenses so that you can clear your debt, save money and live a happier, stress-free life.
Did you know that 78% of full-time workers in the U.S. are living paycheck-to-paycheck? And, 71% of all Americans are in debt?
With horrific statistics like these, it’s no wonder, so many of us are trying to cut back on everyday expenses.
Back in 2011, I found myself spiralling out of financial control. I was working a full-time job, yet the debt kept piling up. It got to the point where any income I had coming in was instantly swallowed be bills and charges. Sound familiar?
One day I said, enough is enough. It was time to do something about it. I had no time to take on another job, as I was already working full-time; plus an extra part-time job. I needed a drastic budgeting plan for cutting down on my monthly expenses.
I admit it was tough, and a lot of sacrifices were made. But, following the tips I share below, I was able to clear my debts in just two years.
It’s not always nice to have to cut back on expenses, but if done correctly, these budgeting tips can help you to take back control of your personal finances and your life.
Before We Get Started
Before I dive deeper into my 11 budgeting tips to drastically cut expenses, there are a few critical steps that I believe are fundamental for budgeting…
Be Accountable & Take Responsibility
One of the hardest things for me was becoming accountable for my finances.
When I knew my bank account was overdrawn or my credit card charges were high, I wouldn’t look at my statements. I guess if I didn’t look, it didn’t exist.
When it comes to finances, this is entirely the wrong attitude to have, and it’s something I knew I had to address and fix.
You should always be on top of your financial situation (whether it’s good or bad) and you should know exactly how much money you have coming in and out.
Set Time Weekly & Monthly
To make sure you always stay on top of your financial situation, allocate a specific time every week to check your accounts for income, bills, credit card statements and direct debits.
This eliminates any surprises from occurring at the end of each month. Plus, if something seems wrong, you can deal with the issue straight away.
I spend 30 minutes checking my finances every Monday morning. I follow this up with a more in-depth check once a month. This is where I update my spreadsheet (yes, I have a spreadsheet), and organize any important letters, receipts, etc.
Communicate With The Entire Household
If you live with family, friends, your spouse or your children, it’s a good idea to arrange a household meeting once a week to discuss your budgets, bills and any financial issues.
Having open and honest communication within the household will make sure that everyone is on the right page and takes responsibility. It can also avoid any unnecessary feuds later on.
Prepare Yourself To Make Tough Decisions
When it comes to cutting expenses, it’s important to understand that you will have to make some difficult decisions. The choices may seem drastic, but they’re necessary for you to get back on track with your finances.
Always remember, these sacrifices are not forever. And, in the long run, it will all be worth it.
Here’s a quick overview on how to drastically cut expenses:
- Slash your cell phone and internet bills
- Shop on a budget
- Stop eating out
- Cut your food expenses
- Cancel your cable subscription
- Cancel your gym membership
- Cut your unnecessary subscriptions
- Find ways to have fun for free
- Find a roommate
- Downgrade your home
- Cut out your bad spending habits
Here Are 11 Ways to Drastically Cut Household & Everyday Expenses.
1. How To Slash Your Cell Phone & Internet Bill
If you’re anything like me, you probably never even get close to reaching year monthly cell phone data plan.
Plus, my internet speed is way quicker than it needs to be.
As long as I can watch Youtube and Netflix without buffering, I’m happy.
And, the average US household spends $67 per month for internet.
That’s an average of $1,764 per year spent on just your cell phone and internet!
Now, I’m not saying you should cut your cell phone and internet contracts completely; because let’s face it, we all rely on them. But, what if you could slash the cost in half? You’d instantly cut your yearly expenses by $882!
Try calling your cell phone and internet provider, to negotiate a new rate that actually reflects your monthly usage.
You’ll be surprised by the savings you can make!
This post by iWillTeachYouToBeRich.com will help you negotiate better phone contracts.
2. How To Shop On a Budget
I would often find myself spending a small fortune on shopping trips. Not ideal for when you’re trying to cut back on everyday expenses. Here are a few ninja tips to help you shop on a budget:
Have a Plan
When you’re on a tight budget, going shopping can be tricky. I can 100% predict that things will not go to plan if you don’t have a plan.
Before you head out to the shops, decide on what you need, how much you have to spend, and what shops you need to visit.
Buy Quality Where It Matters, Go Cheap On Everything Else
I’m all for cutting costs, but there are certain things where you shouldn’t sacrifice quality to save a few dollars. Items such as shoes & beds are things you use every day, and I believe you should buy the best quality for your budget.
Buying quality products also means that, in theory, they will last a lot longer. So, technically it will save you money in the long run.
When it comes to planning your trip to the supermarket or shopping mall, decide on a few things you need, use or love the most. These are your quality items. Everything else goes on the cheap list.
Make a Checklist
Once you’ve created a plan, the next challenge is sticking to it. A checklist will help you to stay focused and will hopefully make sure you’re plan is executed beautifully.
Only Take The Right Amount of Cash
With their smart marketing tactics, supermarkets and shopping malls are notorious for making you buy things you don’t even want, nor do you need.
To stop yourself from being tempted to buy that “once in a lifetime bargain,” only walk with the right amount to buy everything on your checklist.
Limit Your Time
The longer you spend shopping, the more you’ll want to spend. It’s only natural.
I also find that shopping for a long time makes me hungry; which is never a good thing when you’re buying on a budget.
Give yourself a specific time for each store. Set a timer on your cell phone to remind you when you’ve been browsing for far too long.
Walk to the Store Where Possible
This is one of my favorite tips, and it’s something I do a lot. Not only is walking a great form of exercise; it’s also cheaper than paying for transport or gas.
The main reason I love walking is the fact I’m limited to how many bags I can carry home. The fact I know I have to carry everything home is enough to stop me from buying that extra tub of frozen yoghurt.
Suggested Read: Grocery Shopping on a Budget For One Person
3. Stop Eating Out
How often do you eat out?
On average, a U.S. household spends $3,008 per year on eating out. That’s $3,008 you could be putting a to good use.
Here are a few tips I used to cut down my eating out expenditure:
If you’re anything like me, the thought of cooking every day does not sound like fun. Especially when you’re already stretched for time.
That being said, now that I have developed a routine, I quite enjoy it. I also I feel healthier; which is an added bonus.
I also realized that cooking doesn’t have to take long at all. With a quick Google search, you’ll find hundreds of quick and tasty recipes you can cook in no time.
But, if the idea of cooking still doesn’t appeal to you, just remember, it’s not forever. This is about drastically cutting household expenses so that you clear your debts and live a happier life.
Invite Friends Over
Besides being greedy, one of the main reasons we eat out so often is because we’re sociable people.
Personally, I love meeting up with friends and family; and eating out is a convenient way to do that.
But, just because you’re cutting eating out, doesn’t mean your social life has to suffer.
Try inviting friends over for a meal instead. To keep expenses to a minimum, ask each friend to bring a dish.
I found this to not only be a cheaper alternative to eating out, but it’s so much more fun and personal. My friends and family love the idea and have even decided to host their own bring-a-dish dinner parties too.
Eating Out On a Budget
Sometimes eating out just can’t be avoided. When special occasions arise, you’re going to need a few tricks to keep your spending to a minimum. Luckily I’ve got you covered:
- Look at the menu beforehand. Decide on what you’re having before you leave so that you’re not under pressure when you get there.
- Look for special offers, discounts, and coupons.
- Eat a mini-meal before you go, to curve that hungry appetite.
- Stick to soda and water. Ditch the alcohol.
Prep Your Meals
I prep my meals twice a week. That way, my meals stay fresh, and I keep my cooking time to a minimum. Prepping this way will also allow you to buy larger portions for cheaper.
It’s also good for those lazy days when I don’t want to cook. If I didn’t have a meal prepped in my fridge, I’d be tempted to eat out or order a takeaway.
4. How To Cut Food Expenses
With the average U.S household spending $7,000 on food expenses alone, this is indeed an area worth budgeting.
I LOVE food, and my costs reflected this weakness of mine.
Here are my tips for cutting food expenses without sacrificing food itself:
Compare Food Prices
Use tools such as Google Shopping or MySupermarket to compare grocery prices before heading to the supermarket. With a little research beforehand, you’ll be surprised by the savings you can make.
Buy in Bulk When Possible
If you notice your favorite toiletries or cereal brand is on special offer, buy in bulk.
This will make sure you get the best price possible. It can also help to improve your cash flow as you won’t have to spend money buying as regular.
Note: Only bulk-buy the items you ALWAYS buy and use a lot. Don’t be tempted to bulk-buy items just because it’s on special offer.
Also, avoid bulk-buying items that will spoil quickly (check the use-by date).
Coupons are a great way to save on your shopping expense. However, if done incorrectly, they can actually make you spend more.
Here’s the thing; 90% of the coupons you come across will be for items you don’t actually need.
Using coupons because it’s an “awesome saving” is the wrong attitude to have when it comes to cutting expenses.
You should only use the coupons for the items you regularly use and was already going to purchase. The other coupons, throw them in the trash!
5. Cancel Your Cable
Here’s my harsh, yet fair opinion…
If you’re in debt or currently unhappy with your financial situation, you can’t justify, nor can you afford to be spending so much for cable.
Furthermore, those 35.5 hours per week could be spent on an extra job or side hustle to bring in some more income.
If you’re looking for ways to drastically cut household expenses, your cable subscription has got to go; at least for now.
I decided to cut my cable subscription years ago and to be honest, I haven’t missed it once. Especially when there are so many alternatives available.
Cheaper Alternatives to Cable TV
If watching TV is your release and way to unwind, or the thought of not watching TV at all is too much to handle, remember, there are tons of cheaper ways to watch your favorite TV shows.
- YouTube – Free
- Netflix – $8-12 per month
- Amazon Prime – $8.99 per month
I also found that by cutting my cable subscription and lowering my TV consumption, I had a lot more time to spend with my family. Plus, I had more hours to put into making money!
6. Cancel Your Gym Membership
As part of my commitment to becoming debt-free, I did decide to cancel my gym membership.
I believe staying fit & active is super important, and love working out in the gym; which meant this was a big sacrifice for me.
But, by cutting my gym expenses, I was able to save $600 per year!
Luckily, I found alternative ways to work out for free:
Work Out From Home
I did a quick YouTube search, and I found hundreds of exercise and workout routines I could follow from my living room. I found some workouts to be even more intense than working out in the gym!
Take Long Walks & Hikes
Walking is an excellent form of exercise and steady-state cardio. I absolutely love walking, and it’s such a simple, yet effective way to keep fit and healthy.
I also like to go on adventure hikes to explore new cities and landmarks. Check out the best hiking trails to visit in the U.S.
7. Cut All Unused Subscriptions
The cost of your monthly memberships and subscriptions can add up quickly! This includes services such as magazines, monthly boxes, software, and on-demand services.
Individually, each subscription may only be a few dollars per month; but when you total it up, you could be spending $50+ every month on these subscriptions.
I suggest carefully analyze the subscription services you have and ask yourself the following questions:
- Do I use this enough?
- Do I NEED this?
- Is there a cheaper alternative
With a little dig into my direct debits, I found a handful of subscriptions I didn’t even realize I was still paying for. Many of which I rarely on a monthly basis.
By cutting all my unused monthly subscriptions, I saved a total of $360 per year. Not bad!
8. Find Ways to Have Fun For Free
Have you ever calculated how much money you spend each month to ‘have fun’? It’s probably a lot more than you think.
When you’re looking to drastically cut your everyday expenses, that, unfortunately, includes going to the movies or concerts.
Luckily, having fun doesn’t have to cost a fortune! I have found tons of way to have fun, without spending a dime. Here’s a couple of my favorites:
Free Attractions in Your City or Town
If you live in a big city or town, there are most likely tons of attractions and landmarks that you probably take for granted because you live so close.
Why not visit the local landmarks and museums that tourists travel miles to see?
If you don’t live in a big city, plan an inexpensive day trip to your nearest city or town.
Visit a National Park
National Parks are beautiful and never fail to create a day worth remembering. Pack a picnic & take a trip to your nearest national park with your friends and family. Instant fun!
Movie Night at Home
I love movie night…especially when you don’t have to leave the sofa! Pick a movie, pop some popcorn, turn down the lights; and you have a homemade movie night, that’s so much cheaper, yet just as fun!
In my household, we have movie night fortnightly – something we all look forward to and never miss!
9. Find a Roommate
If you have a spare guest room, the way I see it is, you have an empty room you’re paying rent for.
If you’re trying to cut household expenses, find a roommate for that spare room!
Put the word out, and you may find that a friend or family member is in need of somewhere to stay.
If that fails, Air BnB will match you with someone who is looking for a room in the same location.
Even if it’s only for short-term, that extra cash can help you pay those expenses, and clear that debt.
10. Move Into a Smaller Home
If necessary, it may be wise to move into a smaller home.
Look for a cheaper location with fewer rooms or less space. This can bring your rent down by a considerable amount, making your monthly expenses a lot more manageable; which will enable you to clear any debts a lot faster.
You could also consider sharing a home with a friend or roommate. An excellent way to cut your household expenses by half.
Now, I know this may be a bit extreme. And, for some, this may not be a feasible option (if you have a family, etc.).
None the less, this post is about how to cut everyday expenses drastically. Remember, it doesn’t have to be forever. But, if it helps, it may be worth considering.
11. How To Cut Bad Spending Habits?
So, what should you do if you’re notoriously bad with money?
If you have bad spending habits, you may need extra support or guidance to help you out of this situation. Here’s are a few things I’d suggest.
Cut-up Any Credit Cards You Own
If you can’t trust yourself to spend responsibly, I suggest cutting up and throwing away any credit cards you own. This will stop you from spending any more money and occurring any further charges.
Note: This does not mean you can forget about the credit cards entirely. If you have outstanding debt on any credit cards, you’ll still need to pay it. Cutting up your cards just prevents you from creating any more debt.
Use The Envelope Method
At the end of each month, when you get paid, figure out enough money to cover your direct debit payments.
Divide the remainder of your cash into the following envelopes:
- Food Budget
- Utility Bills
Of course, you’ll need to decide on how much is divided into each envelope, but this can be a great way to manage your cash.
You can add your own envelopes to suit your lifestyle. Or, you might decide to do this weekly, instead of monthly.
Ask For Help
Ask your family members or close friends (who you can trust) to help you make decisions. You can even get them to hold your money, to stop you from spending it.
Note: Make sure you can trust that person beforehand. Sometimes writing an agreement or contract beforehand may be appropriate.
You can also look at the following websites for advice:
Ways To Cut Down Your Spending Immediately
I know how hard it can be to budget and cut your expenses, especially in the beginning. That’s why I want to give you a few extra tips to help you instantly manage your spending.
Negotiate Better Rates For Your Utility Bills.
This may seem like a long shot, and I’m not saying this will work. But, sometimes a quick phone call to your utility providers can save you hundreds of dollars!
Simply, explain your circumstances and try to arrange a new monthly rate or a payment plan that is more manageable for you.
Not all companies are evil, and many will try to help you.
Also, look at it this way, they’d much rather collect less money from you each month that no money at all. So, by helping you manage your cash flow situation, it actually benefits them.
For this to work, it will require some sucking up, along with some good negotiation skills.
If done correctly, you can immediately lower your bills.
I did this a few years back, and I was able to save a third of my gas & electric bills!
In fact, I still call my providers once a year, to see if there is a new deal to negotiate. This also works for car insurance and cell phone bills.
Alert Your Friends and Family
Cutting expenses are so much more difficult when you keep it a secret. They’ll continue to invite you to expensive restaurants, the movies and to concerts.
They may even become annoyed when you keep turning down they invites.
I learned this the hard way. I guess I felt a bit ashamed and embarrassed to admit I was on a tight budget.
The moment I confessed up and explained what I was doing to my friends and family, everything became so much easier.
Not only that, a lot of my friends thought it was a great idea, and admitted that they too could benefit from cutting their expenses.
Before I knew it, family members were asking me for tips and advice, and friends were calling me for inspiration.
We even created a group, where we swapped tips and kept each other motivated and focused.
Can You Live On Bare Minimum Living Expenses?
The short answer is yes you can; if you put your mind to it. However, in reality, it depends on where you live and how much ‘minimum’ means to you.
Your location will have a major impacted on your rental rates, as well as how much you earn. These are all things that should be taken into consideration; before you can determine if you can live on bare minimum expenses.
Also, I’d like to add that living on the bare minimum a drastic measure that you should apply to clear or prevent any debts. Personally, I wouldn’t recommend living on bare minimum long-term.
Once you have cleared your debts and have taken back control of your financial situation, you should continue to budget carefully and sensibly. The aim is for your monthly expenses to be less than your monthly income.
But, that doesn’t mean you should never eat out or go to the cinema.
Providing you earn a decent wage from your job, and your budget correctly, you should be able to live a happy, comfortable debt-free life.
Using these 11 budgeting tips, I was able to escape debt and for the first time in my life be financially stable.
It wasn’t easy, and a lot of painful sacrifices were made; but when I look back now, it was totally worth it.
In a two year period, I was able to save $11,000 by merely cutting my everyday expenses using the tips above.
For me, the biggest lesson I learned is you don’t have to spend a lot of money (if any at all) to have fun, stay fit and be happy.
I also learned that many of my family members and friends were also struggling with expenses; which was something I was unaware of before I opened up about my financial issues.
I think, as a nation, we sometimes let our pride get in the way.
We don’t communicate about money and expenses as much as we should. But, when you do, you realize that so many people are in the exact same boat.
Thank you for reading ‘How to Drastically Cut Expenses With 11 Easy Budgeting Tips’
I’m not a financial expert, nor do I pretend to be one, but I hope that these steps help you as much as they helped me.
If you have any questions, or if there’s something you’d like me to address or add to this post, leave a comment below and I’ll respond as soon as I can.
Also, let me know your favorite tips and success stories.