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51 Ways to Drastically Cut Expenses

51 Ways to Drastically Cut Expenses Now and Still Enjoy Life

By, Maria Nedeva, PhD

Knowing how to drastically cut expenses and still enjoy the more beautiful things in life is an art form worth mastering.

With mindfulness and practice, you’ll uncover surprising ways to cut household expenses.

Understand how the $100 dollars you save today will grow in the future. Here is a hint – invested in an index fund at 7% average annual return it could be worth $760 in thirty years.

Whether you wish to reduce your spending because you are saving towards your big dream or you must cut expenses to the bone because of reduced income, there is likely one fear that stops you – the fear of having to forego all the joys of life.

What if I told you that you could save the down payment on your dream house, invest for early retirement, and still have fun?

Hard to believe, I know, but it is all true – several years back, we cut our monthly expenses by as much as forty percent and, if anything, improved our quality of life. I even learned how to get rid of several monthly bills.

How did we achieve that?

By understanding that there is much waste in our spending and eliminating it. Also, by conscious spending on what truly matters.

Realize that by more today, tomorrow will be easier. It’s like smoothing out your income, over your entire life.

Parsimony does not come naturally to me. Hence, I analyzed our spending records by category, identified all waste, and devised ways to eliminate it.

Here are fifty ways to help you drastically cut expenses – we used them while continuing to enjoy life to the full.

These cost cutting hacks are about eliminating waste, most you can introduce with immediate effect, and some are surprising ways to cut household expenses.

Reduce Housing Costs

Housing is possibly the largest spending line on a household budget, and reducing it will have a considerable positive net effect on your quest to cut expenses.

1. Ensure you have just enough space. Having too much space, whether owned or rented, is cumulatively wasteful – you overpay mortgage/rent and pay more than necessary on bills. You know you have too much space when there are rooms you have not used in the last six months. If you find that you have too much space, consider downsizing; or renting it out.

2. Move to a less expensive area. If you live in a major city, like Chicago, Los Angeles or New York, moving to a smaller city can literally cut your housing bill by 30% or more. You’ll also find that food and other goods and services are less expensive there.

In most cases, cost savings outstrip a possible cut in salary.

3. Rent out a room in your home. This is a terrific way to defray mortgage or rental costs. It’s important to vet your potential tenant or room mate carefully so you don’t end up with someone who’s incompatible with your lifestyle.

4. Consider an unconventional lifestyle. Living on a boat, in a small home, shared housing, or even “tiny living” can drastically cut living expenses. These less popular living modes are gaining popularity and the savings free up money to save, invest and even retire early.

Cut Monthly Expenses on Food

Some people can look at a pile of produce and come up with ten delicious meals to cook. I am not like that. I look in my fridge and see items of food that do not make much sense together.

If you are like me, I will venture that you waste a large percent of the food you buy; I know I did. Here is how to cut this waste and reduce your monthly food bill considerably.

5. Make a weekly menu. Do you look in your fridge and order take out?  Do you throw away food because you don’t know what to make with it? If you do, you need a weekly menu – start from the meal and deconstruct the ingredients.

6. Buy (only) what you need for the meals on your weekly menu. You deconstructed the recipes, right? Now make a shopping list and stick to it. Okay, you can buy a couple of treats.

7. Create a store cupboard. Store cupboards are fantastic for saving money and increasing security. Mine contains beans, pasta, rice, cereal, canned tomatoes, and selected sauces; generally, things that last.

8. Learn how to use the ‘by-products’. Often recipes ask you to use only part of an ingredient. For example, many meals use only egg yolk. Do not throw away what is left – Google it, and you will find many ways to use it.

9. Cook (and freeze) soups. You would be surprised how far $10 of vegetables go when you cook soups. You can also use any slightly tired green stuff in your fridge to make a tasty and healthy soup.

10. Buy generic and store brands. The savings can be huge and you’ll find that many “brand name” factories also produce store brands for lower cost. Do a taste test and see if you can tell the difference.

Slash Your Monthly Bills

You can save hundreds of dollars or more, per year by cutting monthly bills and subscriptions.

If you’re wondering, “How do I get rid of monthly bills?” here are several actionable money saving tips.

11. Eliminate unused subscriptions. It’s likely that you have more subsctiptions than you realize. If you’re not using a service, or reading the magazine, then cancel it.

To save time, there are companies that will cancel subscriptions for you. This is a win-win, because you’re saving both time and money.

12. Negotiate lower bills. Anything is negotiable! Call your cable company, your cell phone provider, your insurance company, your satellite radio and any other service that you pay for regularly.

It’s surprising how receptive these firms will be to lowering your monthly payment, when they believe you’re ready to walk! Or, you can hire a company to reduce your monthly bills for you!

13. Pull the plug. How many of your electrical appliances are on standby? My guess will be ‘many.’ Word on the street is that you can save between $35 and $50 per year by simply unplugging.

14. Put out the lights. I have come to consider leaving lights on as a waste of the worst kind – there is no need for light when there is no one to see. So, put the lights off; and teach your kids to do it as well.

15. Get yourself some draft stoppers for winter. These handy items come in a variety of styles, from home made snake-type ones to more professional rubber draft stoppers. While you are at it, you may wish to get some heavy curtains as well.

16. Close off rooms that you’re not using. Turn off the heat or air conditioning and shut the door. There’s no reason to warm up or cool down a room you don’t inhabit.

17. Get some more insulation. Insulation is a bit like handbags: one can never have enough of it. It makes a big difference and keeps the heat in during winter and out during summer.

18. Check for drips. Sounds trivial, I know. But dripping water can lead to a large waste of water and higher than necessary bills.

Cut your Expenses by Optimizing Insurance, Banking and Investing

Many people overpay on insurance, banking services, and investment fees without even noticing it.

19. Shop around when renewing insurance. Insurance is a competitive business, and loyalty does not count for much. Shop around for better deals every time you renew.

You can visit big insurance sites where you can get quotes from a variety of providers.

20. Check your life insurance regularly. You may be overpaying for being under-insured if you have not checked your life insurance in the last five years. Shop around. You can get great deals even when you are older – the competition overshadows ageism.

21. Bank with a no-fee firm. Some fee carrying accounts offer great perks like insurance, access to lounges, emergency repairs, etc. Get your numbers straight – do the perks justify the fee? If not, get a free, or extremely low fee, account. We like high yielding cash accounts at Ally, Betterment, and Wealthfront.

22. Overdrafts are an expense you don’t need. Overdrafts are not only expensive; they are very wasteful. Keep your account in the black and do not waste money on paying overdraft fees. Some banks even offer free overdraft protection.

23. Pay off debt. If you have debt, you are losing money every month when you make interest payments. With the exception of mortgage debt, which is tax deductible and enables you to buy a home, other debt is costing you money.

If you have credit card debt of $1,000, you’ll save hundreds of dollars by paying off the debt.

24. Pay off your credit cards in full every month. Do not waste money on paying extortionate interest.

If you’re investment account is earning 7% and you’re paying 15% interest on your credit card, then your actually losing 8%.

25. Cut investment fees by using a low fee robo-advisor. You may be surprised by how much, and how fast, investment fees compound. Use robo-advisor platforms and invest in index funds so that the fee you save compound for you, not against you. M1 finance offers free investment management and thousands of pre-made portfolios. Or you can craft your own investment mix).

26. Slash the fees you pay on your 401k account. Blooom will evaluate and manage your 401(k) plan, so that you’re investing wisely and avoiding uneccessary fees.

27. Automate saving and investing. Have a set amount transferred from your paycheck to savings and investing accounts. What’s left is what you spend. When the money runs out, so does your spending.

28. Consolidate your debt. SoFi is a great site for consolidating student loans and other types of debt. And, if you live in a larger city, they also offer meetups and fun activities.

29. Invest with an app. Choose an investment management app that offers both pre-made and diy investing. After transferring money it, it will automatically be invested in your pre-determined portfolios at M1 Finance – one of favorite investment platforms.

30. Raise your insurance deductibles. You might be surprised at how much you can save on insurance by increasing the deductible. Increase your deductible from $250 to $500 or $100 and you’ll save hundreds of dollars.

Cut Expenses by Changing Your Mind

What you want and need are influenced by outside influences-advertising, friends, and social media.

It is easy to cut expenses if you actually want and crave less. And you can train yourself to stop comparing what you have to your neighbors and realize that money can’t buy happiness (most of the time).

31. cut expenses by wanting less. If you want less, you’ll buy less. Enact a “waiting period” before spending. If you really want something, write it down and then wait a few days. You may change your mind of forget about it in the interim.

32. Shop your closet. Before buying new, shop your closets – all of them. You might be surprised what you find. I’ve found small appliances, shoes and clothes that I forgot that I had!

33. Cut expenses by educating yourself. There are many blogs, podcasts, and books that will teach you how to manage your money. If you take action to cut expenses and learn about money, you’ll be both wealthier and more in control.

Cut Expenses by Saving on Clothes and Shoes

Saving on clothes and shoes does not mean you must go without; or that you should surrender your elegant fashion sense.

34. Buy the highest quality. High-quality clothes and shoes look good and last longer. Do not buy from cheap shops selling the kind of stuff you wear twice and send it to a landfill.

35. Select classic designs. There is a timeless fashion, and there are fashion fads. The ‘little black dress’ is timeless; flairs are a fad. And you know what – in a little black dress you will always look smart.

36. Ensure that your lifestyle matches your wardrobe. It is wasteful to have a row of evening dresses when you do not go to functions where you can wear them. One way not to waste on clothes is to match your lifestyle and your wardrobe.

37. You do not need fifty pairs of shoes. Clothes, shoes, handbags can become an obsession. Do not surrender.

38. Recycle your clothes. When you do not wear some items, you should recycle them. Either give them to a thrift shop or sell them. Keeping clutter is wasteful on many levels.

You might even sell them online!

Reduce Expenses on Transportation and Travel

Transport is another significant expense in your personal and family budget.

39. Do you need two cars? If you are a multiple car family have a closer look – you may find that you do not need two cars, and going down to one will save you hundreds of dollars. For that matter, do you need to own a car at all? With ride share, it may be cheaper to ditch the car.

40. Walk short distances. Walking saves money on transport and is great exercise. When you add the saving, the health benefits, and the savings on gym fees…well, you see what I mean.

41. Cycle when possible. Cycling is also a good exercise, and you can cover longer distances faster than walking.

42. Travel on the cheap. There are countless websites devoted to travel hacking with tips to travel the world affordably. Then there’s the tried and true, camping and RVing adventure.

Drastically Cut Expenses on Entertainment

And I do not mean that you should cut your expenses to the bone on entertainment – my belief in planned and moderate hedonism is unshaken.

43. Work out what gives you real pleasure. Spending money on the fun that lifts your spirits is never wasted, especially when done in moderation.

44. Streaming is cheaper than going to the cinema. Yes, streaming movies is less expensive than going to the cinema. Prime video is the best value for me, but you may prefer using Netflix or Apple TV. Paying for a movie is slightly over half the price of one cinema ticket.

45. Get paid to surf the net. There are services such as InBox dollars that pay you to watch videos and take surveys. So, instead of mindlessly clicking from one site to the next, spend some of your free time making money. There’s even a $5.00 sign up BONUS.

Slash your Spending on Services

This type of expense is unusual because often, we save more by outsourcing than trying to do it all ourselves.

46. Outsource things you hate doing. I have never done any ironing in my life. I believe this is frugal because otherwise, I would have spent my life energy finding ways to avoid doing the ironing. I feel similarly about gardening, knitting, and sewing. All outsourced. (I am writing this post for you while someone is doing our gardening; just saying.)

This extra time can free you up to earn more money, by starting a side hustle.

47. Barter what you can. Swap services you can provide for ones you need to bring in. I used to swap personal training for writing. It works.

There are even collaborative consumerism groups and apps to help with the exchange.

48. Inventory your apps regularly. Keep only the ones you use and cancel the subscription to the rest. Your wallet suffers when the subscription to apps you do not use renews automatically.

Spend Less on Your Kids

We get caught in the mindset that happy kids get a lot of enrichment and stuff. Realistically, giving your child the opportunity to explore on his or her own, free of the demands of “organized activities” might be better in the long run.

49. Buy less for your kids. How much toys and clothes do your kids really need? Find out by watching what they wear and use. Less is more when it comes to clothing and entertaining your kids.

50. Visit resale and thrift shops when buying for your kids. You’ll drastically cut costs on basic clothing and toys that your kids will tire of and outgrow.

51. Limit organized sports and activities. Kids learn a lot from exploring on their own. Allow them that opportunity. Reduce or eliminate expensive sports.

Cut One Expense Today

Set an intention.

Whether you must, or you wish it, you can drastically cut your expenses – monthly bills and annual spending.

Here we suggested fifty one ways to reduce your spending and still enjoy your life to the full. Start with just one change today.

You can slash your spending by as much as $200 within a week. Give it a try!

 Maria Nedeva, PhD, Business professor at the University of Manchester, writes about making money, investing, money management, and paying off debt on The Money Principle.

Disclosure: Please note that this article may contain affiliate links which means that – at zero cost to you – I might earn a commission if you sign up or buy through the affiliate link. That said, I never recommend anything I don’t personally believe is valuable.

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