Skip to Content

10 Sure Ways to Cut Your Expenses

Read on to find out the many ways to cut your expenses, so you can enjoy an extra sum every month to reallocate to your savings account, vacation pot, or even buy your first home!

Becoming the master of your personal finances means being able to keep expenditures under control. The trouble that a lot of people have in the modern world is that we spend on many ‘‘little’’, cheap things that at the end of the month add up to a pretty big number

While it’s true that products cost less than several years ago due to the number of things on offer, we buy more than ever and not only actual stuff but streaming services or subscriptions that drain our accounts on a monthly basis. While some of your purchases might be needed and useful, there are probably tons of them that you could do without.

How can you reduce expenses and save money, then? Keep reading to find out the best ways to cut your expenses.

1. Start Budgeting

The first thing to do when you are trying to find out how to cut expenses is to know exactly how much those expenses are. You can’t meaningfully make cuts unless you can identify where the bulk of your money is going.

The advantage of modern cashless and online purchasing systems is that it creates an easy record for us to examine where we are spending money. These systems mean that more of our expenditure than ever is properly itemized in our bank statements.

So, to start your budget, take your bank statements from the last three months and start making lists of where your money is going. Look for common patterns over the three-month period. Things that appear in your itemizing only once can largely be ignored. These are one-off expenses that you can prepare for, but you don’t have to consider them a regular part of your expenditure.

If you budget on an irregular income, you’ll have to use a low, conservative estimate based on the recent past.

Identify the areas where you are spending most and learn to distinguish between wants and needs (more below). Prioritize the needs, and start cutting expenses from your pure “wants.” You have to be able to make personal sacrifices if you want to bring your personal finances back under control.

When budgeting, you need to be strict, but not unrealistic. Don’t set budget goals that you won’t be able to stick to.

2. Clear Your Debts

A vital step to cut down on expenses is clearing your debts. This may sound obvious to many, but there are a huge number of younger people in particular who are blissfully unaware of how much their debts are weighing them down financially.

Debt and credit are not in themselves bad things. Anyone who aspires to be a homeowner at some point in the future will likely need to get a mortgage. This is a positive and constructive kind of debt that affords you an appreciating asset.

Gathering debt on store cards and on car leases and whatnot is just adding to your financial burden. It is the best policy to clear debts and get to the point where you are not relying at all on debt for any of your regular expenses. Create a plan within your budget that pays down existing debt and cuts out the need to add to it.

3. Cook at Home

We predict that one of the biggest areas of expense in your life is eating out and ordering in. Once again, smartphone apps and food delivery services have made our lives much easier when it comes to deciding what to have for dinner.

Even though we know that we are paying a premium to get these services, we are willing to do so for the sheer convenience of it – if you’re looking for ways on how to cut costs at home, though, those services need to leave your life.

The website Money Under 30 pointed out that the average cost of a commercially prepared meal is $13. The average cost of a meal prepared at home, however, is about $4. That’s a massive saving when you apply that across every day over a year.

It is more work and takes some additional forethought and preparation, but the experience of planning and preparing meals is actually a very satisfying one, and furnishes you with additional social skills to use in your future. It also gives you a chance to be creative with food and food budgets. You can turn money saving into a fun (and delicious) game, and cutting down expenses on the food area will get you a good amount of extra money each month.

4. Make Your Phone Last Longer

Another way to spend more money than you need is to upgrade to the latest phone every year. Companies like Apple rely on our desire to switch it up for new features every year or maybe every other year, but if you are serious about reducing spending, then you need to rethink this practice.

Without wishing to show any commercial favoritism, your average iPhone or other Apple product is pretty well made and will happily last you and serve you for 4-5 years. By making each phone last longer, you are getting more value for the dollars you spend, and that’s true on just about any modern high-end smartphone brand.

Think of the money you save by only upgrading once every four years instead of every year or even every other year.

5. Sell Your Car

A car is just a giant rolling expense machine. Unless you know for a fact that you need this car to live, you should immediately get it and its money-guzzling frame out of your life. Everything about the car costs money — insurance, gas, tax, maintenance, finance payments, and more — and all while you’re spending money on the car, the asset is depreciating in value. It sometimes depreciates faster than you can pay for the thing.

So, unless you can absolutely make a case for needing the car for something critical in your life, then consider selling it and using public transportation instead. You’ll be glad overall to be free of the burden that comes with car ownership, and it’s how you can drastically cut expenses.

If you find that you can’t sell the car completely, then consider our next tip instead.

6. Look for Cheaper Car Insurance

If you can’t sell the car, you can still reduce expenses at home by decreasing its overall cost. One of the best ways is to try and get your insurance costs down. You can do this by getting in touch with your provider and seeing what you can do, or you could switch providers by using a price comparison site to find a better deal. Car insurance is fiercely competitive, so others will likely be there who can offer you a cheaper deal, but don’t expect miracles.

If you really want cheap car insurance, then you need to build up a record of no accidents and no claims and thus prove yourself less of a risk factor for the insurance company. If you can do that, then your premiums will tumble.

In addition, look to make savings outside of your insurance premium, like not using your car for any journey less than a mile. This will save you a lot of gas over time and it’s a great way to drastically cut household expenses.

7. Change Your Address

Looking for more ways to cut back on spending? Then answer this question: Are you spending huge amounts of money on rent every month? This is a common problem with younger people who feel that they need to live in a more expensive part of town for all kinds of reasons: 

  • It’s closer to work
  • It’s near all the favorite night spots
  • It’s convenient for shopping
  • Living downtown makes life easier
  • …and so on.

There are always a lot of reasons, but if you were to stick to these reasons you wouldn’t be able to meaningfully lower your expenses. Depending on where you live, it’s not just rent that is draining your money, but higher local taxes, electricity costs, management fees and more.

A change of address may take you away from the most conveniently located neighborhoods, but they will put you in a financially far less stressful position. Let your money go further by choosing a neighborhood that you can genuinely afford. This is how you can cut expenses on the family budget the fast way.

You can also cut household expenses by being more frugal with utilities – switching to energy-efficient light bulbs, taking quicker showers and charging your devices only when necessary. Limit your spending on these areas and you’ll be able to cut your bills significantly.

8. Cut out Vices

Two of the biggest drains on our wallets are tobacco and alcohol, and definitely the best things to cut out to save money and health. The elevated taxes on these products make them premium in every sense of the word, and whenever we purchase them, either to smoke or drink at home or to drink in bars, we are paying huge markups and throwing our money down the drain.

Consider decreasing your vice expenses drastically or cutting them out altogether. Those nights in the bars can be great fun, but they can be even more so when attended a little less frequently.

Once you see just how much money you can save in this way, it should hopefully shock you into the realization that you don’t need these things or even want them in your life.

9. Buy Used

If you’re wondering how to reduce expenses and save money on a regular basis, buy used stuff. This tip is fairly straightforward, but often one that people overlook. You can make incredible savings if you start to buy more of your things as used and not brand-new. There is a thriving online marketplace for used goods, and sites like Craigslist and Facebook probably offer whatever it is you’re looking for.

The savings you make and the bargains you find will always pleasantly surprise you. Whenever you’re considering a new item for your home, just take a moment to explore the used options first; it’s the perfect way of cutting spending while still getting what you want.

10. Distinguish Between Wants and Needs

Earlier in our list, we mentioned the need to distinguish between wants and needs. This forms the perfect conclusion for our advice on how to reduce monthly expenses. When you can understand that there are things that you need to spend money on and things that you merely want to spend money on, you’ll see how cutting back on spending can be easy.

Cutting out the “wants” until you are in a better financial position makes them all the more hard-earned and satisfying when you finally get them. 

56 Fun Things To Do With No Money - Every Coin Matters

Wednesday 17th of August 2022

[…] Going outdoors equals getting a shot of energy, just for feeling the sun on your face and feeling the breeze. It’s free, it’s refreshing, and most of us don’t do it nearly as often. So choose to do your exercise outside instead of locking yourself up in a gym or your living room. It’s a great way to cut your expenses! […]

How to Become a Millionaire in Your 20s - Every Coin Matters

Wednesday 17th of August 2022

[…] upgrading your lifestyle along with your income. Let’s take it one step further and try to minimize your expenses, especially the unnecessary ones, as much as possible. This is key if you’re trying to learn […]

How to Save $1,000 Fast - Every Coin Matters

Wednesday 17th of August 2022

[…] The next step to save 1000 fast is to get a clear idea of where your money is going, meaning how much you spend and on what each week/month. You can’t rely on your vague recollections here; there have to be numbers and receipts for you to make a reliable budget that you’ll be able to stick to. Then, cut back on unnecessary expenses. […]

Frugal vs Cheap - What's the Difference? - Every Coin Matters

Wednesday 17th of August 2022

[…] reach those savings funds, cuts need to be made in the everyday life expenses, and that’s where frugal individuals try to spend as little as possible, as long as they get […]

How to Make 100 Dollars a Day: 30 Ways To Make it Happen

Wednesday 17th of August 2022

[…] one sounds easier than it really is, right? In fact, the key to cutting your expenses is simply to know what they all are and then know where to make meaningful […]