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Learning how to drastically cut expenses might sound scary or too frugal for you. It’s not. It’s life-changing, and in a good way.

Living in debt is like living under a rock. There’s so much life out there to enjoy, but with financial burdens weighing you down, you won’t see them.

Let’s cut to the chase – and see how to drastically cut expenses and get your finances in shape.

Why You should Drastically Cut Expenses

Living in debt is scary. It’s stressful and makes you uneasy. It forces you to make weird sacrifices or decisions. Do you buy this or pay your debt? Do you pay this debt or that debt? Heck, some people even wonder should I pay my mortgage or my electricity?

These aren’t questions you should have to ask yourself. Learning how to drastically cut expenses is life-changing, trust me. You’ll feel freer because you can make your own decisions based on what you want, not on what debt is staring you over your shoulder.

Still not convinced you should drastically cut expenses? Ask yourself the following questions:

  • Do you live paycheck-to-paycheck?
  • Would a financial emergency knock the wind out of you?
  • Are your interest charges almost as much as your rent?
  • Do you have money goals?

Did you nod? Maybe not, and maybe you just love knowing you’re ahead of the financial game or want to save up your hard-earned money.

So let’s get right to the heart of it – how to cut household expenses.

How to Cut Household Expenses

Save Money on Housing

Your house is essential – you need somewhere to live. Your rent or mortgage is nonnegotiable or you won’t have anywhere to live. But, get creative, and you can save on housing in other ways.

Shut the Lights Off

Literally – most people overuse electricity and for silly habits, like keeping lights on. The average American uses, 10,972 kWh, spending more than $2,000 on electricity annually. I can think of many other things to spend $2,000 on.

Want to save electricity? Shut lights off, use energy-efficient bulbs, unplug unused appliances and electronics, wash clothes in warm water (not hot), wait until the dishwasher is full to run it, and program your thermostat to stop using energy when you aren’t home.

Cut the Cord

Terrified of the idea of no more binge-watching? That might not sound fun, but there are several other options outside of cable.

Sign up to stream TV for a fraction of cable costs. Be careful though as many people get caught up in the streaming services’ low prices, stacking up services, and end up paying just as much as their prior cable bill.

Can’t cut the cord yet because of a contract? Ask your provider for a lower rate – you’d be surprised how many might be open to saying ‘yes’ today.

Choose one or two of your favorite streaming services, and you could save more than $1,000 per year!

Quit the Landline

Do you have a cellphone? You probably don’t need a landline then. If you’re in a ‘bundled package,’ cancel it. Cut the cord and the landline at the same time.

If your internet is tied into it, shop around for cheaper internet. New customer deals are hot right now, and it’s another great place to save. Grab a deal for 12 – 24 months and then do it all over again. Take advantage of the deals while you learn how to drastically cut expenses.

Lower your Homeowners Insurance

Home insurance (or renter’s insurance) is a necessary evil. Without it, you’d drown in an emergency, but paying high monthly premiums drains your wallet.

You aren’t stuck with the same provider. Don’t let loyalty allow you to overspend. Each year before renewal, shop around. Tell your agent you’re shopping around too. He might end up saving you time and effort by lowering your rates in order to keep your business.

If not, peace out, and find a company offering new customers better rates.

Skip the Housing

If you really want to save on housing, move in with someone. Have family you could stay with? Move in with mom and dad for a while. Sock away the money you save on mortgage or rent, using it to pay off debt.

If you’re out of debt, you can even choose to sock the money away to pay for a house. Whether you save up a few years of rent or you save enough to make a large down payment on a house, you’ll save significantly when you move back into your own place.

How to Save Money on Food

We need food to live, but that doesn’t mean overspending. Get a little creative and you can save hundreds of dollars a month.

Don’t Eat Out

Eating out is a luxury, often one that many of us just can’t afford to do frequently, let alone every day. Take that $100 or so that you’d spend and save it.

Imagine if you stopped eating out three or more times a week. This could save you up to $1,200 or more a month depending on how often you eat out. That’s around the amount of a mortgage payment for many people.

Skip the Drive-Thru

Drive-thru’s have been to Americans a method of convenience to grab a quick bite of food without having to cook or eat out. But think of the financial cost of this convenience.

You might be thinking that drive-thru’s are quick and cheap, right? But the truth is, the average American spends $1,200 per year on fast food. And that’s for one person. If you have a family – do the math.

Meal Plan

It might sound dreadful since it seems like a ton of extra work every week. You have to sit down and plan meals for a week – or worse yet, a month?

But it’s worth it. You’ll cut out the ‘I don’t know what to cook tonight, so let’s eat fast food or take-out’ thoughts and feelings. You also cut down on your stress, allowing you to make other sound financial decisions. It has a snowball effect.

Make a List and Shop Sales

Take your meal planning one step further and make a list. Shopping off of memory or impulse is one of the worst ways to shop. You’ll buy things you don’t need and not enough of the things you actually do need. Most people overspend when they aren’t focused and don’t come prepared.

Bonus points if you can make your meal plan around that week’s food sales. Grab your sales circulars and create meals and snacks around these sale items. See household staples on sale? Stock up at prices that are a steal. You won’t have to pay regular prices for these items for a while which will allow you to save more money.

Grow a Garden

Gardening can save you money and your sanity. Trust me, it’s soul-cleansing.

Start small, growing the vegetables that your family normally eats. One small plant might produce way more vegetables than you’ll eat in a week or two, so get creative.

Learn to can or freeze the overflow that you can’t eat right away. You’ll add another hobby to your list and have fresh, organic vegetables for many months ahead without spending a dime.

Quit Starbucks

There, I said it.

That coffee habit may be delicious and it may give you energy (or you think it does), but it quickly drains your bank account. Draining your bank account will drain your energy. Trust me. Quit the habit and you’ll feel more empowered.

How to Save Money on Transportation

Your car is another necessity. You have to get from Point A to Point B, but at what expense? You know you shouldn’t drive the latest Mercedes or heck, even a brand new car, but what other ways can you save on transportation costs?

Sell a Car

Do you have more than one car? Many people work remotely or within reach of public transit. If you’re married and have multiple cars, consider selling one. Why pay multiple car payments or for maintenance on multiple cars? Selling a car can snowball into amazing savings. No more:

  • Insurance
  • Maintenance costs
  • Repairs
  • Gas

Instead, use the money to pay off high-interest credit card debt.

Rideshare

If you feel comfortable, consider ridesharing. Co-workers are a great option – you’re with them all day anyway. Are your kids in activities? Consider carpooling and cutting down on gas and wear and tear on the car.

Bike

While the weather is nice, get that bike out and exercise. You save money on gas and overuse of your car. Plus you get exercise, which benefits your health as an added bonus. The better your health, the less you pay in medical bills, another domino effect.

Comparison Shop Insurance

Like home insurance, car insurance creeps up each year. Don’t let them take advantage of you. Shop around for better rates. Most insurance companies offer low rates to new customers to get them in the door. Be a new customer every year and enjoy the savings.

Bottom line for how to drastically cut expenses

Are you not sure if you could add any of these ideas to your lifestyle? Here’s a tip. Make a budget, even if it’s fictional. Write down how different your finances would look if you made some (or all) of these changes. Seeing it on paper might change your mind.

I know saving money lights me up – what about you? Sure, going down to one car sounds scary or meal planning for a month sounds treacherous, but what’s the trade-off? If you can have a fatter bank account or less debt, where do I sign up?!

It takes time and dedication. Don’t forget lots of grace too. We all fall off the wagon, it’s human nature. Get up, wipe yourself off, and try again. I promise it’s well worth it.

When you’re looking for how to drastically cut expenses in your budget, what are some of the items you’re looking to cut back on and what impact do you think that will have on you or your family?