get tells us what we can’t afford, but it doesn’t keep us from buying it.”
– William Feather
One of the most important survival skills that everyone should have is the ability to cut down expenses. If you are struggling with this, then this article is for you! Now, I know you are eager to consume the entire content of this post, but before we do that, I’d like us to play a little game. Place all five fingers of your left hand in the air.
- Put a finger down if you often find yourselves exhausting most of your income before the month is half done.
- Put a finger down if you find yourself frequently buying random things when you go shopping or on your way home
- Put a finger down if you often find yourself chanting consolation after spending your last cash
- Put a finger down if you’re usually stuck spending on things you eventually never use or use, maybe once.
- Put a finger down if you find it difficult to save.
How many fingers do you still have up? If you have all five or four up, then thumbs up! And hey, even if you don’t have any fingers up, don’t be discouraged. Reading this alone is proof that you want to change and get better at managing your expenses. In this article, we would be walking through some very helpful and painless techniques you’d need to cut down on your spending.
Knowing how to reduce household expenses is also important. It’s a vital step in mastering how to reduce the cost of living without grossly reducing the expenses. If you are on a family budget, you can cut down your expenses to the bone.
This means you have to know how to make budget cuts or cutting back on expenses.
So, below are ten painless ways you can drastically cut your expenses. Let’s get right to them.
1. Create A Budget And Follow Up
If you are keen on cutting down your expenses, you have either discovered you spend unnecessarily and want to imbibe financial discipline or you have something you want to plan towards that wouldn’t give you the luxury of affording unnecessary expenses. Creating a budget is one effective way to cut drastically cut expenses.
Money never stays idle. It must be spent and when you do not have a budget that would guide you as to how you would spend it, then you would spend it on unnecessary things. Make a plan for your money or you would spend it on things you did not plan for. Give every penny you have a job.
This means that you must carefully assign every part of your money to something. You could use a simplified approach like the 50-30-20 rule. This is an approach to take when creating your budget which allows you to allocate 50% of your earnings to your basic and specific needs, 30% to your wants, and 20% to savings and investments.
This approach works well if you are disciplined enough to limit yourself strictly to the budget. There are different approaches to budgeting, so you can easily find the one that works best for you.
The heading of this point states that you follow up with your budget. This is as important as creating the budget. The budget you have created is nothing but a wish list and will do nothing in cutting down your expenses if you do not determine to follow it up.
If you need to be accountable to someone to help yourself stay disciplined, do just that. Take reasonable steps to help yourself follow up with your budget and you will be able to easily cut down expenses.
2. Always Go Shopping With A List
Money is your employee, one that does not like to stay idle or without instruction. By creating a list, you have assigned each dollar bill a role. Although money can be a very terrible master when you let it control you, it is a very good servant that follows instructions. Shopping with a list is a smooth process you can implement with very little sacrifices on your end.
Also, try to reduce the number of times you visit the mall in a week and even a month either for grocery shopping or appliances by buying everything you need wherever you go.
Reduced shopping trips also equal reduced impulse spending. You can get friends to do your shopping for you sometimes. You write down your shopping list and give friends on their way to the local markets or malls. The trick is that you cannot be tempted to impulsively buy what you cannot see and this will, in turn, cut down unnecessary expenses.
Keeping a list of big upcoming purchases can also be helpful to time your shopping strategically to buy when items go on sale. Definitely one of the best ways to drastically cut expenses.
3. Pack Your Lunch And Snacks
By packing your lunch and making your snacks, you can save money that would otherwise have been spent eating out. Eating out frequently is a lot of expenses and is not healthy for you in the long run.
Food is one of the highest portions of the many people’s monthly (or periodic) expenditure. Eating out adds to this and would eventually tell on your income. I know it might cost little every day, but if you calculate how much you spend periodically on take-outs, you would see how significant it is.
Learn to pack your food on the go. By cooking your meals, you can comfortably create a food timetable within your budget and stick to it. It also helps you monitor the number of calories you are taking in and identify food allergies if you have any.
These have both short and long-term positive impacts on your finances. Planning your meals would make it easier to stop eating out. Also, do so at your pace, stop eating out one day at a time.
You’ll be happy you did. Plus, cooking can be a really fun activity, and you can try out new recipes. You’d never master how to drastically cut expenses if you do not know the principle of micro-management, and this is one of those principles.
4. Ever Considered Thrift Stores And Second-Hand Products?
One of my favorite tips on how to drastically cut expenses is to look into the purchase of second-hand products. I have received a lot of backlashes whenever I recommend this strategy to my friends and close associates.
“Are you saying I am broke?”, “Are you trying to reduce my financial capability, my worth, or my worth?.” Trust me, I’ve gotten worse, and thankfully, a few apologies when they eventually get the rationale behind it.
Purchasing used items like furniture, clothing, appliances and more, allows you to save money off your income, and get quality. Plus, it is a fun and exciting activity. As a student, I saved so much money buying used books from senior colleagues, especially the ones that I would only use for one or two semesters.
With online stores, shopping used stuff is now very seamless. You can review the products, speak to the owners, and even have them delivered to you.
Maybe the owner is moving out of the country and wants to have a yard sale, or is moving in with his or her spouse after getting married and wants to let go of stuff. You might even get awesome deals like exchange or barter deals, as you’re dealing directly with previous owners who are more likely to compromise.
5. Track Your Expenses
Tracking your expenses lets you know when you are going overboard with your expenses and lets you pay attention to where your money is going. When you do not track your expenses, there are some purchases you continuously make that you might not pay attention to.
To be more practical, write down every expense in a notebook or document it in an application. By doing this, you will give more consideration to each purchase and will spend consciously instead of mindlessly, and automatically your expenses will be cut down. It takes discipline to be able to track your expenses but it is a price to pay to help yourself become more financially disciplined.
6. Buy In Bulk
Buying in bulk helps you reduce expenses on groceries and other household products. The unit price is cheaper when you are buying more and saves you a significant amount over many different products.
When you buy in bulk, you barely run out. This means you always have enough of that product to use at home, and it is one less thing to worry about.
This comes in handy during emergencies and prepares you ahead for unforeseen circumstances. You are not so affected by price hikes as opposed to when you buy in bits.
Buying in bulk also gives you a higher chance of qualifying for discounts and credits. Also, it saves you time that would have otherwise been used shopping if you were buying in smaller bits. When you buy more, you spend less time shopping overtime. And as you know, saving time is saving money.
Oh, and did I mention that many stores give out coupons whenever you buy large quantities? You could ask when next you visit for shopping.
7. Avoid Impulse Spending
Impulse spending is one enemy of financial stability. To cut back on your expenses, you must have control over spending on impulse. You can institute a 24-hour rule for purchases.
This is a rule that confines you to wait for 24 hours before making any impulse purchase and if after 24 hours you honestly still feel the need to make that purchase then you go ahead to make the purchase.
This rule is means of helping you curbing impulse spending. To cut down your expenses, discipline yourself to avoid impulse spending.
8. Consider Going Cash Only
Another viable way to drastically cut down expenses is switching to spend cash only. Studies have shown that people tend to spend less when they use cash because they get the visceral experience of actually seeing and feeling their money being spent.
When you decide to switch to a cash-only system, automate payments to savings and other expenditures. Then restrict yourself to spending only the leftover cash.
Your money will go where it needs to go and you will be left with only the cash that you have planned to spend and this would keep you restricted to necessary spending and help you cut back on unnecessary expenses.
9. Learn Simple Do-It-Yourself Techniques
Whether it’s a leaking pipe or simple technical faults, fixing them yourself always saves you some change. “But I know nothing about plumbing, or mowing, or wall-patching?” Ever heard of YouTube? Yes, YouTube and Google! There are tons of handy things that you can learn in a very short time on the internet and apply in your daily activities.
With the number of resources available in every field, trust me when I say that Bob the Builder would have nothing on you when you’re done. And you know another good thing about handling these simple fixes for yourself? It builds self-confidence and grit. This is one transferrable trait that can come in handy in other areas of your life.
Plus, it can even become a side hustle that would even increase your earnings. A lot of freelancers started out living a hobby and are now making money from activities they either enjoyed doing or stumbled upon to meet a need.
So yes, stumble on those shoe repairs you’ve been keeping in the corner of the room for the cobbler. You never know, you never really know what’s on the other side of doing it yourself. Nevertheless, know when to call a pro, especially for major repairs. And do not engage in activities that could jeopardize your safety.
10. Cancel Subscription Services
The average American has become bogged down by $10/month subscription services, Netflix used to be all you needed to watch your favorite shows and movies, but with entertainment providers creating their platforms, some people are paying for 5+ streaming services every month while barely even catching up with any.
So, after reading this, you might want to have a long evening scrolling and double-checking those subscriptions on your email.
Services such as video streaming, magazines, gym memberships, and monthly subscription boxes all seem like insignificant charges on their own for each month.
However, these costs add up quickly when recurring 12 times a year over multiple subscriptions. It is important to examine your credit card bill every now and then thoroughly and cancel the subscriptions you forget that you’re paying for.
Even for the services that you frequently use, look out for cheaper and effective alternatives. Finding a group of friends to share services such as Netflix is another way to save money and maximize usage (I don’t know why I’m using Netflix as an example, but you do get my point, right?). Yes, my friends and I share a Netflix subscription. After all, the shared offer is available for a reason.
FINAL WORDS
Cutting down your expenses doesn’t have to be hard or a painful process. By reducing your outflow and directing more money to financial goals, you’ll be more successful in saving, grow your net worth, and build real wealth over time. Cutting down on your expenses is worth it, trust me, and even better when it involves friendlier and less painful strategies like the ones we have learned.
Also, don’t do it alone. Involve family and friends. Let them work with you and check up on your progress as time goes on. You could even join (or create) communities with people who also want to monitor their expenditure and build financial discipline.
Make a deal with a friend or your spouse that you’ll support each other in your efforts to reduce your expenditures. The goal is to have someone following up on your progress with you. When you know you’re checking in with a friend who’s rooting for you, you’ll be far less likely to break your spending limits.
Again, you should also learn to work with a budget. For someone who’s just starting out on using a budget, it might prove difficult, especially if you are not used to policing your spending.
You could always apply the 50-30-10-10 rule. This allocates 50% to your needs (food, rent, utility bills), 30% to your wants, and 20% to savings (this is flexible, and you can alter it based on your peculiarities). Over time, you can slash your want lists and include investments as you get better with budgeting. Do these, and you’ll be on your way to drastically cut your expenses and eventually build better financial discipline.
