Life can get very expensive, and sometimes it can feel like no matter how hard we work or how much we earn, our monthly expenses just keep creeping up—and that’s not your fault!
Luckily, it’s quite possible to reduce your monthly expenses and save some cash without feeling like you’re sacrificing all the fun things in life.
First things first, let’s get real about why reducing monthly expenses is important. Sure, having some extra cash in the bank is always nice, but it’s about more than just having a bigger number on your bank statement.
When you reduce your monthly expenses, your savings increase and in doing this, you’re taking control of your financial future and building a foundation for long-term financial stability. Sounds sweet, right?
In this post, we discuss some ways you can realistically cut back on your expenses monthly without starving yourself blind.
So, without further ado, let’s dive into some relatively simple and effective ways to reduce your monthly expenses!
Ways to reduce monthly expenses
1. Create a budget
Creating a budget is probably the most important step if you’re keen on reducing your monthly expenses. Sounds like a cliché, right? Absolutely, and with good reason. Sometimes, all you really need to do is budget, and it all falls into place.
Of course, not everyone falls into this category, but if you (yes, you) know that you haven’t ever taken budgeting seriously, this is your sign to do so immediately.
You can start by tracking your income and expenses over the course of a month. This is the last month you’ll be exceedingly reckless, so take a deep breath before going in—You won’t miss it, I promise. Over the course of the month, note all your expenses, including your bills, groceries, entertainment, purchases, and any other regular expenses—I’m talking subscriptions, automatic donations, credit card payments, and fees. Every penny should be accounted for.
At the end of the month, you should have a clear picture of your income and expenses. Now’s the somewhat hard part—actually creating the budget. To do this, you first have to set a realistic saving goal. Don’t worry if it’s only a couple of dollars you’re able to scrounge up in the first few months. A penny goes a long way.
One rule of thumb (and I say this lightly because this is a foundational principle you should always have in mind when it comes to money) is that your essential expenses should always come first. So, allocate your income to the basics like bills and groceries, and leave some wiggle room for unexpected expenses.
Remember, creating a budget is all about finding a balance between your income and your expenses, so don’t be too hard on yourself if you need to make adjustments along the way. Individual drops of water make a bucket full. You have to show up every day—for your present and future selves.
2. Cut down on luxury items
When it comes to reducing monthly expenses, cutting back on luxury items is a no-brainer. I don’t mean go completely cold-turkey—because that’s just pure cruelty—but, as I mentioned in the previous section, your necessaries should always be front and centre to any of your saving efforts.
When you prioritize your needs over your wants, you can free up a significant amount of money each month and you’ll be able to cut down on expenses.
If there’s a situation where you feel you must absolutely indulge, pause, and take a moment to think.
First, identify your actual priorities and values. What brings you the most joy and fulfilment in life? What would you be willing to give up for this sense of fulfilment? When you have your answer, train your spending habits around those things and let go of the rest.
Second, find ways to enjoy the things you love without breaking the bank. You can save hundreds (and even thousands) with deals, discounts, and creative alternatives. Compromise and shift your style around until it fits your budget, and you’ll realise that your hunger has been sated and you didn’t have to spend a fortune.
Finally, remember that cutting back on luxury items is not about depriving yourself or living a joyless life. The pennies you manage to put away when you didn’t give in to your craving show how intentional you are about spending and meeting your financial goals.
3. Cut down on utilities
There are plenty of small changes you can make around your home that can add up to big savings on your energy and water bills. When you make these small changes to your daily habits and home appliances, you free up more money for other expenses and much more goes into your savings.
For starters, try turning off the lights when you leave a room, unplugging your electronics when they’re not in use, taking shorter showers, fixing leaky faucets, running the washing machine or dishwasher when they’re full, installing low-flow showerheads and faucets, landscaping with plants that don’t need too much water, and adjusting your thermostat to be more energy-efficient goes a long way to saving each month.
You can also consider upgrading to energy-efficient appliances and light bulbs, which can save you money in the long run even if they cost a bit more upfront.
Finally, it’s always a good idea to check with your utility company to see if they offer any programs or incentives for reducing your energy usage. Some companies will provide free energy audits, rebates on energy-efficient upgrades, or discounts for low-income households, and you want to take advantage of it if it’s available.
4. Cut down on transportation costs
Not many people know this, but transportation costs eat up a big chunk of our monthly budget. Between gas, car maintenance, and insurance, it can all add up pretty quickly—and not in a good way.
One simple solution to this is to carpool or use public transportation. Not only will you save money on gas and car maintenance, but you’ll also reduce your carbon footprint and help the environment.
Or, you could walk or bike whenever possible. If you live close to your workplace or local stores, try walking or biking instead of driving. Not only is it good for your health, but it’s also a great way to save money and reduce your reliance on cars.
And if you do need to use a car, consider using a fuel-efficient vehicle or hybrid to save on gas costs. By making these simple changes to your transportation arrangement, you can significantly trim down your monthly expenses and put that extra cash towards something more important.
5. Buying in bulk
When it comes to saving money on groceries and household items, buying in bulk can be a game-changer—in a good way this time around.
Not only does it allow you to stock up on items you use regularly, but items also often come with a lower price per unit.
That said, it’s still important to approach bulk buying with a strategy in mind. To save money, you might end up buying much more than you need, and you’ll end up losing even more money. Rather than stocking up on loads of perishable materials, consider splitting bulk purchases with friends or family members to share the cost and avoid waste.
6. Avoid impulse purchases
We’ve all been there – you’re browsing through a store, and you spot something that catches your eye. Maybe it’s a cute dress, a new gadget, or a tasty-looking snack. Before you know it, you’re at the checkout counter with your wallet out and a feeling of guilt sinking in. Impulse purchases can be a major drain on your finances and morale, but, fortunately, there are ways to avoid them.
The first and most important step in avoiding impulse purchases is to be aware of your triggers. Maybe you tend to make impulse purchases when you’re feeling stressed or shopping with certain friends. When you’re able to identify these triggers, you will be more mindful whenever you’re in those situations and you can make a conscious decision to avoid making unnecessary purchases.
Another way to avoid impulse purchases is to set a budget for yourself and stick to it. If you know you only have a certain amount of money to spend on shopping, you’re less likely to make purchases on a whim. This might mean having a restricted credit card of some sort or using a debit card.
And, finally, wait before you make the purchase. Give yourself a day or two to think about whether you really need or want the item, and you may find that the impulse to buy has passed.
7. Get insurance
Whether it’s car insurance, home insurance, or health insurance, chances are you’re paying more than you need to. The key to finding a better deal on insurance is to shop around and compare rates from different providers.
Don’t be afraid to ask for quotes from multiple companies and negotiate for a better rate. With a little of effort, you might save hundreds of dollars per year on insurance.
8. Cut down on entertainment costs
It can be very tempting to splurge on concerts, movies, and other activities, but there are plenty of ways to have fun without breaking the bank.
You could look for free or low-cost entertainment options in your community. Check out local parks, museums, and festivals for fun activities that won’t cost you a dime.
You can also save money by subscribing to streaming services like Netflix or Hulu instead of paying for cable TV.
And don’t forget about the library! Many libraries offer free access to movies, music, and other entertainment options.
By cutting back on your entertainment expenses, you can have just as much fun without spending a fortune.
9. Negotiate your bills
If you’re looking for a way to reduce your monthly expenses, negotiating bills is one of the most effective strategies out there.
Whether you’re dealing with a cable bill, internet bill, or phone bill, there’s often room for negotiation if you know how to do it right.
The first step is to do your research—find out what other providers are offering and use that information to your advantage. Then, call your service provider and calmly explain your situation, making it clear that you’re considering switching to another provider if you can’t get a better deal. Often, this will be enough to prompt the representative to offer you a better rate or some other incentive to stay with them.
Remember, negotiating bills is a skill, and it takes practice to get good at it. But with a little effort, it’s possible to save a significant amount of money each month.
Just be sure to stay polite and respectful throughout the process, and don’t be afraid to ask for what you want—the worst they can say is no!
10. DIY home repairs
By learning a few simple skills and investing in some basic tools, you can fix common household problems and avoid the cost of hiring a professional—which could easily run into hundreds each year.
Some simple DIY home repairs that can save you money include fixing leaky faucets, unclogging drains, patching holes in drywall, and replacing light fixtures or ceiling fans.
There are plenty of online tutorials and how-to guides available to help you learn the necessary skills, and most hardware stores have knowledgeable staff who can answer your questions and provide advice.
11. Reduce credit card debt
Credit card debt can quickly spiral out of control and become a major financial burden.
If you’re struggling with high-interest credit card debt, reducing it should be a top priority. Not only will it free up more money in your monthly budget, but it will also help you avoid costly interest charges that can add up over time.
To start, make a list of all your credit card debts, including the balance, interest rate, and minimum monthly payment. Then, create a plan to pay off the debt as quickly as possible. Consider prioritizing the credit card with the highest interest rate, as this will save you the most money in the long run.
One effective strategy for paying off credit card debt is the Snowball method. With this approach, you focus on paying off the smallest debt first, while making minimum payments on your other debts. Once the smallest debt is paid off, you move on to the next smallest debt, gradually building momentum as you pay off each debt.
Another option is to look into a balance transfer credit card, which allows you to transfer high-interest debt to a card with a lower interest rate (often with an introductory 0% interest rate for a limited time). Whatever approach you choose, the key is to stay focused and committed to paying off your credit card debt as quickly as possible, as this will give you more money to free up every month.
12. Cancel unused subscriptions
You know that feeling when you check your bank account and wonder where all your money went? One culprit could be unused subscriptions. These days, it seems like we’re all signed up for something, whether it’s a streaming service, a gym membership, or a monthly box of snacks.
But if you’re not using these subscriptions regularly, they’re just costing you money (ultimately bulking up your expenses) and eating into your monthly savings. When you cancel all the unused and unnecessary subscriptions, you’ll be able to free up some cash each month and simplify your financial life.
To get started, take a look at your bank statement and make a list of all the subscriptions you’re paying for each month. Then, ask yourself: am I really using these services? If the answer is no, it’s time to cancel.
Most subscriptions can be cancelled online, and many services will even offer a prorated refund if you cancel in the middle of your billing cycle.
13. Use coupon codes and discounts
Who doesn’t love a good deal? Using coupon codes and discounts is an easy and effective way to reduce your monthly expenses.
When shopping online or in-store, always take a few extra seconds to search for coupon codes or look for deals and promotions. You might be surprised at how much you can save with just a little of effort!
There are several ways to find coupon codes and discounts. One easy method is to simply do a quick Google search for the name of the store or website you’re shopping at, followed by “coupon code” or “discount.”
You can also sign up for email newsletters or loyalty programs from your favourite stores to receive exclusive deals and promotions. Just remember, always double-check the expiration date and terms and conditions of the coupon or discount before using it. Also, enquire about cashback rewards from your payment provider.
When you make it a habit to always use coupon codes and discounts, you’ll find that you’re able to save money on all fronts and there will be more money in your pocket each month.
So, there you have it—13 easy ways to reduce your monthly expenses and save some cash.
Remember, it doesn’t have to be all or nothing—even making small changes can add up to big savings.
If you’re looking for more tips on managing your finances, be sure to check out our post on common mistakes people make when trying to save money.
And, to make tracking your expenses even easier, we’ve also compiled a list of the best apps to help you stay on top of your spending.
