How To Drastically Cut Your Expenses
Need to make drastic savings in your budget?
There are a few things you can do right now to cut back on your expenses today, as well as other methods that will save you money over the longer term.
Your reasons for needing to make cuts could be that you have debt to repay, that you are overspending each month or that you aren’t managing to get any money into savings.
So what should you do? Try these methods for cutting back on your costs.
Ways to cut expenses
Cutting back on your expenses may mean making some big changes, but don’t be too daunted as there are lots of little things you can do as well.
Changing habits can be hard at first, but once you’re in a new groove it becomes easier, as does the motivation of seeing your savings grow.
Examine your budget
Whether you already have a detailed budget or you have never tried setting a budget before, it’s worth taking the opportunity to check in.
By examining the details of your incomings and outgoings, you can formulate a plan that is actually going to work.
To set a budget that will work for you, try these simple steps:
- Get a notebook and write down all of your income.
- Next write down your monthly bills and add up the total cost. This should be essential bills only such as your mortgage, energy bills and water bill.
- Work out your average monthly spend on food.
- Note down your monthly spend on going out and activities for your kids.
- Write down your monthly subscriptions – such as TV streaming and music streaming services and the gym.
- Note your monthly spend on essential shopping – such as essential toiletries and essential clothing.
- Write down your spend on non-essential items. This includes additional clothing, shoes, toiletries that are not essential (ie new moisturisers when you already have three on the go) and takeaways.
- Note how much you are saving every month.
- Next it’s time to figure out where you want to be. So how much would you like to be saving every month? What are your savings goals, and what is a realistic time frame to meet them?
- Now figure out where you can make cuts in your non-essential spending and going out.
Check out these budgeting 101 article for more advice!
Pay yourself first
Make savings your priority by paying yourself first! Set aside your monthly savings as soon as you have been paid.
This way you are not going to have spare cash floating in your account that tempts you to spend.
A savings challenge can motivate you to keep up with savings first ahead of wants.
Save on your energy bills
Soaring energy bills are one thing that many households have in common at the moment.
There are a few things you can do to cut back on your gas and electricity costs:
- Switch off standby on devices like your TV.
- Switch off lights.
- Replace bulbs in your home with LED bulbs.
- Cut your shower time.
- Turn down the temperature on your washing machine to 30 degrees.
- Switch your tumble dryer for line drying laundry.
- Microwave instead of using the oven.
- Fill your dishwasher before running it.
- Turn heating down a degree or two.
Formulate a plan to pay off debts faster
If you are in debt then getting clear of that should be a priority.
Many people advocate prioritising paying off the debt that is costing you the most money.
If your debts all have similar interest rates then you could try paying off the smallest one first if that gives you more of a sense of accomplishment and motivation to keep going.
There are advice charities that can help you formulate a plan for paying off debt that can help you pay it off much faster.
Switch to cash
Many people find budgeting much easier when they only use cash.
Having to physically part with cash can be much more of an incentive to not overspend rather than the abstract act of swiping a bank card.
Cash budgeting can be made much easier, and more fun, with cash envelopes. I have some free cash budgeting envelope templates here.
Hate the idea of withdrawing the cash you need for groceries, fuel and other items every month?
An alternative is to have an extra account or app, it could be something like the budgeting app HyperJar which gives you a prepaid debit card to use. Every week you transfer the money you have budgeted to spend, and that is all you spend.
Resist spending on stuff you do not need
As a reformed shopaholic – just about – I can totally get that ditching impulse spending is incredibly difficult.
This is particularly the case as much of society is built around that constant push to get you to spend and the message that shopping is a reward and a treat.
Here are a few tips that may help you to stop buying stuff:
- Work out how long you need to work to pay for the item.
- Ask yourself, is it a want or a need?
- Focus on what you’re trying to save for.
- Think of buying something? Transfer the value of the item to your savings instead.
- Create a wishlist of items and wait 30 days. Evaluate the list and see if any of them are actual needs.
Haggle down your monthly bills
There are some things you won’t be able to haggle over, your mortgage is probably one.
But there are others where there is room for negotiation. Your TV service and broadband provider are likely to be open to reducing your bills if you tell them you are thinking of switching. See tips for how to haggle down your Sky TV bill here for ideas of what to say.
You can also try switching services such as your insurance provider if you can find a better deal elsewhere, and your broadband too.
If you are out of contract for your mobile phone then look into a cheaper deal. You could probably save a lot if you switch to sim-only.
Rotate subscriptions
Struggle to live without the latest binge-worthy TV shows? Me too!
Instead of having all the streaming services at once, rotate them and watch the latest TV shows one at a time.
It’s so easy to cancel services such as Netflix and Now TV, and with Now I have found they offer me a discount whenever I go to cancel as well.
Just make sure you time your cancellations so you are only paying for one or two every month.
Cut back on grocery costs
Spending on food can be one of your biggest monthly expenses but it is an essential so you can’t cut it out completely!
Thankfully there are usually a few things you can do to cut back on your food costs:
- Meal plan
- Visit the supermarket fewer times
- Cook from scratch
- Buy in bulk – larger quantities cost more but save money in the long run as they are cheaper by weight, do this with things like rice and pasta
- Try ordering online to avoid impulse purchases
- Always use loyalty schemes and coupons before they expire
See more ways for saving money on food here.
Swap new for secondhand
Buying brand new comes at a premium. These days online marketplaces are awash with hardly used stuff at a fraction of the price.
Get in the habit of shopping secondhand on apps like Vinted, or other online marketplaces such as Facebook and eBay.
Switch to reusables
Reusable items can cost more upfront than disposable, however they save you money in the longer run.
Reusables to switch to include:
- Period products – pads, underwear and menstrual cups
- Face wipes to remove makeup
- Washable wipes for cleaning sticky kid hands
- Kitchen towels for cleaning
- Washable cleaning cloths
- Reusable nappies
DIY wherever you can
Avoiding spending money on tradespeople wherever possible can save you hundreds every single year.
Whatever household tasks or repairs you need doing, there’s generally a YouTube tutorial that can talk you through it.
I’ve started colouring my own hair at home, rather than paying for the hairdressers, which is saving me hundreds of pounds a year.
Look for free fun
Activities at the weekend can really add up. I am finding that even just a two-hour activity such as trampolining or swimming costs way more these days.
Save yourself the expense by seeking out free fun.
Take a picnic down to the beach or park, look for towns and places you haven’t been to before to explore.
Use your local library – and download a library app!
Your library is an absolute goldmine of free entertainment.
Not only do they have free books and movies to borrow, but they also often have a schedule of activities for kids.
If you struggle to reach your local library, then try downloading a library app instead! You can borrow ebooks, audio books and magazines and newspapers.
Never go out unprepared
Spending money on bottled water, lunch, snacks and coffee when you’re out and about can really add up.
So make sure you never forget your thermos of your favourite hot drink, or plenty of snacks for you and your kids when you’re headed out for the day.
Pack a picnic for trips out to the park and day trips to fun places. These savings can really add up – I think I saved around £500 last year by avoiding this sort of expenses.
Challenge yourself to a no spend month
If you really need to drum up quick cash then a no spend month where you cut back to only essential spending can be a decent boost.
How much you can actually save depends on what you are spending on non-essentials of course!
You can check out the rules for a no spend month here.
Final thoughts
If you want more ways to save money then check out my frugal living tips.
You might also find these tips for saving £10k in one year useful.
