When we talk about painless ways to cut living expenses, this piece of advice always gets said, “stop drinking coffees every day”.
Well, if you’re like me, you were never getting coffees from Starbucks every day! Maintaining a budget and cutting household expenses is much more than eliminating runs to your local coffee shop.
Cutting household expenses, setting, and adjusting to a new budget doesn’t have to be uncomfortable for you. Let’s discuss ways to make simple financial changes for long-term budget and savings success.
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5 Ways To Cut Living Expenses
Conduct An Audit
The first step in saving money is to conduct an audit. While you typically hear of audits done by companies, audits are effective ways to analyze your transactions in an account.
With an audit you need to examine the following:
- Transactions or payments coming into the account
- Outgoing money leaving the account in the form of bills or necessities
- All other outgoing transactions.
You can do this by printing off your bank statements. I would start with 3 to 6 months. Grab different colored highlighters and highlight line by line of what’s going out for necessities, and incoming transactions, and everything else that doesn’t fall into those two categories.
Once you’ve divided the income categories and identified them with different highlights, focus in on the category of expenses that are outgoing. Now, what expenses can you cut?
Fix The Leaks
Rather than quitting everything cold turkey and cutting out expenses all at once (which does not last long-term), make small changes to “fix the leaks”. Any money that’s not accounted for each month is a leak.
Money that goes toward fast food is an example of a leak.
Some leaks you may not want to worry about right now include the categories of utilities, food, and entertainment.
You don’t have to cut out entertainment completely or begin buying less food. It just means you’re going to me more aware of where your money is going, so it’s accounted for and spent responsibly.
Everyone should indulge sometimes with entertainment, date nights, and more!
Related Articles: How To Save Money On Groceries
Believe it or not, you can call and negotiate a lower monthly bill on some of the necessities you don’t want to cut back on.
Cable bills, internet bills, and cell phone bills can take a large chunk of your monthly expenses. Many times, if these bills are coming out of your account automatically you may not be aware that your monthly bills are increasing.
Some options you can take is lowering the amount of channels you get through cable or switching to a less costly TV subscription like Netflix or Hulu. Internet can also be lowered by simply negotiating a lower rate for a particular amount of time.
Many cell phone companies have military and veteran discounts, teachers discounts, first responder discounts, AARP discounts and more!
The most important part of negotiating utility bills is knowing exactly what you are paying for and what you need for your personal needs.
Track Food Expenses
We all can agree that since the pandemic has hit, the cost of groceries has dramatically gone up due to inflation.
To off-set the cost of groceries, think ahead and begin meal planning for one week or more. This will help you stick to a strict grocery list of ingredients you need in your meals.
Also ordering online and picking up through grocery or store pickup may save you money if you are an “impulse buyer.” Grocery pick-up means no more last-minute purchases. Just stick to the list of food items and what will feed your family.
Reevaluate Entertainment Costs
How much are you spending on entertainment each month? Purchases like video game subscriptions, video streaming services, PPV movies purchased, bowling night with the family and more all fall into the entertainment category of your budget.
You don’t need to cut it off entertainment completely, just being aware of how much you are spending is the crucial first step of ways to cut back on household expenses.
Then, set a budget for entertainment. Setting a budget means making smarter choices with the money you’ve set aside for entertainment. Instead of going out to the movie theater with popcorn and all, pop some popcorn at home and rent from Redbox to watch a new movie.
Sometimes the best date or family nights are the one’s spent at home!
Get your family involved in this by making a game out of family night budgeting! Challenge your family to find the cheapest bowling days and times, movie night options, and more.
This will not only add an extra element of fun to family or date nights but teach everyone how to spend money responsibly.
Make Larger Cuts
Once you’ve gone through the above ways to cut back on household expenses, dig a little deeper and move some more drastic cuts.
Or think bigger by trying to add more income to your budget! This can be done by creating a side hustle like selling crafts on Etsy, becoming a virtual assistant, looking for a part-time remote job, and so much more. The possibilities are really endless when it comes to diversifying your income streams!
Cutting out unnecessary expenses and maintaining that budget for the long-haul doesn’t have to be painful. It may be a little shocking at first to discover exactly where all your money is going.
However, it is an essential first step to finding ways to cut living expenses!