Do you find yourself living paycheck to paycheck? Or do you have a high-interest debt to pay off? Then working out how to drastically cut expenses can help your finances. You may need to cut back on your expenses, especially if you spend too much money, or don’t make enough money to cover basic costs and build a savings account.
It can be easy to spend money until things spiral out of control and you find yourself in debt. So, if you’re looking for actionable tips on how to cut expenses to the bone drastically, this is what you need.
Most of these tips for cutting expenses involve spending less and are applicable in your daily life. The following are areas you need to address as you cut expenses.
1. Spend With a Budget
If you want to save money, then start with a budget. A budget helps you live within your means. It also shows you where your money goes, so you’re better able to limit your spending. So, start by setting up a budget—it’ll show you where you are financially and highlight areas that need change.
2. Use a Grocery List When Shopping
You should never go shopping without a list. A list helps you stay on track; otherwise, you may give in to temptation and buy things you don’t need or that you think you’ve run out of (but haven’t) or that look nice (meanwhile, there are lots more important things to use that money for).
You spend exactly what you need using a list—no more or less.
You can also save a bunch buy shopping in bulk at places like Sam’s Club. The have a special deal going on right now to get a membership for half off.
3. Have a Meal Plan and Reduce Eating Out
A meal plan helps you save money. For example, having a meal plan for the week and shopping with that in mind ensure there’s enough food at home. This means you’re less likely to order takeouts, avoid food wastage, and won’t be tempted to go back to the supermarket because you forgot something. Going back may cause you to spend more money on things you didn’t plan for. Like Gas for your vehicle.
4. Change Subscriptions and Bills to an Annual Payment
Most service providers charge less (or offer a discount) if you pay for a year’s subscription or even more. Even if this option isn’t available on their website, you can call to see if they have a special deal or offer for you. Besides, this also works for rent, but you may have to pay much larger upfront money. If they do not offer a yearly payment make sure you check and see if they will take out an automatic monthly payment out of your checking account. I save over $10 per month on my cell phone plan by paying automatically each month. That is over $120 each year.
5. Cut Down on Bills and Subscriptions You Don’t Need
We often subscribe to certain services and may not even use them or “forget to cancel.” This is a pure waste of money. Set time aside, go through the things you subscribe to/bill, and unsubscribe from those you’re not using. You’d be surprised how much you end up saving.
6. DIY Beauty Regime
As a lady, maintaining your hair, body and nails can cost a few hundred dollars if you visit salons. However, you can also do these things from the comfort of your home and save yourself money. Try doing it yourself by watching a few YouTube videos or having your friends link up for a pampering session.
7. Unplug Unused Devices
Experts believe that standby power consumption accounts for about 5-10% of your household energy consumption. What does this mean?
Your electronics use power when they are not in use or turned off. This, in turn, causes a waste of money. Better still, unplug your devices or buy a smart power strip that shuts down electronics while in standby mode.
8. Get Your Homeowner’s Insurance Lowered
Not many people know this, but a great way to cut down on expenses is to shop around for insurance quotes every six months. Each company offers you a different price based on its pool of insured customers. So, one company can offer you a price that enables you to save more than if you go for another company.
9. Sell the Second or Third Car
If you have been wondering how to live on a budget and how to drastically cut expenses, then it’s time to stop thinking. If your household owns more than one car, perhaps you need to sit back and think about whether you actually need both or more. Of course, it’s convenient and makes moving about easier, but with slight adjustments, you’ll be able to manage well with one car.
10. Shop Secondhand
Most of the best clothes can be obtained from secondhand stores. If you want to be fashionable on a budget, you shouldn’t miss out on this. Depending on your location, you may be able to find a nice range of designer clothes for lesser prices. You may even wonder why you only bought new in the first place.
11. Set up Automatic Debt Repayment
If you have outstanding debts, especially a high-interest debt, it’s best to clear these first. An automatic debt repayment system debits a specific amount from your monthly income. Most companies, especially those that manage student loans, provide interest reduction rates if you sign up for automatic repayments. You not only pay less interest, but it also ensures you don’t pay any late fees or miss payments.
12. Get Rid of Cable and Television
Most people watch a lot of television, and cable subscriptions can punch a hole in one’s pockets. A fine way to cut down expenses is to get rid of cable. You could subscribe to streaming platforms like Hulu and Netflix instead. At the very least give your cable company a call and ask for a better deal. You would be surprised how often they will lower your monthly charges.
Final Thoughts on How to Drastically Cut Expenses
Knowing how to drastically cut expenses can eliminate unnecessary spending and help you save in the long run. Whether you’re living from paycheck to paycheck, struggling to clear off debts, or never seem to have enough money, it’s possible to have a strategy that lets you save. All you need to do is work with a budget, spend less, and make drastic changes in your lifestyle. While you work within your budget, you might want to give a side hustle a thought as well. This could help you build an rainy day savings fund.
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