With economic threats looming (or present) in our lives, paring back on expenses is critical to stop overspending.

Even if you’re not suddenly strapped for cash, imagine if you could put 40 percent of your income toward a savings goal or paying down debt. What could you do with 40 percent of your income at the end of the year? 

Start with a Budget

If you’ve never made a budget before, now is the time. 

Here’s a quick review of how to make a budget:

  1. Add up your monthly expenses: Look over your last three months of bank and credit card statements to see how you spend your money. Give everything you purchased a category.
  2. Add all your monthly income: This includes wages, child support, alimony, and support from parents.

The income should be higher than the expenses. If they’re not, you’ll need to cut your expenses. The more you reduce your expenses, the better off you’ll be. 

Getting Into a Saver’s Mindset

Getting your budget under control is more than hard numbers. It’s a reflective, emotional experience. Be strict but kind as you decide what to cut and by how much. It’s piece-by-piece that you’ll reach your goal. 

As you cut parts of your spending, readjust your budget. Start with the big hits, and move toward smaller savings. But don’t write off nickel-and-dime amounts: small decisions add up.

Spending less and saving more is a mindset. Adopting a healthy relationship with your money is the real key to financial success. So, to begin:

Ask Yourself: Why Do I Spend?

Understanding what motivates you to spend helps you handle impulsive buying. Some spending makes us feel better. Some spending is for public approval. Sit with your notebook and write about your motivations for making purchases. 

Journal throughout the process to become a stronger saver and smarter spender.

This isn’t about denying yourself the occasional splurge. Instead, it’s about developing in-depth, personal knowledge about your spending habits. Knowing why you buy helps you make tough cuts and spend where it matters most. 

How To Cut Spending and Save Money: A Checklist

Housing

Ask for Rent Reduction

If you have a good relationship with your landlord (and even if you don’t), it can’t hurt to ask about reducing your rent. Inquire with your management company or your landlord. People who live in areas with high vacancy rates are most likely to be able to negotiate.

Lower Your Renters Insurance Premiums

Comparison shopping is the perfect way to fill stay-at-home hours (while rewatching “The Office”). And it often leads to significant savings. Check out your renters insurance company’s competitors to see if a lower rate is available.

Companies like Lemonade are changing the renters insurance game, keeping costs low through leaner operating teams and catering directly to digital natives.

Re-Evaluate Homeowners Insurance

Homeowners insurance has a hefty price tag. Companies like Hippo are doing their best to cut costs for homeowners. 

If you haven’t run the numbers on your home insurance in the last year, now is the time.

>>> Compare home insurance quotes with Insurify <<<

Utilities

Reduce Electric Bills

There are many ways to reduce the cost of electricity. Try some of these:

  • Turn off lights when not in use
  • Use daylight
  • Switch bulbs to LEDs
  • Unplug things when they’re not in use
  • Use a power strip
  • Don’t use your air conditioner
  • Reduce television use
  • Don’t use a microwave
  • Invest in solar for future savings

Reduce Heating Costs

Here’s how every Midwestern dad recommends saving on heating bills:

  • Warm blanket 
  • Hot water bottle
  • Extra layers
  • Program your thermostat (or raise and lower it at key times of day)
  • Seal drafts
  • Lower the heat on your water heater

Reduce Water Bill

It’s all about using less. Here are a few ideas:

  • Set a shower timer to five minutes
  • Shower less, “birdbath” more
  • Use a gallon of water to displace your toilet water tank and use less water when you flush
  • Use less water when washing dishes
  • Compost instead of using a garbage disposal (plus, free compost!)

Reducing Costs on Internet Services

Lower your internet costs by shopping around or reducing internet speed. You may be able to negotiate for a lower rate directly with your internet provider. Depending on your housing, you may even be able to make a deal to share internet services with a neighbor. 

Food

Reducing Costs at the Grocery Store

Cooking at home is your new best friend. 

There are approximately one zillion recipes on the internet, and at least 5,000 frugal bloggers. If you’re already handy in the kitchen, learn to make staples like:

  • Bread
  • Stocks and broths
  • Yogurt 
  • Hummus
  • Soups
  • Jams
  • Sauces

When you know how to make staples at home, you save yourself thousands a year.

Grocery Shopping Tips

If you’ve never been much of a grocery planner, it’s time to become one (you can do it!) Here are eight tips to reduce your grocery bills:

  1. Look for the best deals ahead of time
  2. Buy in bulk when it makes sense
  3. Review your pantry before you shop
  4. Make a list (and stick to it)
  5. Swap/substitute for lower cost items
  6. Choose generic
  7. Shop at the discount grocery store 
  8. Plan your meals before you shop

Meal Planning for Savings

If you plan, you’ll buy the right amount of groceries. And you’ll spend less in the process. Here are some tips:

  • Vegetable-centered dishes will cost less
  • Use herbs and spices to maximize nutrition
  • Build in days or meals for eating leftovers
  • Make extra and save in meal-sized portions for quick meals 

Cut Costs for Drinking Water

If you’re still buying bottled water, you’re wasting your money and poisoning our oceans. Some brands sell nothing more than great tap water…which could be exactly the same as your tap water.

If your tap water is unsafe or comes with an unpleasant taste, invest in a filtration system. A carbon filter system like a Berkey costs more upfront. But you’ll enjoy safe, insanely-crisp water for pennies a gallon.

And if you’re into bubbly water, try a Soda Stream.

Transportation

Cutting Your Car Loan

If you have a car loan, consider trading it in and purchasing a used car without financing. You may lose a little on the trade-in (you might also regain your costs by selling it yourself). But in the long run, you’ll save on interest.

Reducing Car Costs

Some cars are more expensive to insure and maintain than others. For example, luxury vehicles, gas-guzzlers, cars with specialty parts tip the scales. Lower car costs by:

  • Drive less, bike more
  • Downsize to a less expensive vehicle 
  • Share your car with a friend, roommate, or relative
  • Go carless 

Run Car Insurance Quotes

Speaking of comparison shopping: Have you tried Insurify? One form gives you 6+ real quotes on car insurance. Switching car insurance is generally free and a lot easier than you think.

The average Insurify user saves $489 a year!

Medical

Take Care of Your Health

Chronic health issues are not just painful, they’re costly. Eating well, exercising, stretching, and drinking water contributes to a healthier, less-expensive life. 

Take Care of Your Teeth

Anyone who’s been without dental insurance knows how precious teeth are and how expensive dental work is. Brushing and flossing daily keeps gums healthy and dental bills low. 

Household Supplies

Replace Disposable Items with Reusables

There are so many unnecessary disposable products. Some don’t cost must per sale, but added together take more than $1,000 from your annual budget:

Product Example Usage Cost Per Unit Annual Cost Reusable Alternative Cost
Paper towels 2 rolls/week $1.03 $107.12 Kitchen Towels, 8 pack $14
Sponges 2 sponges/month $1.06 $25.44 Dishcloth, 4 pack $0.75
To-go Cups 2 cups/week $0.86 $89.44 Thermos $13.46
Paper plates 20 plates/week $0.07 $72.80 Plastic plates $8.99
Plastic baggies 1 package a month (variety) $3.82 $45.84 Reusable baggies, 10 pc $16.59
Aluminum foil 1 roll a month $2.36 $28.32 Casserole dish $8.99
Wax paper 1 roll every two months $3.49 $20.94 Silicone baking mat $8.39
Plastic wrap 1 roll a month $2.98 $35.76 Wax wrap $13.66
Batteries 2 batteries a month $0.42 $10.08 Rechargeable batteries $25
Swiffer pads 2 a week $0.38 $39.52 Reusable Swiffer pad $8.44
Cotton rounds 2 per day $0.02 $14.60 Microfiber rounds, 6 pk $8.29
Feminine products 14 per month $0.14 $23.52 Reusable pads, 7 pk $13.99
Diapers 6 diapers a day $0.26 $569.40 Reusable diapers, 12 pk (24 changes) $95.98
Total $1,082.78 $237

Many of these have easier-than-you-think replacements that save you money year-over-year. Check out companies like Earthhero for earth-friendly, reusable products. 

Use One Household Cleaner

Separate cleaners for your kitchen and bathroom? Totally unnecessary. 

Degreasers can be made by soaking citrus peels in white distilled vinegar for a week. Make a disinfectant that’s safe around pets and children for pennies: dissolve four teaspoons of bleach into a quart of water. Yes, bleach gets a bad name, but it can be used safely throughout your home.

P.S. Chlorine is one of the few cleaners that’s been approved to kill COVID-19. 

Personal Care

Cut Clothing Costs

Buying used is better for the earth and better for your budget. You can find incredible deals at local thrift stores, but there are plenty of online options too. ThreadUp, Poshmark, and eBay are excellent marketplaces for used clothing. 

If you haven’t had a hilarious night of clothing swaps, now is the time! Change out your entire wardrobe for free by swapping with friends…when quarantine time is over, of course.

Consider donating work-appropriate clothing to a program like Dress For Success.

Spend Less on Beauty Products

You can make beauty products in your kitchen for pennies. Olive oil as a moisturizer, apple cider vinegar as a hair clarifier, sugar scrub for exfoliating. Get creative and explore Pinterest for recipes.

Do you have things like hair styling tools, hair products, brushes, etc., wasting away in a drawer? We bet your friends do too. When it’s safe to do so, host a beauty-product swap party.

Finally, talk to your local supportive housing center about donating lightly used products.

Unsubscribe from Shopping Catalogues and Spendy Newsletters

Out of sight, out of mind should be your credo if money burns holes in your pockets. 

Unsubscribe from emails that tempt you with coupon codes. Remove your address from direct mail advertisements. 

The less temptation you have, the less willpower you’ll need to avoid purchasing. 

Quit Smoking

It’s expensive and bad for your health. Now’s the perfect time to quit. 

Reduce Drinking

“Dry January” is a popular tradition, but you can cut back on alcohol at any time of the year. It’s better for your health. Plus, you can save a ton of money.

Giving

Plan Your Holiday Expenses Now

Creating a budget for holiday spending early is a great idea. Better yet, plan a no-buy Christmas. Ask people you love to do a letter exchange, white elephant, or used book swap. 

Holidays are about loved ones.

Making Room for Charity

People who donate to charity get more than a tax write-off. Benefits include a stronger sense of purpose and a deeper connection with your community. And you’ll gain a greater appreciation for life. 

Make Charitable Donations Do Double Duty

If you want to contribute to the causes you care about, but you’re low on funds, you can still do some important work at low cost to you:

  1. Buy a gift certificate to your favorite local restaurant, ice cream shop, cafe, or retail store 
  2. Plant trees by using Ecosia as your search engine
  3. Volunteer your services or time to local businesses and community organizations
  4. Shop your favorite charity’s affiliate links through programs like Amazon Smile
  5. Or use the Altruisto Chrome extension to donate a portion of your online purchases
  6. Do a walk-a-thon with Charity Miles (when safe to do so!)

Financial Maintenance

Re-Evaluate Your Banking

When was the last time you evaluated your banking relationship? Now’s a great time to learn more about online banks. We love Chime because nickel-and-dime service fees are non-existent there. 

But many options are available. Just look. 

Keep a Register

If you track what you spend, you will become a better spender. Your bank will give you a free register, but you can also use a notebook or an app. Record everything you spend, even cash, and review your expenses regularly. 

Review Your Expenses

Nothing is ever set-it-and-forget-it for long. Make time monthly, quarterly, and yearly to review what you spend your money on. This helps you trim the fat and reach goals faster. 

Use the 24-Hour Rule

When you want to buy something, make a note of it. Wait one day to weed out impulse-buys. Using this rule helps you spend on only the most rewarding stuff. 

Keep an Eye on Your Credit

Maintaining good credit benefits your entire financial picture. That’s because your credit score affects more than your interest rate on a loan. Bad credit:

  • Increases the cost of car, renters, and homeowners insurance (compare insurance quotes with Insurify)
  • Increases cost of student loan refinance
  • Reduces the likelihood of lowering credit card interest
  • Reduces the likelihood of getting approved for a home loan

Calculate for the Total Cost

When deciding if a product is right for you, ask:

  • What’s the cost with interest? 
  • What’s the cost of operating it day-to-day? 
  • Can it be monetized?
  • Does it depreciate? 
  • Is it better for your financial goals?

Asking tough questions like these avoids costly errors. 

Debt Management

Reducing Costs on Student Loans

Consolidating or refinancing student loans could help you cut costs on interest considerably. Interest can easily cost student loan borrowers $20,000 over the life of the loan. Make sure you account for consolidation fees—they’ll be worked into the consolidation agreement. Added fees reduce the benefit of consolidation.

You can also talk to your student loan company about your options to temporarily reduce your payments. Just remember: the less you pay now, the more you’ll pay in interest.

Lowering Credit Card Interest

You can literally call your credit card company and ask for an interest rate reduction. Try it. 

Avoid Using Credit

Using debt products to cover yourself now makes tomorrow more difficult. If you are short on your expenses, do your best to reduce expenses. Never, ever take out a payday loan. 

Entertainment and Fun

Spend Less Going Out 

If you’re not social distancing by now, you’re doing it wrong. We know it’s hard to forgo a night out, but this is critical. Not only are you protecting our communities, you’re saving a ton of money with zero FOMO. 

When it’s safe to go out again, be strategic. 

  • Share an entrée at the bar 
  • Do appetizers or desserts only
  • Set a one-drink maximum
  • Set spending limits before you go
  • Cook with friends
  • Throw a potluck 

Moderation goes a long way.

Cut Your Cable Bill

Now may not seem like the time to cut all television out of your life. But, if you haven’t at least rethought your cable bill, then you’re probably behind the times. There are many, many streaming options out there. Cherry-pick what you watch the most, trim the fat.

Going cable-less makes it harder to watch TV all day. Take that as a hint to spend less time with the tube. Watching birds in your backyard and embracing a little boredom can give your brain a rest from hyper-productivity.

Cut Subscription Services

Take a look at all the subscriptions you pay for:

  • Monthly product samplers
  • Wardrobe subscriptions
  • Monthly clubs (wine, cheese, etc.)
  • Magazines
  • Music streaming
  • Video streaming

Chances are when you run your audit, you’ll find things you’ve completely forgotten. Take a look at what you’re subscribed to and cut anything non-essential or unused. Scale back to free or less expensive versions of services. (Commercials aren’t the worst thing in the world!)

Saving 

Pay Yourself First

Not exactly cost-cutting now, but this will help you in the future. 

If you’re in credit card debt, focus there. You can guarantee a massive return on the money you use to lower your balances. Think of how much you’ll save on monthly service interest charges.

If you’re free of credit card debt, contribute monthly to your savings account. Keeping an emergency fund is key to ensuring road bumps are managed without using credit. 

Using cash reserves is cheaper 99.99999999% of the time than using a debt instrument. 

Miscellaneous

Cutting Memberships

It may be time to cut the gym, studio, Prime—whichever memberships you pay for regularly. If you’re on the fence, give it a test:

  1. Have you used it within the last two months? If not, it’s time to cut. 
  2. Is there a less expensive alternative? Try the less expensive option. 
  3. Can you let it go…for now? Remember, you can pick it up again later. 

Review Your Employee Benefits

Does your employer offer employee discounts? Many large companies negotiate with other companies to provide discounts to their employees. Be sure to take advantage of ones that make your current expenses cheaper.

Buy Used

Used clothing is great. But, electronics, appliances, and other equipment have steep discounts second hand. Check out Craigslist, eBay, and Facebook Marketplace.

Check out Freecycle, an online community. People post in local chapters about stuff they’re giving away.

Take Care of Your Stuff

Performing standard maintenance on your home, appliances, automobile, clothing, electronics—basically all your high ticket items—means you’ll spend less in the long run. 

Don’t Buy Because It’s a Good Deal

A good deal is never a reason to buy something. A rebate is never a reason to buy something. Use deals, discounts, and rebates to purchase things you’ve been waiting for the right moment to buy. 

Reducing Costs through Discounts

Take advantage of discount programs available to you right now. Most of your bills have (sometimes big) discounts for:

  • Autopay
  • Paperless
  • Pay-in-full

Mindset 

Practice Mindful Meditation and Daily Gratitude

Many of us are going through significant changes. Get in the habit of meditating, journaling, or other reflective practice. It will support you through transitions. Practicing gratitude helps us enjoy what we do have and feel less pressure to spend on things we don’t need. 

Start a Frugal-Focused Group 

Get together (virtually) with like-minded people. Post about your goals, ask and offer advice, and get the support you need right now. You’d be surprised how much easier it can be to stay accountable to yourself with a network of support.

Don’t Be Afraid to Use Social Safety Nets

Local food banks, WIC, SNAP, Unemployment—these programs are in place for a reason. There is nothing wrong with using them. These programs are ways our communities show love to their members.

It’s okay to be given something. You matter.

Final Words

Whatever your income, there’s a creative budget that can fit it. Take a deep breath and prepare to self-advocate. Your credit card company is not going to call you and ask if you want to lower your rate. So be brave and make the call. You can do it! 

But you don’t have to do everything right now. Take things one day at a time. Remember that mistakes are part of the process. No one is perfect from day one. Be kind to yourself when you make a mistake and move forward as best you can.

Happy saving!

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Updated June 22, 2020

J.J. Starr is a financial copywriter and enjoys helping readers find the information they need. In addition to her background in banking and financial advising, she is also a poet with an MFA from New York University. She lives in Amherst, Massachusetts. You can learn more at jjstarrwrites.com.