Cut household expenses and adjust to a new budget. This can be easy to say, but not to think about or put into action. But I know you can do this!
When we talk about painless ways to cut household expenses, the first piece of advice that always gets thrown out is “stop drinking $5 coffees every day”. Well, if you’re anything like me, you were never drinking $5 coffees every day anyway! $5 is a lot of money and it adds up fast.
Cutting household expenses and adjusting to a new budget doesn’t have to be too uncomfortable. Let’s talk about easy ways to make some simple financial changes for long-term success.
The cost of living has increased significantly in recent years, with the cost of gas going up 30% over last year.
In a recent study by the Bureau of Labor Statistics, it was found that Americans spend about $130 billion on household expenses. That is an average of $134 per week for every single person in this country!
People are struggling to make ends meet across the country, so it can be tempting to sacrifice quality or value just to get by. Fortunately there are ways for you reduce household expenses without sacrificing anything! In this article we’ll provide some great tips on how to reduce your grocery bill, utility costs, and other major costs of living!
Conduct an audit so you can see where to cut household expenses
In order to save money, you need a full picture of where your money is going by figuring out what’s coming in and going out. Once you have this information, take another step with tracking down the different ways that it has been running off-the bank statements will do for recent changes or if 3 months are sufficient then print them off now before making any more changes.
The first step towards saving up some extra cash is determining how much comes into our wallets and how much goes right back out again; we must also make sure not enough runs away in interest payments on loans (such as credit cards) because that would be counterproductive to building wealth!
Looking through your bank statements line by line can reveal some interesting information. Next time you find yourself bored at home, grab a few highlighters and go over your expenses for the past year with a fine-toothed comb! Green means income; pink is necessary expenses like groceries or rent; orange represents unnecessary items that should be cut out of our budget to save more money later (like eating lunch every day during work).
Rather than making huge changes all at once, the first step in cleaning up your budget should be to identify which expenses you can cut. You want to do this gradually so that it’s not a painful change for any one day or week, but enough of an impact over time.
This is why I recommend listing out where you are going to make cuts and rank them by order of priority: What will hurt less now? Second easiest thing? The third most difficult thing we could possibly get rid of/cut back on etc.?
The next piece would involve looking through how much money each category costs us per month (we don’t have to list every specific expense). For example, our 2nd highest cost might be “food” and then divide
Patch the leaks in your household expenses
It’s been said that quitting everything cold turkey and cutting out all of your expenses at once is not realistic in the long-term, but that doesn’t mean you should be averse to making small changes. Any money unaccounted for month over month might just be an inadvertent leak. If any disposable income from this paycheck has gone to fast food rather than groceries or necessities like toilet paper? That’s probably a leakage as well when it comes down to things like monthly bills, mortgage payments etcetera…
Rather than quit smoking entirely and cut out alcohol altogether (which isn’t very practical), make small adjustments by patching up these leaks instead – aka anything going towards cigarettes or booze which could really go somewhere else; such as a retirement fund.
Some leaks you may not think about at first may include utilities, food, and entertainment expenses. This doesn’t mean you have to cut out entertainment completely, or that you have to switch to the off-brand for all of your food.
It just means you’re going to be aware of where every single penny of your income is going, so you can make sure it’s accounted for and being spent responsibly. Everyone should have an entertainment budget, and nobody should have to eat off-brand bread! 😉
Cable, internet, and cell phone bills can make up a large chunk of your monthly expenses if you’re not careful. If you use the internet for work, downgrading to a slower internet speed isn’t practical. However, you can easily cut the cable and get Netflix or Hulu if TV is a priority to you.
Call your cell phone company and negotiate a lower rate. Ask about military or veteran discounts, AARP discounts, etc. Any discount they may have, see if you can get it! Some companies even offer discounts for law enforcement, first responders, and teachers. If the discounts are there and you qualify, you might as well utilize them.
Watch your food expenses.
Even if you aren’t eating fast food every day, grocery bills alone add up fast. Our grocery bill was drastically reduced once we started meal planning and using curbside pick-up services. Ordering your food online and picking it up outside the store may be one of the best money-saving inventions ever.
Using curbside pick-up means no more last minute impulse purchases in the checkout line. It means no more Target runs that should have been $50 but were more like $200!
Reevaluate entertainment costs.
How much are you spending on entertainment each month? Whether it’s a Playstation subscription or video game, or going to the movies or bowling, what’s your budget? If you don’t have one yet, now is the time to work on creating one. Like I said earlier, entertainment is important. We don’t need to cut it off completely, but being aware of how much we are spending and making sure it relates to how much it enhances our life is a critical step to cutting household expenses.
After you’ve finished your household financial audit and patched the leaks, it’s time to set a budget for entertainment. Being on a budget doesn’t mean you have to lock yourself in the house all day, but it does mean making smarter choices with the money you’ve set aside for certain activities. Instead of spending $50 going to the movies, find a theater that is showing old movies for $2 per person. Or, watch the movies at home with popcorn that costs 1/10th of the price of movie theater popcorn!
Making small changes like this makes budgeting less painful. You can even turn it into a game. Have everyone in the family figure out the cheapest way to have a family date night. Alternate family nights at home, with board games and popcorn, and going out. Finding cheap bowling days and times, cheap movie days and times, etc will ensure your family never gets bored, but also doesn’t go over budget.
One last thing to check, if you didn’t with your audit, is your recurring subscriptions via Paypal. Also check your Cash App, Zelle, or other payment methods you use. The idea is to track every single dollar that comes in, and goes out. Once you start doing this one simple thing, the rest falls into place rather seamlessly!
The next steps in controlling your household expenses
After you’ve worked on cutting household expenses in a painless way, you may need to go back through and be even more ruthless with expenses. Or, you may want to work on creating more income with side hustles. You can drive for companies like UberEats, or you can create your own streams of income online like hundreds of thousands of others do every day. No matter what your financial situation is, it can improve with planning and budgeting!
- Adjust your grocery bill by shopping at different stores, buying store brands when they’re on sale, or cutting back in other areas where you can afford it.
- Utilize the power of coupons! Sign up for e-mail lists from local businesses to find out about their sales and get updated promotions right in your inbox; once there’s a coupon code available that will save money off an item you need, buy some more than usual so you’ll have enough to cover then remainder with cash and take advantage of the savings.
- Cook from scratch. Not only will you save money on groceries, but your food is healthier and contains fewer preservatives.
- If you own your home, invest in solar panels.
- Take advantage of a shared car service to get around town. This will save on gas and maintenance while working out cheaper than owning your own vehicle outright. Or use public transportation to save money.
What is next? Check out How to Reduce Your Utility Bills.