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How To Cut Your Expenses: 5 Strategies To Reduce Monthly Living Costs

When we are looking to save money, for whatever our financial goal is, one of the first places we look is our expenses. More specifically, how to cut your expenses and reduce your monthly living costs.

The problem is, so many people feel that they have to give up everything they love in order to cut their budget down and reduce their expenses. But this isn’t always the case.

In fact, there’s a lot of money you can be saving by implementing a few simple strategies.

The key to these strategies is that they aren’t just things you do once. While doing them once will almost guarantee a reduction in your monthly cost of living, the real magic is when you repeat these every 6 – 12 months and keep finding new ways to save even more money.

This isn’t just fluff about cutting out your $5 daily coffees – these are real actionable strategies to help you in some cases drastically cut your expenses and put more money back into your pocket.

Cutting household expenses and adjusting to a new budget doesn’t have to be too uncomfortable. These simple steps really do add up fast.

Before You Start

As always, before you start any change in your life, it’s important for you to determine your WHY.

Sure, saving money is always a good thing, but without a reason for wanting to cut back on your expenses, you’ll likely lose motivation along the way and run out of steam.

You don’t need anything super deep or prolific as your motivation.

You could simply have a goal of saving an extra $200 a month to put towards a credit card bill, or to put into a vacation savings account, or to save for a big purchase you’ve been wanting to make.

Having a specific goal in mind will help you stay on track.

Try to put a monetary value on your goal too.

For example, if your goal is to save an extra $200 a month, then you’re going to keep at the task of cutting your expenses until you reach that $200.

Whereas if your goal was to just cut your expenses then you could simply cut your cable and you’d achieve it.

Specific goals get specific results.

With that in mind, let’s find ways you can cut your expenses with these 5 strategies:

If you're looking to save money here are 5 strategies to reduce your monthly living costs and cut your expenses.

1 – Conduct A Personal Finance Audit

The first step in saving money is to figure out what’s coming in, what’s going out, and most importantly, where it’s all going.

Print off your bank statements for the past 3 to 6 months. If you’ve already made some recent changes, 3 months of bank statements will do.

If you really want to dig in and figure out where your money has been running off to, print the full 6 months.

Grab a few highlighters and go through your bank statements line by line. Set it up however you want, but for example, you can use pink for income, yellow for necessary expenses, and green for unnecessary expenses or items to cut out.

Work out which areas you’re spending the most money on and which areas you can cut back.

When it comes to percentages, it can be difficult to follow a hard and fast ‘rule’. This is because your living expenses can vary greatly depending on where you live.

You might have a long commute so your transport costs are high, but you may have cheaper housing so your home costs are lower.

Working out what percentages are given to each area of your life can give you a good quick overview of where you spend the most money.

You can focus on the following areas and ideas to see if you’re able to use any of these to help you cut your expenses:

If you're looking to save money here are 5 strategies to reduce your monthly living costs and cut your expenses.

Can You Make Your Housing Cheaper?

If you’re renting your home, is it possible for you to move to a place that is cheaper? Or perhaps you could even negotiate cheaper rent?

Even if you’re only saving $20 – $40 a month, that’s still money towards your savings goal.

If you own your home, can you negotiate the interest rate? Ask to have account keeping fees waived for on-time payments? Can you make sure your payments are on time to eliminate any overdue fees?

Alternatively, can you rent out a room or a space in your home for additional cash flow? While this doesn’t directly reduce your expenses, if you use that money towards your rent or your mortgage payment, then it will inadvertently reduce the expense.

Can You Reduce The Cost Of Transport?

Transport costs can often creep up without you even realizing it. Whether you use public transport or drive yourself, it’s easy to lose hundreds of dollars a month to get us around,.

What options do you have for transport?

Can you prepay public transport for a reduced cost? Can you buy gift cards for a gas station using coupons or discounts and end up paying less for gas?

Can you carpool? Can you send your kids to school via carpool? Does your kid’s school offer a local bus service?

What Can You Cut Completely or Reduce?

Go through your list of expenses and see if there are any expenses in there that you can cut completely.

Sometimes we sign up for something because we think we will use it, but end up not needing it at all.

Or maybe with a little tweak you could save some money by reducing the frequency of expenses. For example, if you have a yard maintenance company come and do your yard once a week, you could stretch it out to once every two weeks, or once a month.

This can be quite a full-on step so take some time and remember to keep in mind what your financial goal is.

If you're looking to save money here are 5 strategies to reduce your monthly living costs and cut your expenses.

2 – Patch Any Money Leaks

The next step is to find areas in your spending that are costing more than what they should – aka money leaks.

These money leaks are often small expenses, but over time they can really add up. Because they are small, they usually go unnoticed, but those few dollars here and there can be the difference between achieving your financial goal, and just missing out.

Some common areas for money leaks are:

Subscriptions You No Longer Use

The most obvious ones are things like Hulu, Netflix and your cable TV.

But there are some sneaky ones too – check your app subscriptions (I just checked mine and saved $21 a month), subscription boxes, magazine, and newspaper subscriptions.

You may need to check your PayPal statements too in order to make sure you’re finding all the subscription costs.

Gym Memberships You Don’t Use

You’re not alone if you’ve signed up to a gym only to stop going a few months later… it’s okay. But, if you’re still paying for that gym membership, then that’s money you’re missing out on!

This goes for any online gym/exercise subscription too.

Find them and cancel if you’re no longer using them.

If you're looking to save money here are 5 strategies to reduce your monthly living costs and cut your expenses.

Bank Fees On Accounts You Don’t Use

Do you have any bank accounts that you don’t use or don’t often use but are still costing you money? This goes for any credit cards too.

Some accounts charge up to $10 a month just to keep the account open. And credit card annual fees can be upwards of $400 a year!

Check to see if you could be saving money by reducing or switching your bank accounts.

Frequently Eating Out

While ordering take away and eating out might seem like a cheap option when you find a good deal, more often than not the cost of eating out is far greater than the cost of cooking your meals at home.

Even if you don’t like cooking, can’t cook, or struggle to find time to cook, there are ways you can meal plan, prepare in advance, and bulk cook in order to avoid frequently eating out.

This doesn’t mean you shouldn’t eat out at all!

It just means that you should assign a particular night (try to choose one that is the busiest night and therefore more beneficial for you to eat out) or a set number of times you eat out per week.

You can also cook double meals and freeze a portion so you have ready-to-go meals to help you avoid eating out so often.

Daily Trips To The Grocery Store

It took a while to convince my husband that daily trips to the grocery actually cost us more money so. I grabbed a copy of our bank statement and showed him just how much we were spending on groceries.

It was more than double our allotted grocery budget!

I still don’t really know where all of that food went, but needless to say, this was a huge money leak that needed to be plugged.

Rather than heading to the grocery store every day, try to stick to shopping just once a week.

If you find you need to head there more often for a fresh produce top-up, add one more trip in or stop by a greengrocer rather than the grocery store itself.

If you're looking to save money here are 5 strategies to reduce your monthly living costs and cut your expenses.

3 – Reduce Your Expenses

While cutting your expenses is the overall goal, sometimes you can achieve your savings goal by simply reducing the expenses you have instead of cutting them completely.

Often we forget or don’t even realize we can reduce our expenses by shopping around, or even just asking for a better deal.

Some areas you can look at to reduce your expenses are:

Check Your Insurances

Insurances are a huge expense for a lot of people, but did you know that while we worry about being underinsured, it’s actually possible to be overinsured too!

Review your insurances and make sure you’re only being covered for what you need, and that you’re not double covered for some things (for example, does your life insurance policy also offer funeral insurance?)

Also, shop around!

Each time your insurance comes up for renewal, be sure to check other options and make sure you’re getting the best deal.

Switching providers can save you hundreds of dollars each year!

Check Your Phone Bill

While you’re checking your providers, also check your cell phone provider and make sure you’re on the best deal.

Often we let our plans lapse without giving them too much thought, but providers come up with new plans and new options regularly and you might be up for a better deal.

I literally halved my cell phone bill each month by switching to a different plan (and it didn’t cost me any money to switch either!).

If you're looking to save money here are 5 strategies to reduce your monthly living costs and cut your expenses.

Negotiate Your Interest On Loans

While home loan interest is at an all-time low at the moment, we might be tempted to put this into the ‘don’t worry about it’ pile, but this can actually work really well for you!

You could save hundreds each month, and thousands over the life of your loan, by simply dropping your interest rate by half a percent.

The best way to do this?


Call your bank and ask them for the best deal.

If you find you’re actually paying more insurance than you should be, and your bank isn’t willing to budge, then be prepared to move banks.

The savings can be worth it in the long run, just be sure to check all costs with leaving your bank and starting a new loan.

Shop For Cheaper Internet Providers

Often we get it into our heads that if a service is more expensive, then they probably offer the best service. This isn’t true at all!

In fact, it can be worth checking Internet providers around your area to see if you can cut some costs.

You might find another service provider in your area that offers a cheaper rate, or even something more tailored to your needs.

Shop For Cheaper Utilities/Discounts On Upfront Payments

Another method for reducing your expenses is to cut the cost of some of your utilities or search for cheaper alternatives.

Many companies help you cut the cost by offering discounts on upfront payments (like gas and electricity), but the catch is that you need to pay in full by a certain date in order to get the discount!

Shop around and see if there’s a company who will reduce their prices in exchange for you paying in advance.

If you're looking to save money here are 5 strategies to reduce your monthly living costs and cut your expenses.

4 – Get On Top Of Your Food Expenses

Even if you aren’t eating fast food every day, grocery bills alone add up fast.

Which means your food expenses are often a fantastic place to find some ways to cut costs.

These are some simple things you can do to help reduce your grocery bill:

Meal Plan

If you’re going to cut your expenses in a major way then meal planning is a must.

Meal plan for the week and then go shopping, or order online and cut out the weekly grocery shop entirely.

I’m not saying you have to cut out eating out completely, or making whatever you want fo dinner, but by meal-planning your meals for the week you’ll cut your expenses dramatically.

One of the first major ways I cut our monthly living costs was by meal-planning.

If you’re serious about reducing your expenses… cut out all non-essentials for the next 4 weeks and see how much money you save!

You’ll be surprised at what you can cut out.

If you're looking to save money here are 5 strategies to reduce your monthly living costs and cut your expenses.

Use Grocery Lists

Not only are grocery lists handy little tools to stop you forgetting the essentials you’ve run out of, but they can also help you save a whole lot of money on grocery expenses.

Print a grocery list template and fill it in throughout the week. Then when you go shopping, STICK TO THE LIST!

Most of the time, just by having the list to go by, you’ll be less likely to wander and buy whatever you see.

Focus on the list and only get what is on it.

This is made even easier when ordering online.

Order Groceries Online

In a similar way to writing a grocery list, ordering online can help you save money too because you only buy what you need and you’re not aimlessly wandering around the store.

It’s also a good idea to avoid grocery shopping when you’re hungry because you know you’re going to buy a whole lot of unnecessary things that hungry you wants.

You can even find some stores will offer discounts and incentives to order groceries online too!

Use Seasonal Produce

This is such a simple cost cutting strategy that is so often overlooked.

When you’re meal planning, eat meals that are based around foods that are in season.

Not only is this going to help you save money, but it’s good for you too!

Better yet, cut out the supermarket completely and pick up your fresh produce at a farm or market!

If you're looking to save money here are 5 strategies to reduce your monthly living costs and cut your expenses.

5 – Monitor Entertainment Costs

To be honest, one of the worst things you can do for your budget is to cut out all entertainment expenses.

Yup, I said it.

Because a budget that doesn’t allow for some fun spending and for entertainment isn’t a budget you’re going to stick to for very long. It would be so boring!

So, instead of cutting it all out to save costs, try this instead:

Budget For Entertainment

Include a set amount in your budget each pay cycle for entertainment.

Be sure to look ahead on your calendar to see if you have any upcoming events so you can budget accordingly, but make sure you allow some money in your budget for FUN!

Including it in your budget also says that you value fun and entertainment, and it makes you more likely to stick to a budget that actually meets your needs.

Stick To A Schedule

Create a ‘friend catch up schedule’ for yourself to avoid overspending on entertainment and being invited out every night of the week!

For example, Tuesdays are my catch up days. I often spend most of this day at the local cafe and I meet my friends there for coffee and cake and chats.

All of my friends and family know that every other day during the week is a work day for me, so they only schedule things in on a Tuesday and they don’t try to arrange catch ups on other days.

This has saved me so much money because, as a massive people pleaser, I found it hard to say no to a cafe or lunch date invite.

Coffee and cake every day, and a lunch here and there really adds up.

If you're looking to save money here are 5 strategies to reduce your monthly living costs and cut your expenses.

Where to From Here

After a month or so of your new reduced monthly living costs, you might want to do another evaluation and just see if there’s anything else you could cut that you may have overlooked.

Often times we are a little more hesitant to cut our expenses in the first go because it’s a hard thing to do and we resist doing it.

Once you’ve been in the groove for a little while and have seen the big difference it can make, you’ll be more inclined to be more ruthless with your cost cutting.

Keep evaluating your expenses every few months so you stay on top of them, and be sure to keep your financial goal in mind as you work towards it.

Good luck!

If you're looking to save money here are 5 strategies to reduce your monthly living costs and cut your expenses.
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