So I am a big fan of cutting your monthly expenses. Not only to save more money each month, but because cutting expenses is a great way to start living your best life. You get to remove excess crap from your budget and focus on what matters to you financially.
A lot of times, we are just going through the motions and may feel out of control with our finances. But that doesn’t have to be the case and it shouldn’t be either.
What are monthly expenses?
Monthly expenses are exactly as they sound. Expenses represents the money that leaves your banking account each month to either pay for a bill, activity, or experience. We all have monthly expenses, some more than others.
Which is why it’s great to take a moment to see where you can cut down on how much you’re spending each month.
If you have too many monthly expenses, you can literally eat up a good portion of your income. This means less money to do the things you actually want to do, or have to do! I think the best way to avoid this is to drastically cut expenses where you can so you can free up more money quickly.
What are some of the benefits of cutting your monthly expenses?
- You can retire earlier–you can stop working earlier, if that’s what you want, because you will have more money on hand to fund your lifestyle!
- Have excess cash for emergencies–as sucky as it may be, things come up in life and it’s always better to be over prepared than under prepared.
- Help grow your family–many of us someday want to get married, have kids, or do both. The extra cash can go a long way if you plan on expanding your family one day.
- Peace of mind–cutting down expenses means you have more cash in your account. That can be mentally stimulating to know you are financially okay at all times.
- Live the life you want–more money for the most part means more opportunities. Wouldn’t it be nice if you could live the life you want and not just live what you feel is the status quo?
These are just a few benefits of cutting expenses but the benefits are truly endless. Drastically cutting your monthly expenses means you have more cash that you can divert to what’s important to you, whatever that may be.
So here are 15 ways you can drastically cut your monthly expenses starting with…
Find Cheaper Living
This one may not be possible for every one’s circumstance, but I think it’s an important expense to consider. If you are paying an arm and leg for your housing, you may be shooting yourself in the foot financially.
Try to make sure that your rent or mortgage is not taking up all of your monthly income. What I mean by this is, you should try to follow the rule of thumb to not spend more than 30% of your gross income on rent.
Not sure what your gross income is? Gross income is your income before taxes and other deductions come out. If your salary is $36,000 a year, than your monthly gross income is $3,000 (36,000 divided by 12 months).
So if you make $3,000 a month, you should aim to not spend more than $900 a month on rent (3,000 multiplied by 30% or 0.03). This is just a rule of thumb but I think it helps provide a baseline for how much you should spend each month.
If you can, check to see if there are cheaper living options in your area and see if it makes more sense to downsize to save the extra cash. Sometimes you can find similar housing with similar luxuries for a fraction of the cost!
Related Post: 10 Clever Tips to Live Below Your Means
Phone Bill
Phone bills can be so pricey these days and I absolutely hate it! I think we sometimes get caught up on having certain phones and features, that it can all eventually be too much. That’s why it’s important to shop around and make sure you are paying a good price for the features or functionality you need, not want.
I know for me, I needed to have unlimited phone calls, text messaging and data. I also wanted a carrier with good coverage so my go to as an adult was Verizon Wireless. Not the smartest decision, let me tell you.
With the above features I wanted, and phone insurance, I was paying roughly $110 per month. And this was higher when I was paying off my cell phone smh!
But after some convincing by my boyfriend, I switched to Google Fi which has a base price of $20 per month plus $10 per 1 GB of data. And data maxes at 6GB, which means the bill can never be more than $80.
So even if I have a crazy month, my bill on Google Fi will never be as high as my Verizon bill. (I also barely use a 1 GB of data as I work from home so my bill is usually between $30-40.
This means that in one year I will save WELL over $700 by just switching providers. Which is crazy!
My point is to see what’s out there. You may be sticking with carriers or providers that really mess up your budget for no real benefit. Even consider talking to your current provider and see if they will lower their price to keep your business. You’ll be surprised that a lot of them will!
Dining Out
You don’t need to dine out all the time to eat good or even maintain a healthy lifestyle!
Stick to making most of your meals at home and you will be able to save a lot of money each month. This also gives you an opportunity to get creative with new recipes and food groups.
According to Money Under 30, U.S. households spend $3,000 a year on dining out. That is the equivalent to roughly $250 a month on dining out. That is a lot of money on dining out!
Instead, focus on buying groceries and make your meals at home. Save the extra cash and use it for something more important instead!
Get Rid of Car Note
If you have a car note or car payment, it may be beneficial to get rid of it. Big emphases on MAY, because everyone’s situation is very unique!
But if you are considering it, the best way to do this is to pay off the loan itself or sell it for an amount that is more than what you owe on the loan.
If you still absolutely need a car, and have the savings to permit, you can purchase a car outright. Which means no car payment and usually a cheaper car insurance option. Both of which is definitely something to think about.
This is also a great option if you can share the driving with another adult in your household. Sharing a car can drastically cut your monthly expenses with reduces insurance, gas/ maintenance, and of course auto loan payments.
Now, if you have to use a car to get to work (living in a place with minimal or unreliable transportation), then this may not work for you.
If that is the case, try lowering your car insurance to see if that can help you cut down your monthly expense. You can also use your car as little as you can to save on gas and overall car maintenance. Anything helps right?
Pay Off Credit Cards In Full Every Month
This one is a no-brainer! Leaving a balance on your credit cards each month is a very quick way to increasing your debt load in general. Plus, the interest on credit cards are usually very high and can make it harder to pay off in the long run.
If you are struggling to pay off the full balance each month, trying be aware of why that is. Are you overspending on your cards where your income isn’t enough to cover the monthly balance? Are you charging items to your cards you simply cannot afford?
Every person’s situation is different but be real with yourself and make adjustments so you can pay off your balances! This one monthly expense you really do not want.
Also consider creating a budget that doesn’t allow you to spend a lot on your credit cards. Not sure how? Click here to learn how to create a budget, which is perfect for beginners.
Cut Cable
Cable is completely unnecessary in 2021, let me tell you! Most people these days subscribe to streaming services which offer the same, if not similar shows and movies.
Save yourself the monthly expense by cutting cable entirely (outside of internet) and use streaming services instead.
NOTE: Don’t sign up for a million streaming services! I know a lot of people who did this and winded up paying the exact amount they would if they had just stuck with cable. Defeating the whole purpose!
Instead, pick the streaming services that offers you the most shows you already watch, or would engage with. For our household, Netflix & Hulu does the trick.
Also remember, you spend very little time watching television when you put into perspective how much time you spend working, sleeping, eating and simply having a life. You don’t need an expense in the background eating up your pockets just because.
Cancel Gym Membership
I myself used to be a big gym junkie. I absolutely loved going to the gym and feeling the energy of other people trying to get fit too. It was inspiring and darn right, motivating.
However, the expense is not worth it in the long run unless you are an Olympian, which most of us are not.
Especially during the pandemic, we have all had to get used to or somewhat comfortable with working out at home. It has forced us to re-evaluate what matters and where our time and money is really going.
So instead of paying for a gym membership, invest in a few must have supplies and try working out at home. Below is a list of a few items we have purchased for our house that has made the transition almost seamless:
You can also opt to workout outdoors if your location permits! I live in in San Diego so I can run nearly all year round. It’s also a great place to hike and go on long walks. That plus the added purchases above have made working out at home lowkey a breeze!
Stop Drinking & Smoking
I know I’m a little biased since I’ve recently started my own sober living journey, but this honestly is still a great expense to reduce or completely cut.
I had always a miscellaneous part of my budget which including having drinks and being able to smoke. But after some serious reflection, I realized I was spending more money than I should on “having fun”. Like why in the world was my “fun” habit so darn expensive?!
Full transparency here; at the height of my drinking/ smoking fun, for a lack of better words, I was spending at least $150 a month on alcohol, weed, and roll ups (which was for me and my boyfriend).
After about a year of smoking consistently and drinking for years, I was over it, haha. I learned that I needed to readjust my attitude about smoking and drinking altogether and also get realistic about the money I was spending.
Having fun or things you in your life you simply enjoy is cool. Hell I recommend having something you like to do. But I realized this doesn’t always have to come with a big price tag.
So try to cut back on extracurricular activities like drinking for a month or two. Just try it out and you’ll see how much extra cash you have. Trust me it’s usually quite amazing!
Stop Stressful Shopping
Overspending is one way to truly ruin any budget you have. Especially if you are simply spending due to a shift in your feelings or emotions.
Your feelings and emotions are valid, but doesn’t mean you have to spend money, especially a lot of it, to cope.
Your monthly expenses shouldn’t include splurges or purchases that either you cannot afford, or simply don’t need. As much as it may feel like it, buying something outside of our budget every month, will not help you feel better or resolve whatever issue you have.
And trust me, I’ve been there. Sometimes I have to check myself and realize I’m just spending as an outlet whether that is buying food or running stuff. Either way, it is not the wave!
Instead try to practice mindful shopping, where you only purchase what you need. Don’t let shopping be a mental or emotional outlet for you and instead cut the expense altogether.
Don’t Buy Gifts
I love gifting people in my life! It’s so fun to find thoughtful things they may need or want and being able to give. But I’ve had to slow down, seriously. It can become a costly habit to have to consistently give gifts for everyone and everything.
And it sound insensitive, but I’m all about making smarter decisions with my money these days. I need to stay on track with my expenses if I want to hit certain financial goals and that’s just reality.
This means that I cannot buy gifts for everything and everyone. I’ve had to learn to pick and choose what makes sense for me financially. Because no gift is worth risking or damaging my financial position.
Instead of always running to purchase a gift for someone, offer them an experience or simply say you can’t buy a gift at that time. People will appreciate your honesty and those who care about you, really don’t care about a gift anyway.
Cut Out Beauty Monthly Expenses
I know I like to look good, but I also learned that that doesn’t have to come with a huge price tag. And definitely not one that will ruin or put a damper on my monthly budget!
Most women, me included, like to get our nails and hair done which is nice but it’s not necessary all the time.
Cut back on your beauty expenses by doing your hair and nails at home. And with the rise of beauty videos on YouTube for all types of women, you usually can find tutorials to do what you need for a fraction of the cost. Hello technology!
Also, slow down on purchasing makeup or skin products every month. I know it’s hard to do so in a climate that makes us feel like we need to try everything, but I’m telling you don’t!
Don’t let your makeup habit break the bank. Stick with a few good pieces of makeup as your go-to and only buy when it makes sense.
Make Your Own Coffee
I love me a good coffee from Starbucks, especially the Peppermint Mocha that is so cozy to have in the mornings . So much so, that I would buy it every day even when I didn’t need it. I just craved the taste.
But my boyfriend gave me a reality check quick! He reminded me that we could easily make a very similar coffee, if not the same thing, at home without the added expense. I’m talking about $5 a day (yes, I’m not doing the math here on purpose haha!)
And it took some time for me to warm up to the idea because I didn’t think I would like coffee at home (I don’t like my coffee to actually taste like coffee LOL). But over time, and a few adjustments, I could have good coffee at home.
So try making your coffee at home instead of buying out and invest in a tumbler if you need to drink it on the go. Both will save you so much money each month.
Subscription Boxes
There are so many subscription boxes out there that it truly makes my head spin! There is pretty much a box for everything. Trying new wine, fitness apparel, even ones for expecting mothers. And while they are super cute, they are unnecessary.
Most of the subscription boxes carry a reoccurring charge which means yet another monthly expense. Instead of spending money there, you can pocket the cash and use it elsewhere.
It sounds fun in theory, but for the most part it’s never that worth it in the long run financially.
Plus like I mentioned before, there are probably other things you want to do with your cash. Save money here and cut out the monthly expense once and for all!
Now You’re On Your Well On Your Way!
So these are the monthly expenses you can drastically cut to keep more money in your pockets. It may feel like a lot all at once, so I think it’s best to take it one expense at a time. Don’t overwhelm yourself if this feels like too much, too soon!
I think the end goal is to get more mindful of what your monthly expenses are and what you can do to minimize them. You deserve to live your best life, and that includes your financial life too!
What expense are you going to cut out immediately next month?!
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