It doesn’t take an economic downturn to motivate us to be more careful with money. Our generation has faced more financial insecurity than any other cohort in U.S. history.
So if you’re looking to tighten up your budget, the first place to start is not with any grand initiative like starting a side hustle or finding a second job — though both certainly have their merits. Rather, first take a look at what you’re already spending each month in your household expenses (monthly costs like groceries, car insurance, rent or mortgage payments, phone bills, etc.).
So if you are in a position of needing to reduce your household expenses, here are some things to consider.
Be smart about groceries
For many families, the monthly grocery bill is often the most daunting — but it’s a necessary expense. You have to eat, and food can be expensive! I’m of the mind that, even when you’re looking to cut costs, you shouldn’t go as cheap as possible when it comes to the food you’re eating.
You deserve to eat well — and by that I mean good, quality, real food. Fresh fruits and vegetables can be expensive but not as expensive as not taking care of your health. Even in the midst of financial stress, your health shouldn’t take a back seat. That said, there are ways to cut grocery bills dramatically:
- Take a close look at what you actually use and consume over the course of each month or week. Is there something you routinely buy that you don’t end up using, or that you could go without for a few months? Make sure you’re actually using everything you buy instead of just habitually adding it to your list. And if you aren’t using it, don’t keep buying it.
- Buy real food. Packaged or processed food might be easy, but in the long run it’s often more expensive. Replace a bag of frozen broccoli with a head of fresh broccoli for half the price. It might seem like a small change, but small changes like that applied to your entire grocery bill over the course of several weeks can add up.
- In addition, buying in bulk, shopping around for the best prices, and buying fruits and vegetables at local farmers markets or fruit stands can also offer opportunities for quality food at more manageable prices.
Be moderate about eating out
If you really want or need to cut expenses, cutting back on eating out is an easy way to add money to your budget every week and every month. Eating out is fun and convenient at the time, but it can really suck the life out of your checking account quickly if you aren’t moderate about it.
- Often we eat out because we’re bored with eating at home. Look up new recipes to keep things interesting while also avoiding spending twice as much on take-out.
- Even though it’s only a few dollars at a time, buying specialty drinks can add up after a while. Make coffee at home, find some smoothie recipes you can try on your own, and buy cans or bottles of soda instead of stopping to buy them while you’re out running errands.
- If time is an issue, use the weekends for meal prepping for the week so you aren’t tempted to swing by a drive-thru on your way home from work.
You know your financial situation best, so if you feel eating out occasionally is still feasible given your budget, then do it! You don’t have to completely eliminate the occasional dinner out or a coffee-to-go every once in a while, but set limits and boundaries on eating out so you know what you’re spending and don’t go over that limit.
Eliminate unused or unnecessary subscriptions and membership
Monthly subscriptions like Netflix, Hulu, and Disney Plus may require what seems like just a small monthly fee, but having half a dozen of those “small monthly fees” can add up over time. And it’s amazing how many of these subscriptions and memberships we can collect without really getting our money’s worth out of any of them.
- Go through your monthly bank statements and look at each subscription or membership that you’re being charged for with a critical eye. Which ones are you actually using frequently? Which ones could you do without?
Especially consider cancelling memberships for services you might be able to meet in other ways, such as gyms. There are many options for staying physically fit without paying a trainer or having access to specialized equipment. You might even think about investing in a one-time purchase of an app that could carry you through a season of workouts.
Reevaluate your sources of entertainment
A tight budget may have already forced you to take a closer look at where you find recreation and how you entertain yourself. But it’s worth considering if you have any sources of entertainment or recreation that you aren’t using or taking full advantage of. This is similar to the point about memberships, but also requires you to take a closer look at how you can still have a creative outlet without breaking the bank.
- Consider if you’re paying for memberships, club dues, or online programs that fall under the “recreation” or “hobby” category. If you use these and benefit from them, great — but be real about how much time you have to devote to all of the “extra” things you’re charged for each month.
- Lean in to the free hobbies you may have picked up during the last few months of staying at home (baking? bird watching? hiking?). Free or low cost hobbies can be just as fulfilling as ones that require a monthly investment.
Even if you need to drastically cut household expenses, don’t leave yourself without any creative outlet or hobbies. We need hobbies and recreation to flourish -- but if you have a hobby that requires a monthly expense, be intentional and realistic about how much you can afford to pay for it.
Compare prices for monthly expenses
There are, inevitably, certain expenses that you can’t get away from, no matter what — like car insurance, car payments, phone bills, Internet/Wifi, etc. It’s sometimes worth shopping around to see if you could get a better rate for any of these monthly services.
List out your monthly bills that you could potentially find better deals on without too much inconvenience. For example, finding a better payment rate for your rent or mortgage would take significantly more effort than finding a lower payment for your car insurance, cell phone bill, or Internet/Wifi, so focus on the manageable things. You may find that you already have a decent rate compared to other competitors, or in some cases you may realize you could save a substantial amount each month just by switching service providers.
Know where your money is going
Going through your household expenses with a fine-toothed comb can help you zero in on what you want to keep and what needs to go, and what you could potentially pay less for. At the very least, it will help you grow in knowledge of where your money is going, helping you to be mindful of your expenses, and hopefully helping you save some money each month, too.
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