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.
Think about it. $5/day x 7 days/week = $35/week. My truck costs me $75-80 a fill up. So, two weeks of $5 coffees almost gives me a full tank of gas. Granted, you probably don't have a gas hog truck, like me. But, your car probably takes $30 – $40 to fill it up, on average.
Cutting household expenses and adjusting to a new budget doesn’t have to be too uncomfortable. Once you really look at your budget, you'll start to see things that are so easy to adjust out you'll never miss them. If you don't have a budget, here's a starter monthly budget sheet for you. Let’s talk about easy ways to make some simple financial changes for long-term success.
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Conduct an 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. My favorite color is orange, so I use orange for income. You can pick whatever colors you prefer.
Next, go through all of the unnecessary expenses and figure out which ones will be the least painful to cut. Do you really need Sirius in your vehicles? Or maybe that subscription box that you don't open half the time can go first. Make a list of which expenses you will cut first, second, third, and so on. You can do this in phases so it’s not a huge change all at once.
If you have big leaks in your budget and are drowning in debt, you should take this process more seriously and cut expenses as much as possible right away. It may seem like an overwhelming task, but it will be a huge relief in the end.
Patch the leaks.
Rather than quitting everything cold turkey and cutting out all of your expenses at once (which isn’t realistic in the long-term), make small changes to “patch the leaks”, so to speak. Any money that’s unaccounted for month to month is a leak. Any money that goes to fast food unnecessarily is a leak.
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. We use Netflix and YouTube TV in our house.
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. Don't rule out prepaid cell phone companies, either. Sometimes, you can get the same service for a fraction of the cost by switching to prepaid. Many times you can still use the same phone when you switch, as well.
Watch your food expenses.
Even if you aren’t eating fast food every day, grocery bills 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! This is a huge advantage because how many times have you gone to the store for a few things and left with a cart full?
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 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.
Don't forget about subscriptions
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. A budget won't truly work unless you include every single thing! Once you start doing this one simple thing, the rest falls into place rather seamlessly!
The next steps…
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!
Check out these great tools to help you keep track of your finances and lay your budget/bills out in front of you.