How to Drastically Cut Household Expenses to Save More Money

Budgeting for your household isn’t an easy task, especially if you have kids. Trimming the expenses down to save some money is challenging, but not impossible. If you notice that your expenses are bigger than your income, you must know how to drastically cut household expenses. So how can you spend less without compromising your family’s quality of life? Here are some of our suggestions:

How to Drastically Cut Household Expenses

1.     Cut subscriptions you don’t need

Many of us are guilty of having multiple subscriptions we barely use. Review your streaming, monthly boxes, magazines, and online subscriptions. If you already have Netflix, maybe it’s time to cut your Hulu subscription or vice versa.

Also, monthly boxes are nothing but vanity. Most of us can live without it, the same with tons of magazine issues each month.

In choosing which to let go, ask your self three questions:

*Why do I need this?
*Is there a cheaper alternative I can use?
*Can I survive 30 days without using it?

Letting go of some of your subscriptions can help you save as much as $40 a month. In a year, that’s equivalent to $480. That’s equivalent to a month’s worth of groceries for a family of three according to the USDA Thrifty Food Plan.

2.     Cut back on eat-outs

Next, assess how often you eat out. Do you eat out with your family several times a week? Is eating out your daily meal plan? According to a Harvard Business Review, a U.S. household will spend an average of $3,008 per year on eat-outs. Also, experts found that only 10% of American households love cooking their own food.

Let’s put things into perspective. Say you’re eating out every lunch at work. You’ll spend $10 on your meal during an eat-out, which is equivalent to roughly $2,500 a year. However, if you cook your own meals, you’ll get to save almost half of this cost.

Cooking your own food at home is more practical and allows you to have a variety. However, it’s only possible if you’ll love cooking like you mean it.

3.     Don’t spend a lot just to have fun

After a tiring week of working, many of us reward ourselves with an expensive lunch or a Friday night out. Sure, it’s a great way to have fun, but you’ll end up regretting spending $300 on one night.

We recommend looking for inexpensive or even free means of entertainment. If you want to drink, buy some beer and enjoy it at home. This way, you’ll be saved from the temptation of buying more alcoholic drinks you can’t afford.

Also, involving your family on your choice of entertainment will help reduce more costs. Have a movie party at home instead of going to the cinema. You can also visit museums during weekends or bake goodies at home. 

4.     Use your appliances wisely

Electricity is one of the largest expenses we pay each month. And if you have dozens of appliances at home, you’ll have to shoulder large amounts every time. Still, it doesn’t mean that you’re going to ditch some of your appliances; you just have to use it right.

Start with your AC. Install a programmable thermostat that turns the AC on and off during specific hours of the day. So even if you forgot to turn it off manually, a thermostat would do it for you.

Next, place a kitchen hood or any form of ventilation in the kitchen. This way, your AC won’t have to compensate due to the trapped heat inside your house.

You can also lower the temperature of your heater, reduce TV time, and air dry instead of using the dryer of your washing machine.

5.     Use LED bulbs

LED bulbs make a big difference in your energy consumption, both directly and indirectly. LED bulbs can produce the same luminosity of a fluorescent lamp for half the wattage. Also, LED bulbs are 90% more efficient than traditional incandescent bulbs.

Aside from that, LED bulbs last longer. We use LED bulbs all over the house. It’s been two years, and none of it needs replacements so far.

6.     Cut your cable connection

An average cable bill is around $120 a month. This is a lot of money, especially if you’re not really using it every day. If you’re currently short in budget or in debt, there’s no justification for keeping your cable subscription. You can always catch some free TV or stream free content online. If you really want to know how to drastically cut household expenses, your cable must go.

Aside from the money you’ll lose from paying cable monthly, you’re also wasting time watching TV. People with cable spend around 35 hours watching TV per week. These hours could have been spent on more productive things like side hustles or household chores.

If you can’t give up watching altogether, you can always look for cheaper or free alternatives. If you have an internet connection, YouTube comes free. Netflix is also much cheaper for $12 a month.

7.     Buy some items in bulk

If you’re grocery shopping for the whole family, you’ll save more money if you buy things in bulk. Take note that this is only applicable to non-perishable items. Also, you should only buy items in bulk if you’re using it a lot.

You should buy the following in bulk: diapers, toiletries, soap, shampoo, trash bags, coffee, toothpaste, bottled water, and detergent. If your family loves rice, purchase it in large packets, or even sacks if possible.

Since you’re buying at a wholesale price, you’ll get to save more to buy more.

You should avoid buying things in bulk if it spoils fast. Some of the things you SHOULD NOT buy in bulk are milk, cereals, flour, sandwich spread, seasonings, and cleaning products.

8.     Buy generic if possible

Many of us have been used to buying branded items, thinking that it’s much better than generic ones. But truth be told, many of these items have the same quality, but happened to be sold in different names.

So as much as possible, consider buying generic. It will save you a lot of money without compromising quality. Always check the ingredients and label of the generic product to guarantee its freshness and overall value.

We recommend buying one generic product then trying it out. If you like it, you can switch to it for good.  If it didn’t pass your standards, it’s best to stick to the branded ones you’re buying. Knowing how to drastically cut household expenses also includes experimenting and exploring other options.

9.     Don’t buy new clothes you don’t need

Shopaholics beware! Your habit of buying new clothes will take its toll on your monthly household budget. Sure, buying a new shirt is fine, but if you’re paying for that fur jacket out of the blue, you must re-assess your priorities.

We’ve met people who will spend hundreds of dollars on clothes then end up short for the food budget. If you don’t need the clothes at work or school, just cut the expense and allot the money on more important things.

Aside from clothes, watch out for your grooming expenses. Cut back on your spa visits as well as your salon treatments. If you want a new nail color, you can paint them on your own at home.  

10.  Avoid lifestyle creep

Lifestyle creep is also known as ‘lifestyle inflation’. This happens when your expenses increase as your income rises. One of the tell-tale signs of lifestyle creep is a sudden change in spending behavior, including buying non-essential items.

Lifestyle creep is often hidden in “you deserve it” excuses. In the long run, you only break even with your income, and you fail to save money.

To prevent lifestyle creep, you have to stick to a specific household budget. While it’s okay to purchase new appliances or furniture, it shouldn’t be a monthly thing.

Always set a budget, regardless of how big your salary is. This way, you’ll have a better picture of how much you’re saving and how much goes to your monthly expenses. 

11.  Don’t write checks you can’t cash

This is a popular line and very relatable if you want to know how to drastically cut household expenses.

Many people commit to expenses even before they get their salary. Worse, some would sign up to an expense they know they can’t afford. This will lead to indebtedness, which will defeat your efforts to cut costs on your monthly household expenses.

Don’t say yes to an expense unless you know you can pay for it without going into debt. For example, if someone offered you a new insurance policy, you’re not compelled to say yes if it will put your household budget in jeopardy.

12.  Don’t upgrade your phone out of vanity

Here’s one thing many of us are so guilty about: upgrading our phones when a new model comes out. This more of a want than a need. A new phone will tie you to a new financial contract, which, for some, will take years. Even if an upgrade comes with a free phone, you’re not saving anything. The truth is that you’re actually paying for the new handset on your contract.

Aside from that, review your phone plan. You can switch to a cheaper option if you’re not really consuming all the inclusions of your current plan. Slashing your phone bill by a couple of gigabytes a month can accumulate to up to $100 a year. This is already a substantial amount.

13.  Practice the 30-day rule

If you’re craving for something, practice the 30-day rule. It’s a 30-day wait before you give in to your wants. These days intend to help you think if you really need that thing you want to spend on. More often than not, you’ll not purchase the said item after 30 days if you don’t really need it.

This rule will help you differentiate wants from needs. In the long run, this will help you save hundreds of dollars a month. You can also impose this rule on your kids.

Discipline is needed on how to drastically cut household expenses, but it will always pay off in the end.

14.  Plan budget-friendly vacations

Cutting down on household expenses doesn’t mean you’re going to ditch your family’s yearly vacation. What you have to do is to budget the trip properly. Avoid expensive hotels and recreational activities. Public beaches are money-savers, and you’ll still get to enjoy by going off-season.

You can also plan a tour around your destination, so you no longer have to hire a tour guide. Bringing your own car, if possible, is also a big money-saver.

Also, you should take advantage of seat sales, limited offer tour packages, and discounted offers. If you’re bringing your kids, think of ways to keep them busy without costing too much money.

15.  Use your credit card wisely

Last but not the least, use your credit card wisely. Many of us give in to wants because we don’t spend actual cash when paying with a credit card. And with every swipe, you’re losing more money.

Sure, the credit card provider has a reward system, but it doesn’t erase the fact that you spend on non-priority things. Again, spend only on what you can afford.

Also, pay your credit card bills on time to prevent penalties. If possible, pay the monthly due in full to avoid interest rates.

Most importantly, your credit card should be for emergency purposes only. And if you are still to open a credit card, look for an offer with the lowest interest rates.

Final words

There are many ways on how to drastically cut household expenses. You just have to observe discipline and to re-assess your priorities. Although you’d have to let go of some things, it will surely save you a large sum. The money you’ll save from this can be allotted to more important things. It could be a better vacation, your kid’s college, or a new house. Remember that a small saving is a saving nonetheless.