There are times in life where you are forced to get really serious about cutting your budget. That time was a few years back for me when my company at the time unexpectedly went belly up. A global firm in 24 countries that I invested many years in went bankrupt in a very short time span, which left every one of us with a week notice and no job.
At the time, I was in disbelief. I couldn’t believe this was happening. I felt a range of emotions about it, knowing that I had 3 young children at home that needed me to have a job and I didn’t have one any longer. I had a mortgage to pay for and a car payment, plus there needed to be food put on the table.
Now thankfully I started my first day at another company within a fairly short period of time so it could have been much worst, but at the time I thought the world was caving in on me. I had to make a decision right there and then to either get back up and dust myself off or let life take me down the drain.
So we got real serious about cutting our budget immediately… Here are some ideas to drastically cut your budget and get serious about becoming financial free.
Cut our cell phone
We pay approximately $250 a month now for our mobile phones. We actually have 4 phones, one for our 16 year old son and one for our 12 year old daughter.
Now some people may want to cut off their left arm before giving up their phone number, but most people will do just fine without one. Not so long ago, people didn’t even have such a thing and we all got around just fine.
Move into a smaller home
Unless your one of those people living in a tiny home, there is a chance that even you may be living in a home that may be bigger than you really need to live.
You have to ask yourself is that extra few rooms in your house worth the mortgage and expenses you have? Or, would that money be better spent somewhere else in your life?
It’s just not your mortgage that you would save by moving into another house, right? The mortgage is one piece, the real estate taxes are another.
If you are moving into a smaller house, chances are you will use less electricity to keep the house cool in the summer and less gas in the winter keeping the house warm.
Savings: Could be thousands a year!
Move in a Roommate
If you don’t want to move into a smaller home, then maybe you can move someone into your home to take up that space your not using.
The beautiful part of this, is that they can help you pay some of that mortgage, real estate taxes, electricity, gas, water, trash, etc..
If you are living by yourself and you move in a roommate, you could very well just split those expenses right down the middle and now you have just got yourself out of your budget issues.
If you want to rent out a room in your home, you could try Airbnb as an option. There are people who just rent out a portion of their home and make some extra cash in doing so.
Savings: Could be half your household expenses!
Over time, I seem to accumulate reoccurring memberships. Whether that is Netflix, Hulu, Disney + or that gym membership that ends up not being used as much as it should, there is opportunity to scour your expenses for these reoccurring expenses that are not necessarily needed.
The best and quickest way to find some of these memberships you may have forgotten about is you go through each line of your bank statements over the last month to see which of these memberships are still active out there.
$10 a month here or $20 a month there doesn’t seem like much, but when you add them all together as a sum and for the year, it starts to add up!
Savings: Could be hundreds of dollars a year!
Stop Going Out To Eat
It’s always a pleasure to take the family out to a nice restaurant to have a dinner, but restaurants can get expensive. It’s not always the healthiest of options depending on what you eat as well.
If you make a firm commitment to not step into another restaurant until your expenses are in order, if you go out often, this could be a great way to reduce your expenses.
Every January, we call this our hibernation mode, where we stop going out to places on weekends and serious reduce our spend by just staying home and spending time with the family. It not only saves us money, but we also are not running around like crazy, giving us time to recharge and relax.
Stop Spending Money On Entertainment
Who said you had to drop some cash to have fun and enjoy this world we live in? There are so many things to do to have fun that are also free!
I wrote a post some time ago, listing out over 50 ways to have fun on the weekend without spending a dime on the fun.
Check out those ideas because there is a lot to do in this world, that actually doesn’t cost any money at all.
Cancel You Cable Bill
With the onslaught of internet based entertainment options, many of free are free, many people have taken the plunge and fully cut off their cable from their house, saving them potentially thousands every year.
Our cable bill for just the TV portion of it, is around $150 a month. Multiple $150 a month times 12 months and you get a lot of money! $1,800 to be exact!
If you really need to have your TV fix, you can purchase a digital antenna and receive digital TV over the air for free. YouTube is free! There are many options online that are completely free.
Cut Your Food Bill
Well, you have to ear right? It’s one of those basic necessities to have food and water to keep you going. We are not suggesting cutting out your food, however there are many many tricks to reduce your spend each week/month.
Coupons are your first line of defense. Many grocery stores are offering digital coupons that you can just simply clip off of their web site. Otherwise, there are still plenty of newspaper and mail flyers that show up that have coupons stashed inside.
If coupons are not your thing, then look around your town for a discount grocery store. For example, in our town we have a Giant Eagle, Acme and a Heinen’s. These are your average run of the mill super markets where they pretty much have everything your heart desires, however their convenience and selection also comes at a cost.
I have come to find that if we were to shop at either Aldi or Marc’s (Discount grocery stores near us), then we would save on average of $100 per week.
The reason for this comes in 2 forms. #1) The food is remarkably less expensive at these discount grocers. #2) These discount grocers just have less frills and I find myself only getting what I need in these stores rather than running into things that I may not need.
One last tip, because I love tips! I have found that if I order my groceries online, I buy less groceries. This phenomenon happens because when I go shopping online for groceries, I ONLY get what I am looking for. When I go into the grocery store, I am bombarded with all these other options and it inflates the grocery bill.
Sell Your Car Or Down Size
I have known so many people who are locked into new car loans and that ruthless monthly car payment that just keeps coming each month.
If you are looking to cut your expenses, you may consider selling your car and getting into something that just has the basics to get you to and from where you need to go.
You may also consider using public transportation. This can save you thousands of dollars over the time you would have been paying a car loan.
Buy Used Items Instead Of New
Chances are there are stores in your area that offer used merchandise. We have a Goodwill in our town, and the neighboring city over also has several used furniture stores.
If your serious about cutting expenses, then you may consider checking one of these places out rather than spending a higher dollar amount on brand new items. There is a lot of life still left in these items, and you can get them at a steal.
You may want to check out sites like Craigslist or Freecycle, as these are both options for locating people who are giving away perfectly good items for Free. They do this because people would rather see an item continue to be used rather than it ending up in the landfill. Check it out.