Are you fed up with being broke? Have you ever run out of money before the month was over? Are you ready to say, “I’ve had enough!” and do whatever’s possible to get back on track with your finances again? If this is where you’re at, then I can definitely help you save some money each month. Not only that, but I can likely help you cut your spending in half. That’s right, in half. Follow these ten tips and get your life back again. No more stress, no more anxiety, just money in the bank and serenity.
10 Extreme Tips to Cut Your Spending in Half
The typical U.S. citizen spends nearly 60% of their income in just three categories: housing, transportation, and food. To cut your spending in half, it’s imperative to tackle these three areas of your expenditures.
1) Downsize Your House
Let’s face it. Out of all the expenses each month, the costs of putting a roof over your head uses up the majority of your dollars. In fact, housing costs often account for more than 30% of the monthly expenses, if not more! If you truly want to cut your spending in half, then you have to start with your domicile. No matter what situation you’re in, downsizing your square footage will almost certainly save you money each month.
In my area, downsizing from a 3-bedroom house to a 2-bedroom house can easily drop your expenses by a third (and even more when you consider the reduced insurance and property tax costs). If you currently rent, find an above-the-garage apartment instead of your 2 bedroom duplex unit. It’s not rocket science, and it’s certainly not ideal, but it’s a sure-fire way to reduce your expenses by a large margin.
2) Get Rid of Your Car Payments
No matter how you look at it, car payments are just idiotic. By making car payments, you’re:
- losing money in interest
- paying more in insurance because full coverage is required
- minimizing your cash flow for 5 years or more
- losing more money in depreciation because you bought more car than what’s necessary
No matter if you lease or if you buy with payments, you’re spending too much of your money in this area. If you want to cut your spending in half, then I would recommend selling your vehicle and buying a dependable $3,000 car that will last you a couple of years while you work yourself out of your financial mess. If you owe more than your car is worth, then simply explain your situation to the bank and get a small loan for the difference and work to pay it off immediately. Want to cut your spending in half? Then get rid of those car payments!
3) Cut Out Restaurants Completely
If I make eggs and pancakes at home, it costs me about $0.15 per egg, and another $0.20 for the batter. In total, my breakfast expense is approximately $0.50. If I order this exact meal at Denny’s or Bob Evan’s, I’ll pay roughly $4.00. Eating out is costing me 8 times as much! And for what? The opportunity to shovel food into my face in front of a bunch of strangers? To save myself 10 minute’s worth of time in front of the stove? We all need to stop being so lazy and just cook all our meals for ourselves. It could easily save you hundreds of dollars per month, and you’ll probably be healthier for it too!
Related Article: How to Feed a Family for $400 a Month
After my divorce a few years back, I was faced with paying my ex over $21,000 in six months’ time. The feat was nearly impossible, but by cutting out every single necessary expense, working odd jobs, and by selling just about everything I owned, I was able to pay off every single penny on time. At the point of that last payment, I owned a mattress and a dining room table with chairs. That was about it. The rest of the house was empty.
It sounds extreme, but you know what? I had a place to sit and eat, and a place to sleep. That’s truly all that’s necessary. A plush couch, a television, and decoration on the walls – you don’t need it, especially if you seriously want to cut your expenses in half. Sell almost everything and put the money in the bank immediately (you’ll need it for some of these other 10 tips).
5) Cut Your Cable
This tip sounds cliche, but you’d be surprised how many people act like they want to get out of debt and control their spending, and then they make excuses as to why they still need their cable – stuff like:
- “It would cost me more to go see a couple movies a week, so cable is saving me money.”
- “I just switched from premium cable to basic, which saved me $30 a month so I already made a sacrifice.”
- “We have so many shows saved on the DVR, we don’t want to lose them all.”
By now I shouldn’t be surprised, but my jaw still drops at each one of these ridiculous excuses. If you really want to cut your spending in half, call your cable company and tell them boldly that you don’t want them any more. Then buy a $35 Chromecast stick and subscribe to Netflix. Instead of paying over $100 a month for TV, this will enable you to watch thousands of shows for less than $10 a month.
Have we cut your spending in half yet? I bet we’re getting close!
Sixty-four percent of Americans currently own a smart phone, and most of them are paying $60 or more each month for the service. This simple piece of technology is costing them over $700 a year and everyone thinks they can’t live without it. Not true.
Think about it. What do you use your smartphone for?
- Stalking all of your friends on Facebook
- Tweeting senseless thoughts in 140 characters or less
- and, of course, playing games
Your smartphone is a $60 a month toy that you could really do without. If you use your phone for GPS, print yourself some directions before you leave. Or, crazy thought, learn how to read a map. And, for those of you that are worried about breaking down on the highway, use your dumb phone to call for help. It’ll save you at least $50 a month.
Renovation is expensive. Redo a bathroom and plan to spend more than $5,000. If you want to update your kitchen, you can expect to pay $20,000 (and sometimes upwards of $50,000!). But, guess what most of this expense is? Labor. At $50+ per hour, most of your money isn’t going into the new counter-tops or even the appliances. Nope, it’s going straight into the pockets of the contractors.
The same is true for repair as well. Car repair, plumbing fixes, and even window replacements (my latest home project) – typically 70% of your payment is for the luxury of the labor. While some of us may be timid to try some of these things ourselves, much of it really isn’t all that complicated and can actually be learned via a 10-minute “How to” clip on YouTube. By replacing my windows with my own two hands, I have officially saved myself $5,000. Want to cut your spending in half? Some consistent DIYing can easily save you thousands of dollars each year.
8) Ditch Italy for Iowa
The purpose of vacation is to unwind and relax – to leave the stresses of work and of life in general and simply escape it all. Nobody said that a vacation has to be a lavish trip half-way around the world! In fact, some of the most enjoyable vacations are staycations – where you take off from work and just stay at home. You can spend the first day catching up on all those projects, and then the last few can be spent relaxing, enjoying everything in the area that you’ve always wanted to explore.
Want to cut your spending in half? Then trade those lavish vacations for an extremely simple one. Who knows? You might even enjoy it more!
When credit cards were first introduced, the economy boomed. Just by signing up for a credit card, one suddenly had access to more money than what was actually in their bank account. We bought more clothing, we dined out more, and we (unfortunately) started saving less.
What was once an economic boom has now become a ball and chain. With credit card debt means continual payments and interest. Not only have we forgone our future money, but we have also charged ourselves a growing fee in order to do so.
If you want to cut your spending in half, commit to taking your cash back. Increase your cash flow each month by paying off that credit card as soon as possible.
10) Pay Off the Rest of the Debt – Even the House!
Beyond the credit card and car loans, people typically have medical debt, student loan debt, and mortgage debt. While some experts claim that some of these loans are “good debt”, they are still costing you money in interest and they’re reducing your cash flow every single month. If you are serious about getting back on track with your finances, then I would suggest that you not only cut your spending in half, but that you proceed to pay off every single debt you own (I did it and it’s fantastic!). This will probably allow you to live on even less than half of your income and to save up like you never thought possible! Invest just a portion of these savings and you could grow wealthy beyond your wildest dreams!
Are you ready to cut your spending in half?