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10 Extreme Tips to Cut Your Spending in Half

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

cut your spending in halfLet’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

cut your expenses in half4) Sell Almost Everything You Own

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!

cut your expenses in half6) Exchange Your Smartphone for a Dumb One

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.

cut your spending in half7) Get Used to DIY Projects

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!

cut your spending in half9) Cut Up (and pay off) the Credit Cards

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?

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My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.


  1. Great point about the smartphone. I had a grandfathered plan for a while that limited me to 200MB of data a month. I never hit that limit and it helped me to realize that I really don’t need to have a smartphone, it just feels that way.

    Sadly though, I think a lot of people will look at this list and instead of seeing the potential for a lot more money each month for saving and improving their finances (even retiring early maybe) they will look at the idea of going without and not make any changes.

    • True. Maybe 1% of the people out there will actually tackle many items on this list, but many will nod, say it’s a good idea, and then do nothing. Hopefully we’re both wrong and everyone ends up with far more income than their expenses!

    • I keep a flip phone in my truck for Emergencies. I buy a $100 CAD prepaid card once a year and at the end of the year there is usually a balance remaining. Right now it’s almost $150.00. My friends freak out when I tell them my cell phone cost me $56 to use last year. I don’t play Angry Buds, I don’t hound-dog around on Faceblack or Twatter and I do tend to have my head up, looking at the world around me on a regular basis…

      • Lol. Love it! Thanks for the comment, JeffieBoy!

      • I do the same thing. I ask for my birthday every year for a $100 gift card and that usually lasts me over a year (I think the system is broken because the card is spose to expire but hasn’t the last couple of years). The only reason I have a smart phone is for my audiobooks. I had an mp3 player but it died and it’s pretty hard to buy one. Also if I lost my place in the audiobook, I’d have to re listen to the entire file (which can run as long as 75 mins) all over again. I don’t text or use data. There is free wifi at work so I can check mail (I don’t work in an office so I don’t have access to a computer). Oddly enough, cell reception at work is so bad, nobody can use their phone.

        • Interesting accounts Slackerjo. I have a smartphone to keep up with my LAMF Twitter feed, Facebook account, and emails – so really, it’s a side-job write-off. If I had to do without it, I absolutely could. Debt freedom is the huge part of cutting one’s expenses. Without any payments, it becomes pretty easy to live frugally. 😉

  2. For those who want cheap phone coverage check out Republic Wireless. I pay $28/month for a smartphone all inclusive data plan. If your ok with a “dumb phone” plans get insanely cheaper. I’m with you on staycations. We have one coming up the first week of August. I can’t wait!

    • True. I’ve heard they are a pretty decent provider. Thanks for letting us all know!

  3. I do a bit of blogging for some of my income, but I like to fall back on paid surveys when I’m not bringing in the traffic. It requires very little effort, so it’s kind of mind numbing, but it’s been pretty reliable.

    • Really?? Paid surveys? Last I checked they paid next to nothing and took up way too much time. Couldn’t you better spend your time mowing lawns or cleaning houses or something? I would think the pay would be much better, plus you’d get a bit of exercise as a bonus! 🙂

  4. Under cooking your own meals, you gave me a chuckle about the eggs and pancakes. My kids were bugging me to go to IHOP for the 57-cent short stacks last week, but I said we could make them cheaper, especially since we’d have to tip at the restaurant.

    • True! Man, I always hate that tip, because I always forget about it until the bill is served (I really don’t go out to eat that often…as you may have guessed). I never short-change the server, but it just burns me a little to pay that much more for my already-expensive food! Good choice on ignoring the short-stack teaser price!

  5. One problem with selling your stuff is at you will not likely get very much for it. And, if you sell anything you might want later, you’ll waste more money paying to replace it. A better recommendation is to assess what you really need: what are you using that adds happiness or value to your life. Don’t get rid of those hints unless you like being bored, lonely and unhappy.

    • Thanks for the comment, Tim. Stuff is never the source of life’s happiness. That comes from relationships, experiences, and love. But you’re right, sometimes certain things can facilitate these factors – like bicycles, running shoes, and maybe even a frisbee. The thing is, many people don’t really know what makes them happy until they do without it for a while, so it’s not all bad to do without nearly everything to figure out what those one or two things are that you really enjoy.

  6. Cell phone. Republic 10.00 a month. Very good company.

    • Yup! That’s awesome. I think I’ll definitely make the switch when my contract is up.

  7. Hi Derek. Great advice and I agree with all points. I am a cord cutter and just curious why you mention the chromecast? It’s a great device but also needs something to go with it, smartphone or tablet with compatible apps. I ask because you mention to get a dumb phone, and I don’t know that they would work very well with a chromecast. I would say, in my experience, it’s better & easier to get a fire TV stick from Amazon or a roku, the base models are about the same price as a chromecast. I like these options because they are not required to have a secondary device and it’s easier for multiple members of the house to use & watch either devices.

    • Yeah, I’ve got a tablet that I bought for $170 or so, so that works perfectly. But, you can chromecast from a laptop as well (and probably a desktop I imagine) which almost everyone has.

  8. Great point about the staycation, I always find that “it’s not where you are but who you’re with” rings true with me so why spend money I don’t have on a plane ticket when my back porch with friends and family brings me total bliss!

  9. I cook at home, we eat leftovers rarely eating outside food. When we do eat out, its for lunch, almost same items as they serve for dinner at almost 40% less than dinner pricing. My (got free, 3G) phone costs me $35 a month cos I only use it for calls & texts, no web. I already have computers and cameras at home so it’s not necessary. I would love the cut cable but this is my Hubs entertainment, so that’s ok.

    • Sounds like you have quite the low spending compared to most of America. Good for you! And, you’re probably not the least bit unhappy about it are you? Funny how that all works. The less stuff you have, the more freedom you have to be happy. 🙂

  10. We downsized to a smaller home when we moved in 2012, and it has been one of the best moves we’ve ever made! Cheaper mortgage, cheaper utilities, more walkable neighborhood- can’t beat it! We have saved many thousands from doing just this one thing.

    • Great job, Dee! Downsizing the house can be a huge benefit for your finances. I’m glad to hear you made the move and are happy with the results!

  11. “Trade Italy for Iowa”. I’ve been to Italy, and it is pretty great. However, there was one point where my vision was locked on seeing the world, country hopping and seeing different places. After awhile I realized, I have seen so little of this massive, diverse country I live in. If you live in the United States, it is very large. There are so many things to explore. Other exotic places may seem like a “sexier” place to vacation, but in the end there are just as interesting placed here! Now my goal is to start where I am, and see all that this country has to offer!

    • I’m with you Ella! I have a ton of places to visit yet within the U.S. before I start considering a world tour! Thanks for the comment.

  12. I’m a minimalist, so I have a small living space, an old school style flip phone, no cable TV and no credit card debt since I don’t buy ‘stuff’. But, I do like my experiences, so I wouldn’t give up traveling or eating out.

    • Love it. I am a minimalist at heart as well, and I also take the occasional trip. If you’ve got more than enough money for it, than by all means, go for it. This comment is more for those that tend to go on vacation even while they already have loads of debt.

  13. Always weird to see someone borrowing my name. haha.

    Great post!!


    • Haha, ditto. Thanks for stopping by, Derek! Glad you liked the post!

  14. Paying all your credit card charges in time will help you save a lot. Based from my experience. As much as possible, I avoid unnecessary charges so it won’t lead to more serious problem in the future.

    • Glad to hear it Ariel! Keep that credit card balance at zero!

  15. I cut out restaurants almost completely. Now I hate them. I’ve seen the light. Too many added sugar/salt/fats and wayyyy too high of markups. Bad food at high prices… nty.

    • Exactly. We came to the exact realization. Too pricey, food isn’t that great, and definitely not good for our bodies!

    • After finding a large black ant baked into a stromboli over the weekend, I, too, have cut out restaurants. Was one of my last “treats” and now…ewww.

      • OMG! No! Yikes

  16. I’m sure a lot of us can figure ways to greatly reduce expenses. I was an engineering consultant getting a tax break away from my main residence for many years. Finally I decided to get a direct hire job. But I was not sure how long I wanted to be direct hire. it’s been two years but my tax break on two residences was gone all this time. I was selling my biggest gaining stocks to subsidize my two roofs over my head. Now I’m about all out of those stocks. And now it’s time to ditch one of my residences. It’s a place I rent. The hard part is organizing and moving. My total rent on two places is $2450. But I have been flying back and forth, and renting a car when returning to the other residence. That was about $350 per month. Then paying for Cable TV I hardly watched, plus utilities. The rent there is $1100. Yeah these are all certainly luxuries and I’m going to be done with them in two months. It will just about cover every expense I have at one place and still keep me debt free and continue saving in my Roth 401k. I’m looking forward to being able to say my housing costs are about x percentage of my income (like half my current pre-move percentage)!

    • Hi Bill – thanks for the comment! It does sound like you have quite the number of expenses. Getting rid of one of your properties will be a great way to cut down that $2,450 expense. Nice work!

      • Thanks! Update from my July 26 post. It’s done. I’m now down to one residence. I cut down the travel quite a bit. Visiting a relative in December and I am paying $11.20 for an airline ticket (frequent flier miles to use). I’m brewing my own coffee and making my own breakfast most days (cut out the popular coffee spot I went to 6 days a week). I like wines and had $30 to $40 bottles twice a week. Now I’m back to Trader Joe’s Charles Shaw wines at $2.63 a bottle. So I’m bigger into cutting costs. I can handle TJ wines like that for a couple years so that I can save more money.

        Now if only I can cut my car maintenance expenses! I am not sure how much fewer expenses I have per month but I would not be surprised if I cut $2,000 per month.

        • Sounds like you’re doing an awesome job cutting those expenses Bill! I’m impressed!

  17. Loved this list.

    The hard part for me is selling. I can work and work and work but to sell something is so hard for me. I better get over it huh? Pay off debt mode!

    • Yup, I think it’s definitely time for you to get over it. When I was digging my way out of debt, I sold almost everything I had, and I wasn’t saddened in the least. Plus, it made me realize how little possessions actually affect me. I can be happy with little and with much, so why buy a bunch of stuff?

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