Many Americans are struggling financially these days. In fact, as of mid-May, a whopping 36.5 million residents had filed for unemployment, which accounts for nearly a full quarter of March’s total workforce.
If you’re one of the many who have been financially impacted by the COVID-19 pandemic (and the resulting economic downturn), cutting back on expenses can ease the burden.
Need help weathering the storm until you get back on your feet? Here are 14 ways to drastically cut your expenses and save some cash:
1. Analyze the Bigger Picture
Before you can drastically cut expenses, you need to have a good handle on exactly what those expenses are.
Start by pulling out your bank statements from the last couple of months and identifying:
- what you spent the most money on
- any subscriptions or recurring payments you were billed for
- how much you spent on each must-have, including groceries, electricity, water, and more
Once you have this information, you can start to identify some areas you may be able to cut back on (or maybe even eliminate altogether).
2. Stop Eating out Entirely
Eating out can cost you, whether it’s a dinner date with your spouse, takeout on a busy night, or even just a coffee on the way to work. Think of it this way: If you spend just $25 per week on coffee or meals out, that adds up to $1,300 per year — probably enough for a full month’s rent or even your mortgage payment.
Make a commitment to eat only food you’ve cooked or prepared for at least a month. You’ll be surprised at the extra pocket change you come out of it with.
3. Cut out the Morning Commute
Driving to and from work every day can really add up — especially if your drive’s a long one. If it’s possible, consider switching to public transportation, like a train, bus, or subway (just make sure to bring your mask when you do). If something like this isn’t an option in your area, think about carpooling with a coworker. You can take turns driving, which can help cut down on your overall fuel expenses as well as the overall wear and tear on your cars.
As a last resort, you might think about getting a loyalty card from a nearby gas station. These can qualify you for per-gallon discounts that shave serious cash off your weekly fill-ups.
4. Buy Unbranded and in Bulk
Skip the name brand groceries and start going for the unbranded products or even store brands. A lot of cash goes into marketing those name brand options, and you’ll pay a heftier price at the register as a result.
Buying food and household products in bulk can also save money too — especially on items like toilet paper, soap, meat, diapers, and other must-haves. You can also put these budget-friendly grocery shopping tips into action.
5. Shop Around for Everything
Don’t just buy the first product you see. Also, never buy out of convenience. Prices will vary depending on where you shop, when you shop, and the brand and size you choose, so shopping around is critical if you want to get the best price.
You should also check out store mailers and online promos before making a purchase. Don’t be afraid to ask retailers about their price-matching policies. You can often get one store to match the low or discounted price of another if you just know who to ask.
6. Look to Thrift Stores and Other Alternative Options for Shopping
Another way to drastically cut your expenses is to shop at thrift stores. If you’re in need of things like clothes, furniture, appliances, or other non-grocery items, steer clear of malls and big retailers. Instead, try thrift stores or check out online marketplaces like Craigslist, Freecycle, Nextdoor, or even Facebook. There may be someone in your area looking to sell (or give away) exactly what you’re looking for.
7. Reevaluate Your Providers
How long has it been since you picked your phone provider or electric company? If the answer’s more than a year, then it’s time to double-back and make sure you’re still getting the best deal. Head to PowertoChoose.org to make sure you’re getting a competitive electric rate and then see how other phone, internet, and insurance providers measure up to what you’re currently paying.
You can also look for any deals or promos your current providers might be advertising for new customers. Call them up and see if they’ll extend the same terms to you as a loyal customer. It doesn’t always work, but if there’s even a chance it can shave some money off those monthly bills, it’s worth the effort.
8. Cut Back on Your Services
If you’re unable to negotiate lower rates for those monthly services, see if you can cut back on what you receive instead. Can you reduce your data allotment or eliminate your phone’s hotspot? Can you cancel HBO from your cable or the sports channels from your Hulu account? Pare down anything you don’t absolutely need.
9. DIY It
Commit to a more DIY attitude for the foreseeable future. If you normally have your lawn cut, your hair dyed, or your house cleaned, do it yourself from here on out. You’ll save hundreds per month and probably pick up some new skills in the process.
You can take the same approach to fitness. Instead of paying for an expensive monthly gym membership or trainer, DIY your workouts. You can use various free apps and online programs to fill in the gaps.
10. Refinance or Consolidate Your Debts
If you have student loans, a mortgage, a car loan, or any other debt to your name, you’re probably putting a pretty penny toward interest every month. Reach out to a few lenders and get quotes for a consolidation loan. With the market’s currently low interest rates, it could mean drastically reduced interest costs as well as a lower monthly payment.
A nice bonus? It will make repaying your debts easier too (there’s only one payment vs. several).
11. Monitor Your Electricity Use
Be extra careful about how and when you use electricity. Unplug any device that’s not actively in use, turn off every light you don’t need, and turn up the thermostat every time you leave the house. Ask your family members to do the same.
You can also invest in smart devices that do this for you (lights that are motion-detected, thermostats that adjust to your schedule, etc.) Make sure you ask your electric company about any rebates these products might qualify you for.
12. Grow Your Own Produce
Fresh produce can be expensive. To cut back on that grocery bill even further, think about growing your own at-home veggies and produce instead. You could even grow herbs like basil, cilantro, and oregano to cut back on the spices you need to buy. Just be sure to choose plants that are in season and suited to your climate.
13. Downsize Your Car or House
It’s not the most appealing option, but downgrading your vehicle or home can also help reduce your expenses. Have a fairly new, large-sized SUV? Sell it and downsize to a small sedan. Live in a four-bedroom home in the suburbs? Think about renting a smaller townhome until you get back on your feet. You’ll save money on your monthly housing and transportation costs, and you’ll also likely use up less gas and electricity as well.
14. Talk to Your Friends and Family
Finally, make sure your loved ones know you’re trying to cut back. This allows them to be more supportive of your efforts (and steer clear of tempting you into extra spending). They also may have some great ideas for how to drastically cut expenses even further.
The Bottom Line
Even in times of financial hardship, there’s always hope. If you’re struggling financially or wondering how to drastically cut expenses, take some time to assess the bigger picture. Then identify ways you can cut back and lighten the load. You’d be surprised at the difference just a few small changes can make when you put your mind to it.