12 Easy Ways to Drastically Cut Expenses Fast

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Last Updated on February 3, 2024 by Rebecca Lake

As inflation fuels an ever-increasing cost of living, managing household expenses has become something of a juggling act for many families. Finding ways to drastically cut expenses can be a huge help when you don’t have much money to spare.

If checking your bank account gives you anxiety, it helps to think about what you can control. While you might not be able to do anything about high prices at the grocery store or rising energy costs, you do have control over what you do with your money.

There are lots of creative ways to reduce monthly expenses and make the most of your money. We’ll walk you through some of the best money-saving tips to try now.

Key Takeaways

  • Drastically cutting expenses starts with reviewing your budget to see where your money goes each month.
  • Some of the easiest ways to drastically cut expenses right away include canceling subscription services and moving to a new bank that charges fewer fees.
  • If you’re having a hard time getting spending under control, you might try a spending freeze or considering getting help with your budget from a credit counselor.

How to drastically cut expenses for your household

Housing and transportation are typically the biggest costs in a household budget for most families. According to Zippia, average monthly household expenses in the U.S. total $5,577. Approximately one-third of that, or $1,885, goes to housing costs.

Altogether, 75% of American incomes are devoted to everyday expenses. If you’re having trouble making ends meet, making small changes to your spending habits can help.

Making drastic cuts may be necessary if you have less money in your family budget because of a job loss. Or you might be focused on how to cut expenses so that you can save more money toward your financial goals.

The good news is that there are plenty of things that you can do to drastically cut expenses and put extra money back in your budget.

how to drastically cut expenses
How to Drastically Cut Expenses

1. Review your financial habits

A good first step to cutting expenses is evaluating where you’re starting from. Some of the easiest ways to reduce spending immediately include:

Those are simple steps you can take right away to get control over your spending. If you’re having trouble cutting out unnecessary expenses, you might try a no-spend challenge to kickstart your efforts at saving.

A no-spend challenge is a savings challenge that requires you to stop spending money on wasteful purchases for a set period. You might find a no-spend challenge help if you struggle to avoid impulse buys.

It’s also helpful to have the right tools for making and keeping a household budget.

You might consider a budget planner, a spreadsheet, or a simple budgeting worksheet. Personal finance mobile apps that sync to your bank account are another great way to view your expenses and income at a glance.

Looking for a simple money management tool? Empower makes it easy to track spending, saving, investing, and budgeting in one place so you can tackle your financial goals!

2. Lower monthly bills

There are certain expenses in your budget that you may not be able to do much about. Your rent or mortgage payments, for example, are usually fixed.

However, you may have other monthly bills you could reduce or negotiate for a better deal to save money. They can include utility bills, cell phone bills, streaming services, gym membership, and cable services.

Now, how do you drastically cut expenses in these areas? Here are some actionable tips.

  • Utility bills. Some of the best ways to save on energy costs include setting your thermostat higher in summer and lower in winter, installing weather stripping around windows and doors to eliminate air leaks, and washing clothes in cold water only. Installing a programmable thermostat can help with regular temperatures in your home.
  • Cell phone bill. Changing your cell phone plan is an easy way to save money if you’re either reducing your plan features to lower the bill or moving from a contract plan to prepaid. For example, when we switched to prepaid phone services, that reduced our cell phone bill costs by $2,500 annually.
  • Cable. If you still have cable then canceling your plan with your service provider can put instant savings back into your budget. Keep in mind that your cable company will likely try to persuade you to stay on as a customer with the offer of a lower plan. But if you need to drastically cut expenses, you have to be ruthless about cutting the cord.
  • Streaming and subscription services. Streaming channels can be convenient but it’s definitely possible to have too much of a good thing. If you’re paying for multiple streaming services or subscriptions, consider which ones you can live without. For example, if you’re tired of Netflix raising prices all the time you might decide to pare your streaming down to Amazon Prime and Hulu instead.
  • Gym membership. If you’re paying for a gym membership, consider ways you might be able to work out and exercise that don’t require you to spend money. You might be able to pick up a weight bench or exercise bike at a local pawn shop, for instance. Or if you have a park nearby, you could try walking or jogging for your daily workouts instead.

If you’re struggling to find the right expenses to cut, you might consider letting an app do it for you. Rocket Money is an all-in-one personal finance app that helps you find savings so you can stop overspending.

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3. Save money on food

Food is a necessary expense and it can also be one of the most challenging areas for finding cost savings, thanks to inflation.

If you’re looking for ideas on how to drastically cut expenses when it comes to food, here are some little things you can do to make a big difference.

  • Skip fast food and learn how to meal plan and prep
  • Plan weekly menus around frugal recipes and dirt-cheap meal ideas
  • Implement some frugal food hacks to eliminate waste in the kitchen and at the grocery store
  • Shop with a list to avoid impulse purchases
  • Swap out name brands for generic or store brands
  • Get to know the cheapest foods you can buy for less
  • Ditch convenience foods and prepackaged meals
  • Use a cashback app like Ibotta to shop and save
  • Join your grocery store’s loyalty program to access special coupons or discounts, and earn rewards for shopping
  • Invest in a good reusable water bottle and skip buying bottled (if your drinking water is safe, of course)
  • Grow what you can at home using an indoor herb garden setup or moveable planters.
  • Buy in bulk, if you’re certain that you’ll be able to use up all that you buy
  • Organize your pantry around cheap staple foods
  • Consider buying fresh fruits and vegetables from your local farmer’s market if it’s cheaper than the supermarket
  • Don’t shy away from buying marked-down food items that are still within their use-by date
  • Cook in batches or try easy crockpot meals that don’t cost a lot of money or time to make
how to drastically cut expenses on food

These are all different ways to save money on food and create extra room in your budget.

4. Make your own cleaning products

Buying cleaning supplies might seem like a necessity, but you could potentially save a decent amount by learning how to make your own.

Simple ingredients like vinegar, baking soda, and lemon juice are great for making homemade cleaning products. Those are all things you might have around the house already, so there’s no need to go out and buy them.

And as an added benefit, homemade and chemical-free cleaning products can be healthier for your family.

5. Don’t buy things that just get thrown away

There are plenty of convenience items you might buy that just end up in the trash. For example, Ziploc bags are handy but unless you’re diligent about reusing them, they’re just a waste of money.

I stopped buying Ziploc bags last year and switched to other ways to store food, including drawstring bags, beeswax food wraps, and glass storage containers.

Paper towels are another convenience expense that wastes money.

They’re handy for cleaning up messes but the cost can add up. If you pay $8 a week for a six-pack of paper towels, that’s $416 a year.

On the other hand, you could spend $15 or $20 on some quality dish towels that will last you a year or more. This is an easy way to save money and once you get used to using dish towels, you’ll wonder what took you so long to make the switch.

Look around your home and ask yourself what you’re buying that’s destined for the trash. Then commit to only buying things that you can reuse (or at the very least, recycle) down the line.

6. Reduce transportation costs

If you own at least one vehicle, then you already know how expensive cars can be. Between insurance, gas, repairs, and maintenance, it can really add up.

Here are some tips to help you drastically cut expenses in the transportation category of your budget.

  • Consider selling or downsizing a vehicle to save on insurance, gas, and other costs
  • Carpool or take public transportation
  • Increase your car insurance deductible to lower your premiums
  • Consider moving your policy to a company that offers cheaper car insurance
  • Ask about bundling discounts and other discounts to lower rates
  • Earn cash back on gas with Upside

If you’re making car payments, then selling your vehicle is one way to get out of them. You might also consider refinancing your auto loan if you need to keep your car.

Getting a lower interest rate or monthly payment could mean less strain on your budget.

7. Shop smarter

Avoiding buying things you don’t need is one of the most effective ways to drastically cut expenses. But from time to time, you may need to make a purchase.

So when you do need to shop, it helps to know how to save as much money as possible.

cut costs on shopping

Here are some of the best ways to do that.

  • Buy generic brands whenever possible
  • Host a clothing swap with other moms to save money on kids’ clothes
  • Shop local thrift stores and consignment stores rather than buying new
  • Check out Facebook Marketplace or Craigslist for gently used items near you
  • Shop clearance and markdown sections at your favorite retailers
  • Avoid buying trending items, especially trendy kids’ toys or games
  • Skip extended warranties
  • Shop with cash or a debit card instead of credit cards

Using a cash-back app to shop is another simple way to save. Cashback apps can allow you to earn back a percentage of what you spend. Some can even offer special promo codes or coupons to help you get great deals on everything you buy.

My favorite app for earning cashback is Rakuten. You can shop online with the Rakuten browser extension or with the Rakuten mobile app.

Rakuten’s partner merchants offer up to 40% cash back and you’ve got other ways to earn even more money. For example, you can get a $10 cash bonus when you sign up and make qualifying purchases, plus earn up to $30 for each person you refer to the app.

If that sounds good, learn more about how to make money with Rakuten. Or take a closer look at how Rakuten makes money if it’s free to use.


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8. Lower the interest rates on your debt

Finding ways to drastically cut expenses can be difficult if you have debt. Credit cards, for example, usually come with high interest rates that make it hard to chip away at the principal.

While you might not be able to erase your debt overnight, there are some ways to make it less expensive.

  • Refinance student loans. Refinancing means taking out a new loan to pay off your existing loans. If your new loan comes with a lower interest rate than the old one, you could save money and reduce your monthly payment. Comparing student loan refinancing offers can help you find the best lender to work with.
  • Lower your credit card APR. There are a few ways to reduce your credit card interest rate. You might ask for a rate reduction, which your credit card company may be willing to grant if you’re experiencing financial hardship. You could also try a 0% APR balance transfer or a low-interest-rate debt consolidation loan.
  • Consider a mortgage refinance. If mortgage payments take up a lot of your monthly income, refinancing could help you lower the amount you’re paying. Keep in mind that to qualify for the best rates with mortgage refinancing, you’ll need to have a good credit score.

Improving your credit scores can help you save money when trying to borrow. A higher score could help you to qualify for the lowest interest rates on loans.

Check your credit scores for free with Credit Sesame. Credit Sesame offers credit monitoring services, along with prescreened credit offers, and tips for improving your scores. It’s free to sign up, with no credit card required!

9. Disable in-app purchases

Here is a really easy and smart hack for saving money. Disconnect your bank account from the various mobile apps you use.

Doing so can keep you from making impulse purchases when you play games online. Plus, it can also save you from unauthorized purchases your kids might make if they’re using your mobile devices.

This is a smart–and painless–idea for how to drastically cut expenses.

10. Check your insurance deductibles and premiums

Insurance companies want to get the most money possible for coverage. So if you want to drastically cut expenses in this area, you’ll need to be smart about shopping around for coverage.

Raising your deductible can be the easiest way to immediately lower your monthly premiums. You may also want to shop around for lower rates with different providers for:

  • Car insurance
  • Renters insurance or homeowners insurance
  • Life insurance

If you don’t have life insurance yet, buying a policy might be a good idea. You may think of this as a frivolous expense if you’re young and healthy but if something should happen, your loved ones will be grateful that you had a policy in place.

Thinking about buying life insurance? Getting rate quotes from multiple insurers can help you find the best policy for your needs and budget. Credit Sesame makes it easy to compare quotes from different insurance companies in one place so you can get the coverage you need. Start comparing life insurance rates with Credit Sesame!

11. Cut hair at home

At-home haircuts and beauty treatments aren’t as glamorous as going to the spa. But doing these things yourself is an easy way to cut costs.

For example, spending $30 or $40 on a hair clipper set versus spending two or three times that a month on haircuts is a great investment.

You could easily save a few hundred dollars a year this way if you or your family is used to going to the salon on a regular basis.

12. Learn how to handle basic repairs and maintenance

The more things that you can learn to do yourself around the house, the less need you’ll have to spend money.

YouTube is a great resource for learning things like how to:

  • Change the oil in your car
  • Clean your HVAC system
  • Clean gutters
  • Replace broken zippers or lost buttons on clothing
  • Rotate your tires
  • Clean out your dryer lint hose
  • Handle minor repairs for appliances

The more skills you can learn, the less money you’ll have to spend having someone else do repairs and maintenance. And regular maintenance of your home could help you avoid the possibility of having to make major repairs later on.

What to do when cutting expenses isn’t enough

If you’ve followed all of these tips to drastically cut expenses and you’re still not able to make your budget work, you still have some options.

First, you can seek out financial assistance for families. There are government and nonprofit programs that are designed to help people who are struggling financially because of a job loss, illness, or another difficult situation.

Next, you might consider asking friends or family members for help. That might not be ideal for a lot of people but if you have people in your life you can rely on, you may want to reach out to them if you’re desperately in need.

A third possibility is finding ways to make more money. You could do that by getting a part-time job, taking on more hours at your current job, or trying a side hustle to earn extra income.

If you need some ideas on ways to make money, you could try:

The best thing about trying to make more money is that there are so many different ways you can do it. As long as you’re not dabbling in illegal side hustles and you have extra time to spare, there’s no right way or wrong way to do it.

how to drastically cut expenses
Tips to Drastically Cut Expenses

How to drastically cut expenses FAQs

How can I stop spending money?

If you want to stop spending money, it’s important to be intentional about how you use it. For example, check how much you’re spending on things like food, clothing, entertainment, and self-care each month. If these expense categories seem bloated, consider how you can slim them down. Next, look at the smaller expenses that might be eating away at your cash flow.

Here are some more tips that can help you avoid wasting money:

  • Impose a 30-day rule for larger purchases
  • Try a no-spend challenge to stop spending money unnecessarily for a day, week, or month
  • Keep a spending journal that tracks where your money goes
  • Plan purchases ahead of time
  • Use debit cards or cash and avoid paying with credit

And if you’re still struggling with getting your spending under control, you may want to talk to a credit counselor. A credit counselor can help you come up with a plan for making a budget and sticking to it.

How do I cut my monthly expenses?

If you’re not sure how to go about cutting monthly costs, it helps to have a plan. The first thing you’ll want to do is start with a detailed list of your monthly expenses and where your money goes. Next, separate those expenses into two categories: needs vs. wants.

Go through the wants or extras one by one and ask yourself:

  • Does spending money on this add value to my life?
  • Am I creating debt when I spend money on this?
  • If I didn’t spend money on this, what would I do with that extra cash instead?
  • How many hours do I have to work to afford this?

That last question can really help put spending in perspective. If you have to work 10 hours to pay for something, for example, then the final purchase should make you feel like those 10 hours were well spent. Once you’ve done that, you can then focus on ways to lower monthly bills, including some of the ideas listed above.

What should I do with the money I save?

If you’ve taken steps to drastically cut expenses you might find yourself with a little money left in your budget each month. Even if it’s a small amount of money, you could use it to kickstart your savings plan.

For example, if you don’t have an emergency fund yet you might deposit the extra cash into a high-yield savings account. You can earn interest to grow your money until you need to spend it. Online financial institutions are a great place to look for savings accounts that pay the best rates.

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Final thoughts: Cutting expenses can help you get on track financially

Deciding to drastically cut expenses at home might be motivated by need if there’s simply not a lot of money to go around. Or you may make a conscious decision to live on less if you’re working toward financial independence. The simple tips shared here are some of the best ways to curb household spending and manage your personal finances wisely in the long run.

Need more money tips? Read these posts next:

What are your best tips for how to drastically cut expenses?

About Rebecca Lake

Rebecca Lake is a Certified Educator in Personal Finance, freelance writer and homeschooling single mom of two. Since 2014, she's paid off nearly $100,000 in debt and grown her net worth to seven figures. Her work has appeared online at top personal finance websites, including Forbes Advisor, Bankrate, Investopedia, The Balance, CreditCards.com and U.S. News & World Report. Find out more.