How to Slash Your Household Expenses in 7 Easy Steps

Joel Lee 22-09-2015

Tired of seeing all of your income go towards bills and expenses? You aren’t alone. In 2009, the average American household spent about 55% of their post-tax income on housing, transportation, and food alone.


When you include other necessities (e.g. clothing, insurance, healthcare) and general recreation (e.g. vacations, entertainment), that number skyrockets to somewhere around 70%. And this is just the average household, which means there are plenty who fare even worse.

But here’s the good news: with a little bit of effort, know-how, and determination, you can slash that number and reclaim the money that’s rightfully yours. Are you ready to have more money in your pocket?

Install Budgeting Software

Before you can productively cut down your household expenses, you have to figure out where all of your money is going. If you’re unknowingly spending over $1,000 a month on food just for yourself, it’s more prudent to focus on that rather than trying to optimize a few dollars on gas or electricity.

You could do this by hand, but the easiest way would be to install some budgeting software. Don’t let that scare you! It’s not as scary as it sounds.

Many people think that “budget” implies massive spreadsheets and overwhelming amounts of math. And while it’s true that budgets do involve spreadsheets and math, the amount of work you have to do is much easier than you think. You can have a functional budget ready to go in less than a hour.


Simply put, all you have to do is track how much money is coming in every month (e.g. paychecks, alimony) and how much money is going out every month (e.g. bills, takeout, Starbucks). The keyword here is track. Most people underestimate how much they actually spend on things here and there.

We highly recommend You Need A Budget, which is available for $60 but has a 34-day free trial. Read our review of YNAB YNAB Makes It Easy to Make a Budget and Stick to It Does your checking account remind you of a debt-burdened Southern European nation? You Need A Budget. We know it's tough to keep track of spendings. YNAB can help. Read More to see why we love it so much. But if you don’t want to pay for a budget, consider using the Mint spending tracker How To Use Mint To Manage Your Budget & Spendings Online Read More or making a budget in Excel Make a Personal Budget With Microsoft Excel in 4 Easy Steps Do you have so much debt that it will take decades to pay off? Make a budget and use these Excel tips to pay off your debt sooner. Read More . Both of those options are completely free.

Lastly, consider installing some useful finance mobile apps Build Better Spending Habits with These 7 Android Finance Apps A few lifestyle tweaks can greatly improve your financial situation. Here are some of the best Android apps to help you budget and plan your spending. Read More like Expense IQ or Mvelopes. You’ll be surprised by how much they can help you maintain control over your spending habits.

Switch to a No-Contract Mobile Plan

Another huge money sink for many American households is cellular service. Not long ago, the average household bill for cellular service in the U.S. ranged between $120 and $148 per month for the Big Four providers: Verizon, Sprint, AT&T, and T-Mobile.


Add in the fact that most people upgrade smartphones at least every two years and that cost goes up even higher.

Switch to a no-contract MVNO plan instead! An MVNO is a Mobile Virtual Network Operator, which is just a fancy term for an alternate provider who rents infrastructure from a bigger provider but operates independently in terms of plans and rates.


Why should you switch? Because MVNOs can save you money What Is an MVNO and How Does It Save Money on Your Cellular Bill? [MakeUseOf Explains] In the US and Canada, we're taught that we need to sign contracts because cell phones and cellular service are so pricey. That's a bald-faced lie. Read More . Not only that, but you won’t be locked into any contracts so you’re free to switch providers whenever you want. Cheaper and more flexible? You bet. And there are several other reasons to switch 10 Money-Saving Reasons You Should Switch To An MVNO Are you out of contract with your cellular provider? Rather than upgrading your phone, and signing a new contract, consider switching to a mobile virtual network operator, or MVNO. You can save hundreds, even thousands,... Read More , too.


In fact, with a money-saving mobile plan The Best US Cellular Data Plans for Your Smartphone Though mobile phones have improved over the years, cellular plans have either stayed the same or gotten worse. Luckily, we've found the best deals for US smartphone users. Read More from Republic Wireless or Ting, you could end up spending as little as $10 per month for a fully functional smartphone. These plans use Wi-Fi instead of data 8 Useful Tips to Reduce Mobile Data Usage and Save Money Want to get the most out of your mobile data plan? These apps and tricks can help you squeeze out every last megabyte. Read More whenever possible to save you tons of money.

Or you could go to the extreme and sign up with FreedomPop, which offers a 100% free mobile service Take Back Your Smartphone with FreedomPop’s Free Phone Plan Cell phone plans in the US are confusing and expensive. FreedomPop gets back to the basics and offers all you'll need for free! Read More that provides 200 minutes, 500 text messages, and 500 MB of data every month.

And while we’re on that topic, try to reduce your data usage Saving Mobile Data: 5 Clever Ways To Reduce Data Usage If you’re on a limited mobile data plan, you may find opening your bill to be harrowing experience. Is there an overage charge? How much? And why was there so much data used? While the... Read More as much as possible. Not only will you save on overage fees, but you’ll be able to switch to a smaller data plan where the monthly savings are significant.

Cut the Cord & Use the Internet

Last year, the average American household spent $86 per month on cable television, which amounts to a whopping $1,032 every year How A Little Tech Knowlege Can Save You Thousands Every Year A good chunk of your income goes to scheduled monthly expenses – and you're just barely keeping up. With a little tech savvy, you can get those expenses down and save thousands every year. Read More . Combine that with the fact that most households already have high-speed Internet and the conclusion is clear: it’s time to cut the cable cord.


What would you do with an extra thousand dollars every Christmas?


There are many benefits to cutting the cord 4 Real Benefits of Cutting Your Cable Cord In the end, I decided to cut the cable. Abstaining from cable television has a number of advantages. Read More , but money is the biggest reason for most folks. All you have to do is replace cable television with a few TV streaming services Cut the Cord Forever With These 15 TV Streaming Channels Cable TV is in decline, as the internet provides cheap, on-demand entertainment. Here are 15 of the best TV streaming services to help you cut the cord. Read More like Netflix, Hulu, and Amazon Prime. Those are the three subscriptions I have and I’ve yet to exhaust all of the available shows and movies.

At $25 per month for more on-demand media than I can even stomach, cutting the cord became one of the best decisions I’ve made in the last few years. Plus, I get to take advantage of all the hidden benefits of a Prime membership 10 Awesome Amazon Prime Benefits You've Probably Overlooked Free two-day shipping is just the beginning. Here are some notable Amazon Prime subscription benefits you may not know about. Read More .

Admittedly, the transition can be a bit difficult for some, especially if vegetating in front of a TV has been part of your daily routine for many years. But follow our guide to cutting the cord Cut That Cord! How to Ditch Cable If you've read about the cord-cutting phenomenon but aren't sure where to start, this is a guide to cutting the cord and ditching cable TV for good... Read More and you’ll be thanking yourself in no time.

Kill All Unnecessary Subscriptions

We just advocated switching from cable television to online streaming services, but really ask yourself if you even need those online streaming services. Can you live without them? Great! Now you can save yourself even more money.

Digital subscriptions Top 5 Online Subscriptions You Can Give As Gifts With the ever increasing digitization of society, online subscriptions have become a valid form of gift-giving and they're often more fulfilling than a physical gift of same worth. Read More are another big cash sink, especially amongst the younger generation. A $5 subscription might not seem like a big deal, but when you have ten or twenty of them, it adds up. Fast.

The immediate one that comes to mind is Amazon Prime. It’s awesome, I know, but it’s not really worth it if you only buy something once every few months. Or worse: if you end up buying more stuff just because you have a Prime membership. Is it tempting you to be an impulsive online shopper Buck the Trend: 5 Tips to Avoid Shopping Impulsively Online Are you an impulsive shopper? Do you throw away money on items you don’t really want or need? Here are some tips and tricks to help you regain control. Read More ? Then cut it.


Entertainment subscriptions can be another big cost. Consider cutting magazine memberships and start reading magazines online 10 Top Men’s Magazine Sites That Are Available Online for Free Here are the top ten magazine websites you can catch online for free. Or at least, a substantial portion of their content. There is a lot to choose from as popular names have gone for... Read More instead. Switch from pay-to-play MMORPGs to free-to-play MMORPGs The 10 Greatest Free MMORPGs To Start Playing Now The landscape of MMORPG gaming has never been better than it is today. Some may pine for the good old days when games like Ultima Online, Everquest, and Dark Age of Camelot dominated the scene,... Read More . Ask yourself if you’re reading enough to make that eBook subscription service The 6 Best Ebook Subscription Services for Unlimited Reading Ebook subscription sites allow for unlimited reading for a flat monthly fee, similar to Netflix and Spotify. Should you subscribe? Which site is best? Read More worthwhile.

“Box subscriptions” are a recent trend that can drain your wallet if you aren’t careful. For example, Naturebox and Mistobox will send you crates of snacks for $20 per month while Barkbox sends dog supplies for $30 per month. Convenient? Sure. Cost effective? Maybe not.

And definitely cut ties with meal delivery services like Blue Apron and Plated. These are wonderful as luxuries, but at $10 per meal, they can cost you hundreds of dollars a month if you aren’t careful.

Check Coupon and Sales Sites

Couponing is a tried-and-true method for cutting down costs. You don’t have to go off the deep end and spend hours every day collecting every snippet you can find. But if you aren’t looking for coupons at all, then you’re missing out on a lot of savings.

There’s a healthy middleground that you can walk.

Start with Groupon. Some people view Groupon as an insecure wasteland full of scams and fraud. Others think Groupon is the next best thing since tabbed browsing. Neither are true. It’s useful, but only if you know how to use Groupon for real value Is Groupon Safe and Does It Really Save Money? Is Groupon legit and will it always save you money? These Groupon tips will help you make better buys on the marketplace. Read More . If you aren’t discerning, it could be counterproductive.

FatWallet and SlickDeals are your friends. Not only do they provide time-sensitive updates on coupons and sales, but their communities are smart and informed when it comes to separating real deals from not-so-great ones. Use them and you’ll come out a winner A Simple Tip That Will Save Money With FatWallet and SlickDeals After the expensive holidays, and global recession has thinned our wallets, spotting a good deal can really boost your morale. Fortunately, some money-saving websites cater to your needs. Two of the best online communities for... Read More .


If searching for coupons is not your cup of tea, why not let the coupons come to you? Here’s how to track deals using RSS feeds and IFTTT The Secret To Getting The Best Deals On All The Stuff You Want If you make frequent online purchases using big-name retailers, such as Amazon, BestBuy, and Walmart, then you probably know about the deal finding sites SlickDeals and Fatwallet. A little known secret is that all the... Read More . Or you can use a service like Promofly which brings the coupons directly to you Stop Searching For Coupons! Promofly Will Find Them For You There are many websites in which you can find good deals. Some are better, some are worse, but the process of using them is pretty much the same. You realize you want a code, you... Read More .

There’s a lot to be said about this topic, so check out our guide to online couponing How To Save Money By Couponing Online While technology sometimes offers us entirely new options, it more commonly refines everyday life. Couponing is one example. People have been saving money with coupons for decades, but the proliferation of mobile Internet offers new... Read More for more tips on maximizing the value of your online purchases.

One huge caveat: Coupons and sales only save you money if you were already going to buy it whether it was on sale or not. Never buy something just because it’s on sale! This is a trap that will end up costing you in unnecessary purchases.

Instead, maintain a list of things that you will eventually need to buy. If a sale or coupon ever pops up, then you can stock up and save money in doing so.

Invest in Smart Home Automation

Smart home automation What Is A Smart Home? We recently launched a Smart Home category at MakeUseOf, but what is a smart home? Read More is all about making your life more convenient by taking advantage of advanced device interconnectivity. For example, security cameras that automatically turn on when nobody is home.

Admittedly, a lot of smart home devices are either gimmicks or wholely unnecessary. Do you really need a sprinkler that stays off when it knows that it will rain later that night? Maybe if you’re a gardening enthusiast 5 Smart Devices To Help Manage Your Garden Turns out, a smart garden is completely possible, thanks to the devices we are going to take a look at today. Read More . Otherwise, you should probably skip over it.

But there are a couple of smart home features that can make your life easier and save you money in the process.

For example, smart home thermostats Looking to Buy a Smart Thermostat? 5 Nest Alternatives When it comes to controlling the temperature of your home, the Nest smart thermostat is king, but there are plenty of options out there. Here are 5 you should consider if you're looking to buy. Read More can regulate home climate control in ways that accommodate your personal preferences while optimizing energy usage (e.g. shutting off when nobody is home or when people are sleeping).

Smart outlets are another product worth looking into. Basic ones allow you to turn outlets on and off from afar using your smartphone, but more advanced ones like the Belkin WeMo Insight can track how much energy you’re using 5 Smart Hacks To Save Electricity In Your Smart Home he trick to saving electricity is in knowing where most of your energy is consumed. Read More and automatically shut off when devices aren’t in use.

If you own your own home, you should also invest in a few moisture and humidity sensors Attention Homeowners: 5 Smart Home Features Worth the Extra Cost Which smart home features are worth it? Which ones can be safely tossed aside and ignored? Let's take a look at a few that are actually worth the money. Read More . By detecting water leaks and alerting you when humidity is too high, they work as preventative measures against broken pipes and rotting wood — both of which can be costly to repair.

If you’re worried about upfront costs, don’t worry. As long as you’re mindful about what you buy, smart homes actually aren’t that expensive How Much Does a Smart Home Really Cost? A smart home could change your life – freeing up time in your day and regulating your routine so you don't have to remember what needs to be done. But how expensive is it, really? Read More .

Start Cooking Your Own Meals

One of the most effective ways to cut down on spending is to start cooking your own meals every day. You might be one of many who are intimidated by this idea, but rest assured: your kitchen fears are conquerable Intimidated by Cooking? 6 Simple Tips to Conquer Your Kitchen Fears Eating out is awesome, but it doesn’t compare to the experience of cooking a meal from scratch. But it’s far too common for people to hold a phobia of the kitchen. Read More .

In the past, we’ve explored various options for learning how to cook online for free Where to Find Free Online Cooking & Baking Classes Where do you go if you want to approach cooking and baking systematically? Most online cooking courses are paid, but these seven are both free and excellent. Read More . All you have to do is pick one or two, take a deep breath, and take the plunge. Stick with it for a couple of weeks and soon enough your meals will taste better than takeout — and cost a fraction of the price!


Of course, cooking takes more time than ordering delivery, but you can shave off a lot of unnecessary shopping time by planning your meals in advance Plan Weekly Meals in Under 1 Hour with 5 Web Tools There is a way to eat healthy food that doesn't cost much and do so in a way that doesn't require too much effort on your part. That secret is weekly meal plans. Read More and doing your shopping all at once. Or even better, cook meals in bulk so you only have to cook once or twice a week.

Personally, I used to spend over $500 per month on food for myself. Now that I cook in bulk regularly, it costs me less than $200 per month and I’m healthier. That’s a win-win, if you ask me.

You Can Save Hundreds Every Month

Congratulations! You’ve just completed a crash course on basic personal finance Simply Frugal: How To Learn Personal Finance The Easy Way Do you fret over bills and debt on a regular basis? Do you feel lost when others speak using financial lingo? Here's the good news: it's never too late to learn about money. Read More and should be well on your way towards saving hundreds of dollars every month. That wasn’t so hard, was it? Money management is easy once you get the hang of it.

But before you go spending all of that saved money on luxuries and frivolities, we highly recommend that you first get yourself out of debt How to Get Rich: The Fastest Way to Get Out of Debt Imagine being debt free. No overdrawn balances or unpaid bills. There is a foolproof way of getting yourself out of debt. It starts with a plan and some discipline. Let's visit the other ingredients. Read More . Nothing will save you more money than killing high-interest debt once and for all.

What’s your biggest struggle in managing household expenses? Do you have any tips or tricks that you can share with us? Tell us in the comments below! We’d love to hear from you.

Image Credits: Mobile Phone by Pan Xunbin via Shutterstock, Netflix Tablet by Twin Design via Shutterstock, Magazine Rack by Niloo via Shutterstock, Coupon Clipping by Igor Kisselev via Shutterstock, Cooking Preparation by Yeko Photo Studio via Shutterstock

Affiliate Disclosure: By buying the products we recommend, you help keep the site alive. Read more.

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  1. Rob Nightingale
    September 23, 2015 at 10:22 am

    I did the cancelling subscriptions thing a few years ago, and was surprised at how much I actually saved. We're also currently in the process of buying a house and have decided to not have an actual TV. Netflix is good enough for us, and being in the UK, also saves us a big chunk of cash on a TV license.

    • Joel Lee
      September 24, 2015 at 6:10 pm

      Those subscriptions really add up! And the real tricky part is that each individual one seems small enough that you're tempted to ignore them when budgeting for expenses, because "it's only $8 Netflix" or "it's just a $5 magazine", but a dozen of them easily becomes over $100 a month. Yeesh.

      I've saved so much money after dropping cable TV and going Netflix-only. It's incredible.

  2. Anonymous
    September 22, 2015 at 1:47 pm

    You did not mention Quit buying single serving sizes of anything and Make your own lunches. For the price of a case of 30 single serving Keurig cups you can buy a 39 oz. bag of coffee that will last you 5 to 10 times as long long. Of course you will not get the flavor variety but you will save money.

    "Now that I cook in bulk regularly, it costs me less than $200 per month"
    We spend a little bit more than that for 3 adults.

    "Invest in Smart Home Automation"
    First ask yourself what the payback time is.

    To save money on energy consumption, requires a change in philosophy more than it requires a change in devices. Instead of maintaining 68 degrees in the summer and 72 degrees in the winter, reverse that to 68 in the winter and 72 in the summer. If you're cold, put on a sweater or a sweatshirt. do not crank up the thermostat. Instead of turning up the A/C, open couple of windows to create a cross breeze. Try to keep your dwelling at the same temperature for as long as possible. Changes in temperature require energy.

    To save money, learn to say NO. Try not to indulge your every whim.

    • Joel Lee
      September 24, 2015 at 6:08 pm

      Absolutely, on all accounts. I'm impressed that three adults can live on $200 per month for food (that's $22 per week per adult! What!). Single serving anything is definitely a wallet killer. And great point on smart home automation vs. philosophy. Good money management really is about mindset more than anything else.