I’m a firm believer in the idea that getting out of debt doesn’t have to require a lot of long term sacrifice. You do not have to live like a monk that’s taken a vow of poverty in order to pay off debt.
That said, sometimes we all need to cut back. And you absolutely CAN cut things out of your budget that you’re not getting value from. Why pay extra for stuff you’re not even enjoying, right? (Or sometimes not using at all.) You can also pay less for the things you DO enjoy and want to keep. There’s no reason to pay extra for stuff ever, regardless of your financial situation.
Here’s how to save yourself hundreds of dollars a month or year.
Pick your potential savings targets
Step one is to pick your potential savings targets. That means knowing what you’re spending money on right now, at least in general.
Review this short list of easily-changeable recurring expenses and write down the ones that apply to you (even if you don’t think you’d ever want to get rid of them or that you’re already getting the best deal possible.)
Common recurring expenses:
Cable TV
Other TV services (like Netflix, Hulu, Amazon Prime, etc.)
Internet
Internet radio (Slacker, Spotify, Pandora)
Phone (landline & cell phones)
Gym memberships
Magazine & newspaper subscriptions
Bank fees
For each one, write down who your current provider is, how much you’re paying, and the service you’re getting right now. (For example, if you have cable TV, you would write down who your provider is, what channels and shows you watch and how often you watch them, and the amount you’re currently paying each month.)
Get ready to save
Step two is to decide where you’d like to save, and how much. Start by asking yourself these 3 Value Questions for each of the items you wrote down:
Did I get enough value or enjoyment from this?
Was it worth the time and energy it took for me to earn the money I just spent?
Is this purchase or expense in line with my values and what I want out of life?
If your answers are “no”, call the provider right now and cancel that puppy to reap the biggest savings. (There’s no reason to keep things that aren’t worth it.) Stay strong when they offer you a deal to keep you, because a deal isn’t a deal if you don’t actually want or use what’s being offered…and you’ve just determined that you don’t.
If your answers are less clear or leave you with a yucky feeling, such as in the case of a gym membership that you do believe is valuable but aren’t using, be honest with yourself. How long has it been since you did you use it? If you can’t remember or it’s been more than 6 months, cancel it or at least put it on hold. You are not a failure because you stop paying for a gym membership. You’re being proactive by saving money, and you can always change your mind later after you’ve been consistently exercising at home for months. Chances are good that you can undo anything you do now if you really want to.
If your answers are “yes”, it’s time to get a deal so you can pay less for the things you want to keep. Go on to the next section for savings strategies you can use.
Choose your savings
It’s time to implement your money savings plan! To save money on your currently monthly expenses, start down the list you made earlier.
In addition to canceling a service altogether and not replacing it (the biggest way to save), there several basic ways you can usually save money. You can:
Put the service on a temporary hold to see what it’s like without it or to save for a short period
Switch providers to get a better deal
Change to a lower cost plan or special
Share a plan (and split the cost) with someone else if the provider allows it
Buy your own equipment instead of paying a monthly rental fee (such as for a cable modem or DSL router)
Remove unnecessary or duplicated add ons (for example, do you need the monthly protection plan if you have coverage for the same thing elsewhere?)
Take advantage of discounted plans or services if you qualify for them (check with EveryoneOn and Benefits.gov, and search Google for things like “discount utilities [your state]” or “[service type] discounts [your area]”.)
Find a different way to get the same services for free (such as borrowing movies from the library or watching TV on Yahoo! View)
Use coupons, deals, or special time-of-use plans to save
Remember that even saving just a little on each service can save you a bundle overall.
Get a deal on monthly expenses
Let’s talk about how to get a deal on some common monthly expenses for a minute. Here’s how to go about it. Set aside 15-20 minutes a day to go through the list you made.
A little time invested now can save you a LOT of money later, month after month.
Log in to your existing account to see what all you’re being charged for. You may be able to quickly save money just by changing or eliminating a few options yourself in your existing account, but if not, search the internet to find other providers who offer similar services.
For example, you can Google the word internet followed by your city name to find a list of internet providers in your area. See what kinds of deals they offer, how long the deals last, what you get with them, and whether or not they require a contract. You want to be able to compare apples to apples as much as possible. (If you have an enterprising kid or are up for family challenges, get the whole family involved. You could even have a contest to see who can save the family the most money.)
Once you’ve a handle on your options, it’s time to call your providers and get a deal. Remember to be polite, upbeat, and friendly to everyone you talk to. Feel free to use this savings script:
The savings script
Start by simply saying, “Hi, I’m cutting back on expenses. Could you help me find ways to spend less on my [service]?”
Then see what they say.
If they say you’ve already got the best deal, ask how you could maybe get a better deal anyway. Then wait in silence. Silence is powerful.
If that doesn’t work, politely let them know you’ll be considering [competitor name] instead because you really need to cut back on expenses, even though you enjoy their service. They may wish you well at that point, or they may switch you to a customer retention department where you can repeat your request.
If the customer retention department can’t help you, go ahead and actually consider the competitor you mentioned earlier. Sometimes switching to a new provider can really save a good amount each month. Just be sure to take into account any associated start up costs (and ask if there’s any way those can be waived.)
You can also try actually canceling your existing service without replacing it, and waiting to see if you get a call with a better deal after it’s cancelled. However, only do that if you would really be ok with no longer using the service.
Repeat the actions above for each of the providers in your list.
Saving money on general expenses:
Now let’s talk about saving money on monthly expenses in general. Most of us have a variety of large expenses that aren’t necessarily tied to a particular provider, or that typically offer a large number of options as providers. These are expenses like:
Insurance (health, car, renter’s, homeowner’s, disability, pet, & life)
Medication
Utilities (AC, heating, water)
Household help (pool service, housecleaner, landscaping/lawn care, snow removal)
Transportation costs (gas, parking, public transit, car repairs & maintenance)
Food (groceries, eating out, snacks, lunches at work or school)
Your kids (activities, allowances, gifts, parties, school supplies, tutoring, daycare)
Your pets (food, supplies, toys, treats, vet bills, boarding, daycare, walking, pooper scooping)
Personal care (haircuts, hair color, nails, massages, clothes)
There are opportunities to save on all of those too. (I’ll address very large expenses like rent/mortgage, car payments, vet bills, tuition, & travel in a future article.)
Basic ways to save on larger expenses
Here are the basic ways to save on larger household expenses. I’ve broken them down by category here.
Reducing insurance costs (health, car, renter’s, homeowner’s, disability, pet, & life)
For insurance, contact your existing provider to see if you’re still getting the best deal they offer. It can pay to shop around and to bundle multiple types of insurance with one provider.
Consider contacting an insurance broker in your area who works with multiple providers to see what they recommend. You can also fill out quote forms online; just be aware that you’ll be giving your info to many providers and will likely be contacted by many of them. Make sure you understand exactly what’s covered and what isn’t so you can make an accurate comparison. Also, don’t cancel existing insurance before you have replacement coverage active and in place.
For health insurance specifically, if you don’t go to the doctor often AND have a hefty emergency fund, high deductible plans can cost less.
If you do have a high deductible plan, it can also sometimes cost you less if you pay privately for doctor visits, certain tests, or prescriptions instead of using your insurance. Ask your provider what their self-pay prices are for the specific services you will be using.
To compare plans, you can check Healthcare.gov if you qualify, talk to your HR department if you and/or your spouse have an employer, and also consider checking with a health care insurance broker. Health care ministries such as Liberty are also becoming a more popular option for self-employed people. Tricare and Tricare Reserve Select are options if you’re in the military or reserve.
Spending less on medication
For medication (especially medication that isn’t covered by insurance or that costs more if you DO use your insurance), know that the prices aren’t the same everywhere. Most people think that there’s some sort of set price per medication, but that isn’t true at all.
Call around to all of the pharmacies in your area and ask for their price on your exact medication, both as self-pay and with insurance, and both as a generic and brand. Sites like GoodRX will also do comparisons for you. Generics are usually significantly cheaper if they’re available, but not always.
I’ve found that Costco is consistently cheaper for the medications I need, so I almost always go there even though their pharmacy isn’t on my current insurance plan. (Depending on your state, you may not even need to be a member to use Costco’s pharmacy. Call yours to check.) Walmart also has many $4 prescriptions. Depending on your income, there are prescription assistance programs available too. (The Mental Health America site has a good list of prescription assistance programs.)
Saving money on utilities
For utilities, in addition to checking for programs that you might qualify for based on your circumstances, area, or provider, you can save by using your utilities more wisely.
That means doing things like applying weatherstripping & patching holes (those unsealed doors & holes cost you in utility bills), turning your thermostat up or down a degree or two depending on the time of year, using a programmable thermostat, using time of use plans if they’re beneficial for you, changing air filters regularly, watering less often, installing low flow shower heads and other water-saving measures, etc.
In some locations the utility companies offer free inspections, tips, or even sometimes equipment, so contact yours directly to see if they offer those or similar ways to save.
Household services
For household help such as pool service, housecleaner, landscaping/lawn care, snow removal, etc. first ask yourself the 3 Value questions mentioned above. If you determine that you still want or need the help, you can try asking your existing providers if they offer any deals, switching providers (maybe even switching to having your child do the service instead…), or having them come less often. For example, if you typically have someone clean the house each week, they could come every two weeks instead, or every 10 days.
If you’re not really thrilled about paying someone to provide a household service but just aren’t confident you could do it yourself, YouTube is a wonderful resource. This applies to repairs too. We’ve learned how to do things like maintaining our pool, fixing a broken dishwasher, fixing a water leak, and replacing car parts thanks to YouTube. It can feel great to do things yourself, and if it turns out you can’t do it after all or don’t like doing it, you can always hire someone to takeover later. Just be sure to take appropriate safety measures. You might even have fun :)
Saving money on transportation costs
The cost of gas, parking, public transit, car repairs & maintenance can all add up. If you use public transit regularly, take advantage of monthly passes. If you’re a student, a senior, or disabled, take full advantage of those rates.
If you have a car, maintaining it regularly can save you a bunch over the long run. This means making sure you do regular oil changes, keep your tires rotated and inflated to the proper pressure, and change your filters and belts on a schedule or if you notice issues with them earlier. Check out the Haynes manual for your car from the local library and look it over to understand things that are specific to your car. This will help you be more informed when talking to mechanics too. Speaking of which, find a mechanic you can trust BEFORE you have a problem with your car.
To save gas, car pool if possible (even if it’s just one day a week) and reduce the number of trips you make in general by combining them. Do all of your errands at once and map out your route in advance so you take the shortest route. See this post for more ways to save on transportation.
Saving money on food
Between groceries and eating out, it’s easy to spend a fortune on food if you’re not careful. The good news is that means there’s usually lots of room for savings. The biggest way to save is to plan ahead. Meal planning, freezer cooking, and couponing can all help. Make enough for leftovers too, and eat those for lunch the next day. If you’re a senior, grocery stores often have days where you automatically get a discount, so make it a point to shop on those days.
Consider gardening too, even if it’s just a few veggies in containers. (You can even regrow some vegetables in water – who knew?) I have a black thumb and live in the desert, and even I managed to grow some potatoes.
If your neighbors have fruit trees or gardens, they may be happy to give you excess produce which you can freeze for use out-of-season. Joining a CSA can save money if you would normally eat the food they offer. Don’t forget about food banks and mobile food pantries if you qualify. Sometimes they’re available at a flat rate for anyone regardless of need too, with the idea of raising money.
If you have an eating out habit like I do, even just eating ONE less meal out a week or month can save you a good chunk of change. Eating at less expensive places, eating out at lunch instead of dinner, ordering less food, and drinking tap water instead of paid drinks can save as well. (Just tip well!) Keep a few “I really don’t feel like cooking” options in the freezer too and just bite the bullet and eat those instead of going out. It takes less time and energy to do that than ordering something or driving somewhere to eat out does.
Snacks are another area where it’s easy to spend a lot without really noticing. If you snack because you’re bored, switch that habit to getting a drink of water and taking a walk instead. Both your wallet & your body will thank you. You can also buy snacks in bulk and then package them into smaller portions yourself as soon as you get home from the store. You can buy cheaper snacks too. In-season fruit makes a great, inexpensive, healthy snack.
Spending less on kids & pets
It is SO easy to spend a fortune on all the things associated with having kids and pets. For kids, there are activities, allowances, gifts, parties, school supplies, tutoring, daycare & after-school programs to contend with. For pets, there’s food, toys, treats, vet bills, boarding, replacing stuff they’ve destroyed, etc.
So how can you save money? First, recognize that chances are YOU care about all of the associated things a lot more than your child or pet does. And if your child DOES care more than you, that’s an opportunity for them to pitch in by learning about earning money & budgeting. There’s no time like the present to learn to make smart choices.
Relatively easy ways to spend less on kids include: limiting the number of paid activities & sports they participate in (kids are so over-scheduled that they might appreciate some free time), requiring kids to pay a portion of the fees (even very young kids can do work around the house that you can pay them for), setting a dollar limit on gifts (both for parties your kids attend and for gifts you give your kids), buying supplies in bulk or used, seeing if you can exchange tutoring or babysitting services with other parents in the area, and taking advantage of discounted activity & educational programs in your area. Many communities offer free or low-cost activities — just check with your city or search Google.
For pets, the cost of toys can be ridiculously high. Remember though that your dog would be just as happy shredding junk mail for you or kicking an empty milk jug around the house as they would chewing up a $19 toy. Just be sure to watch them the whole time so they don’t eat something they shouldn’t. Call around for vet costs to find the best prices, and take advantage of coupons. Sometimes your local shelters will offer discounted shots as well. If you’re traveling, it can be cheaper (and less stressful for your pet) to have a trusted relative or friend stay at your house instead of paying for boarding — sometimes this is true even if you have to fly them to your home. They get a vacation, you get inexpensive pet care, so it can be a win-win. Be creative and chances are you’ll save.
Saving money on personal care
The cost of haircuts, color, nails, massages, & clothes can really add up. Getting your hair cut slightly less often can save money, as can coloring your hair & doing your nails at home, or using a beauty or massage school.
You can save on clothes by buying timeless pieces that can be mixed and matched, by shopping thrift stores, consignment stores, & garage sales, by doing clothing exchanges with friends & relatives (which helps declutter too!), and by canceling catalogs and staying out of the mall. It’s hard to want what you don’t even know about. For kids clothes, you may be able to sell old clothes on consignment as well and of course hand me downs will save.
One last note on saving money…
I’ve given you a LOT of ways to save. If it all seems overwhelming, remember that you absolutely don’t have to do everything at once (or even everything period.)
Start by picking one thing and seeing how much you can save. But start! Chances are you’ll be inspired to come back and pick another later.
If you’ve got a specific monthly savings goal you’re trying to reach, knock that out as quickly as possible! Yes, it will take some work, but your wallet will thank you and you’ll feel a great sense of accomplishment. Happy savings!