How To Drastically Cut Household Expenses: 11 Life Hacks

How To Lower Monthly Living Expenses | How To Lower Bills | How To Stop Living Paycheck To Paycheck

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Hey there! Are you looking to reduce your household expenses but aren't sure where to start? It turns out, there are many ways you can lower your household bills without a tremendous amount of effort.

In this post, let's talk about how to drastically cut household expenses. There are two main ways to save more money every month. One way is to simply make more money, and another way is to lower your bills. I have 11 life hacks that I'm going to go over.

Without further delay, let's go over how to reduce your household expenses, such as your cable bill, auto insurance, utilities, and more.

How to Drastically Cut Household Expenses?

Let's face it: Most of us have a lot of household expenses. Whether it's paying for the internet, our cell phones, auto insurance, credit card debt, or utility bills, our monthly expenses can really take a chunk of change out of our paycheck. If you're living paycheck to paycheck, it's even more important to reduce your monthly expenses.

Here are some common things you might be paying too much for and how you can drastically cut your household expenses. This will reduce monthly expenses, both short term, and long term.

1. Lower Your Cable TV/Internet Bill

You might be paying too much for cable and internet. Many companies open an introductory rate to new subscribers. It is often possible to get this rate after they have raised your rate to the standard rate.

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In my case, I called up my ISP and told them I knew I was paying too much for internet service, citing the national average for my speed, and said I had been a loyal customer for seven years.

I told them that I was thinking of switching providers and asked if they could help me by lowering my monthly payment. I got transferred around a few times but then got my rate changed to the introductory rate ($30/less per month) for 24 months (total savings per year, $360)

The other way to cut spending is to drastically lower your expensive cable bill is by buying a compatible cable modem and a compatible cable box. Providers are required by law to provide a list of devices that work with their services.

You could be paying up to $10 per month per device that you rent from your ISP. So if you rent one cable box and one modem, you could be saving $20 per month right off the bat! If you buy your own equipment, you could save a lot of money in the long run.

Consider getting less expensive services such as On-Demand streaming from companies such as Netflix and Hulu.

2. Shop Around for Auto Insurance

When was the last time you shopped around for auto insurance quotes? If it's been a long time, consider comparing rates. I do so every couple of years and have switched insurance providers a few times. Another way you can reduce your monthly expenses is to shop around for car insurance.

It doesn't take long to compare quotes, and the savings are totally worth it. In 2019, I lowered our auto insurance premiums by about 25% by shopping around.

At The Zebra, you can compare prices of auto insurance plans in no time whatsoever. The amount of money you'll save could be hundreds per year.

Remember, your auto insurance company may not be giving you the best rate. And even if you're happy with them despite your rate, shopping around gives you leverage. Why should you spend more money than you have to?

If you know another company will give you a better rate, call your current company and see if they're willing to price match. That way, you can keep your current auto insurance company and still pay a lower premium.

3. Save Money On Your Mobile Phone

Another household expense that you can lower is your mobile phone bill, though most people don't realize this. Here are four ways to cut back on cell phone bills.

  • If your phone is more than a year or two old, paying insurance on it doesn't make sense. That can save you around $10 a month, or $120 per year.
  • Another cost that adds up is financing a new phone. When you're ready to replace your phone, get a phone that isn't cutting edge. A phone that's even a year old can cost hundreds less, which is a lot friendlier if you're on a strict monthly budget.
  • If you're not using your cell phone plan to its fullest (talk, text, and data), use a less expensive plan. Using more basic plans can cut down on your bill by up to $30 or more per phone per month.
  • Lastly, if your provider offers you a “free phone” in exchange for you staying with them, you're still paying for that phone via them charging you for an expensive plan. Don't stick with a phone company because they're giving you a “free” phone, because it's not free at all. Stick to low-cost plans and use your own phone whenever possible.

The next three I'm going to discuss are utilities and how you can drastically cut your household expenses with them.

4. Lower Your Heating Bill

If you're looking for ways to budget and save, look no further than your heating bill, particularly if you live in a colder area. For heat, adjust the thermostat and wear a sweater when it's chilly inside.

We have a furnace for heat and cut our propane bill nearly in half by lowering the thermostat by 5 degrees. Considering it costs us $250ish per fill-up, filling up less often in the winter is great for our wallet.

A household expense like heat is often overlooked, but in the dead of winter, your heating bill can be costing you a ton. I know it was for us!

[UPDATE November 5th 2020]: My wife and I recently learned that our air conditioner units, which also can be set to heat, are effective all the way down to an outside temperature of negative 4F. We had been under the impression that they only worked down to freezing. This means we can save even more on propane by using our heating units.

What does that mean for you? If you have alternative heater units, such as an HVAC system, you might be able to save extra money by using that over gas or oil.

5. Cut Back On Electricity

For a monthly expense like electricity, turn off lights when you're not using themTurn off your computer at night. Some people even unplug devices and appliances that they're not using. Over the course of a month, you could drop your electric bill by tens of dollars just by turning things off.

Some electric companies offer a fixed monthly payment based on your average annual consumption. This an excellent way to budget and save on your electric bill in the months where you would normally use more power.

My wife did this when we had electric heating. Our spring, summer, and fall electric bill were a tad higher each month, but our winter electric bill was much lower.

6. Use Less Water

Water bill too high? There are many ways to reduce your water bill. Let's go over the highlights.

  • Use the dishwasher instead of handwashing: Dishwashers use less water than the average amount of water used when handwashing dishes. When in doubt, use your dishwasher with a full-load and save throughout the year.
  • Reduce shower time by 2 minutes on average: The average shower uses 5 gallons of water per minute. If you shower daily and save two minutes of water a day, you're effectively saving around 3650 gallons of water a year, which can greatly reduce your water bill annually.
  • Only run the washing machine when you have a full load: By running the washing machine only with a full load, you reduce how often you do laundry and therefore save water overall.

Saving on water every day will add up at the end of the year. It's quite possible to reduce your water bill by $50-$100 each year by cutting back on your usage. When it comes to reducing household expenses, $100 a year may not seem like a lot, but it all adds up.

7. Cancel Unused Subscriptions

This was a big one for me. Between the gym membership that I wasn't going to enough and various gaming-related (MMO subscriptions) and tech-related subscriptions and memberships, I was spending a lot that I didn't need to.

Review all of your monthly subscriptions and memberships and ask yourself if you truly need them. This is best done by reading over your bank and credit card statements. You're probably overspending on at least some of your subscriptions. Cancel them and save.

You could lower your monthly expenses by quite a bit if you really hammer out what you're not using anymore. My wife and I just recently saved $1200 per year by canceling four subscriptions we weren't using anymore. We did this with the app Trim, an app designed to automatically save you money across many of your expenses.

8. Use a Coupon App When Grocery Shopping

For example, when you go to the grocery store, you can buy store brand items, find coupons, or shop when items are on sale. Another tactic is always to make a shopping list and only buy what's on it, also known as meal planning. This prevents you from buying things you didn't specifically plan for.

A free app such as Ibotta will allow you to save money on groceries, and other commonly bought goods. Sign up for Ibotta for free and start saving.

Do you love shopping online? My wife and I save money all the time using Honey, an online discount app. With Honey, every time you reach a checkout on a website, you'll get discount coupons automatically applied, if they exist. Sometimes you'll save a dollar or two, sometimes much more.

You can also earn cashback with Honey. I totally recommend using the Honey app to save money with everyday online shopping!

9. Save With Public Transportation

When commuting, if public transportation is available, use it. Public transportation can save you a lot of money, plus it's much better for the environment (an added bonus!). You could also carpool to work and allow everyone to share the costs of a single vehicle (gas, tolls, etc.).

Additionally, riding a bicycle to local areas will save you mounds of money on gas and car maintenance. As a bonus, riding a bicycle is great exercise.

Public transportation isn't everywhere, however when it is available, it can truly save you money on everyday auto expenses. On top of that, riding a bus or train gives you time to catch up on some sleep, reading the news, or chatting with people via text.

10. Switch Home Insurance Providers

Similar to switching car insurance providers, look around for a better rate on your homeowners insurance. One place to look is The Zebra. Here, you can compare different companies side-by-side.

In the Summer of 2020, my wife and I saved $280 per year by updating our homeowners insurance! We did this by bundling our auto insurance with our homeowners policy and updating and removing options that fit our situation more accurately.

It's always a good idea to try to save on homeowners insurance every couple of years. All it takes is a simple phone call and you'll thank yourself later.

11. Create a Budget

I've been talking about lowering living expenses, but I haven't mentioned simply creating a budget. Why does this help reduce your monthly expenses? By having all of your expenses in one location, that is, a budget, you can identify yet even more ways to save.

When you're sticking to a budget, you lower other expenses that you may not realize you have. This could include how much you spend on going out to eat or on entertainment. If you're living on a low income, budgeting can be a lifesaver.

An Automated Approach to Saving Money

I recently heard of a website called Trim. How this site works is pretty simple. You sign up and provide information about all of your reoccurring bills that it supports. Trim will then negotiate these bills with your providers for you, and you'll pay an annual service charge equal to about one-third of what Trim saves for its average customer.

This is a great automated way to save money on bills without the hassle of calling each company and dealing with people individually. My wife and I recently saved $1200 per year by using Trim.

Further Details On Reducing Living Expenses

Ramit Sethi, a NYTimes best selling author, wrote I Will Teach You To Be Rich, which goes into great detail on how to save money and better master your finances. Check out his book to get even more great ways to reduce your living expenses.

What to Do With the Saved Money

These examples generally focus on saving tens of dollars each. When added together, you could save several hundred dollars per month. If you're familiar with the “Save $5 a day” challenge, you've just done that and more. Now consider putting that money in a savings account or pay off debt.

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Once you've started saving extra money, you can allocate that money elsewhere.

Get Our Simple Family Savings Guide

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I’ll also send you regular money-saving tips straight to your inbox.

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Don't have an emergency fund? Open up a bank account with a high interest rate and set some financial goals to buff up your emergency fund. What about a retirement fund? Open an IRA and start saving for retirement.

Most importantly, though, you can reward yourself for kicking butt and saving money by drastically cutting expenses. Spend a night watching YouTube or reading a good book. If you've saved some extra cash on the side, go out and have something to eat with a friend, loved one, or family. We can't be frugal all the time.

Wrapping It Up

Reducing everyday expenses is one way of saving more money each month. With this extra money, you can get yourself out of debt faster, save for the future, or reward yourself with something now. By reducing monthly expenses now, you greatly increase your long-term savings. With enough savings, you may be able to save upwards of $10,000 every year.

What other ways to save on common monthly expenses have you found?

Using these 11 simple life hacks you can reduce your monthly expenses by hundreds per month. Get started today!



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10 months ago

These are all great tips to lower your monthly expenses. We have ditched many subscriptions in our household and I also downgraded my phone plan. I’m often at home and use the WiFi for everything! Automation also helps because I’m scatterbrained at the best of times and the set-and-forget element s a lifesaver.

3 months ago

We tried to cut the cable cord but in order to get all the channels we wanted we needed several subscription services, so the savings ended up only being about $15 a month, and my husband found it so confusing going back and forth between the different services, he insisted we go back to cable. To his credit, he did stay on the phone for hours to get us the exact package we wanted at the starter price!

3 months ago

Man, I need to use some of these! Thanks for the reminders that I have to get on this, such a waste to keep cable and I’ve been meaning to shop around for insurance, too.

3 months ago

There are great suggestions! I need to look into Trim.

3 months ago

Great suggestions! You are correct, shopping around and bundling can save so much money when it comes to insurance. Shopping around for car insurance lead us to getting car insurance and home insurance through my a company my husbands company works with. We were already bundling home and auto but when we switched to bundling through my husband’s company’s preferred insurer, we saved over $100 a month!

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