How To Drastically Cut Your Expenses to The Bone

What would you do if you had to drastically cut your expenses immediately? As in today or tomorrow?

Where would you start with cutting expenses?

How long would it take you to actually see that dollar reduction from your reduced expenses?

I’ve read plenty about cutting expenses to the bone, after all I am a frugalista who loves an extreme frugal living tip or two.

But many tips focus on either how to save money on day to day expenses (easy when you know how to say no) or how to cut monthly expenses. And this is my issue.

You need to be able to both reduce expenses immediately if needs must AND know that your everyday expenses are already nice and low.

How do you radically cut expenses almost overnight? Just when you need to the most?

How to cut expenses today

Step 1 of reducing household expenses is working out what you can cut right now to save money.
We all have some slack in our budgets so there is money to be saved today.

Cutting Household Expenses

The 2nd step of getting your finances in tip top order is about planning for the worst and hoping for the best.
Finding ways to cut expenses at home and reducing monthly outgoings overall.

(This post contains affiliate links. If you click on a link and make a purchase, I may make a small commission at no extra cost to you. As an Amazon Associate I earn from qualifying purchases. You can read more here)

Part 1. How to drastically cut household expenses today

Problem – you need to save money and be cutting expenses to the bone, today.

Solution – follow these ways to reduce and minimize expenses, the easy way.

Slash your grocery budget

Your grocery bill is the most flexible part of your budget. You can spend a huge amount on groceries or get by on very little. So it makes sense to know what to cut from your budget because there are big savings to be made.

Go generic

If you aren’t already buying either your local stores own brand or the value brand then now is the time to do so. Generic and store brand groceries can be as much as 50% cheaper, if not more!

Stop eating out

Eating out or having takeout can do some major damage to your budget. The good news is if you cut back in this area you will be substantially reducing monthly outgoings, immediately.

Shop your pantry

Before you go to the store, always check what you already have in. You’ve bought it, spent money on it, so it makes sense to use this food.

Make a list

Shopping without a detailed list can be fatal to anyone’s budget (and I know this to my cost, too many times!).

Do yourself a favor and always make a list of exactly what you need (having checked your pantry first) and what meals you plan on having, then stick to your list when you get to the store.

Coupon wisely

Coupons done right save you money, coupons done wrong will cost you money. Only use coupons where you are going to save real cash.

A coupon for a branded product is no use if the generic product works out cheaper, even allowing for that coupon.

Bulk buy

One of the ways to reduce spending on food is to buy in bulk. When you find yourself on a restricted budget, bulk buying is not about blowing your whole budget in the first week.

But if you can find a deal on something (e.g. rice) then buy what you can afford, and only what you can afford.

Use online grocery services

If you are a sucker for every deal you see in the grocery store then doing your shopping online might be a great way to reduce expenses here, even if you do pay a couple of dollars for pick up or delivery.

The great thing about online groceries is you can see the total creeping up and make changes before you check out to keep within your budget.

Pack your lunch

You know it’s cheaper to pack your lunch rather than buying it each day.

Sure, it might add 10 minutes to your morning or evening routine, but when you are looking at cutting expenses to the bone, packing your lunch is a no-brainer.

woman calculating money to signify how to cut everyday expenses

Reducing monthly outgoings on Regular activities

Now is a great time to cut back on your busyness and reduce expenses you incur with all that activity. See how to cut back spending and save money with the following tips.

Reduce kids activities

If your kids have after school activities every night and at the weekend then they are going to cost you a pretty penny.

Have a chat with your child, be honest, and ask them which activities are their favorites and which can be temporarily dropped.

Free entertainment

It’s very easy to spend $100 on an evening’s entertainment when going out as a couple or a family. Find free things to do instead.

Look around your neighborhood, check your local community center, take a walk in the woods.

Helpful reading:

99 Super Productive Things To Do (Without Spending Money)

15 Free Summer Activities To Keep Kids (& Adults) Entertained

DIY your beauty regime

Keeping hair, body and nails polished can cost a few hundred dollars if you insist on salon treatments.

Go DIY, use YouTube for help in creating your perfect hairstyle or link up with friends for a pampering session. I’ve cut my own hair for so many years now, I cannot calculate how much I have saved.

Do your own garden

Gardening and yard work are the perfect way to have both some gentle exercise and fresh air. Why pay someone else to do these tasks?

When your mindset is about drastically cutting expenses to the bone it makes sense to stop outsourcing this tasks and do them yourself.

pink piggy bank upside down in water leaking money to signify the need to cut expenses to the bone

Cutting monthly expenses to the bone

Some of your monthly expenses cannot be disappeared completely but you can certainly cut them down.

It’s very easily for your regular bills to creep up without you knowing so take some time and work through these key bills to ensure you are getting the best value.

Useful reading: How To Cut Monthly Expenses: 35 Ways To Save Money

Cut Cable

As someone who still has cable I do not say this lightly, but cutting expenses to the bone requires you to make some hard choices.

Luckily there are plenty of streaming and other options to get your TV fix so cutting cable when you are in a tight spot makes sense.

As much as my hubby loves his sport he knows that cable will be the first thing to go if we hit a tight spot. I’ve cut it before and won’t hesitate to do so again if needs be.

Cancel subscriptions and memberships

When you need to drastically cut spending, you need to make some drastic decisions. Memberships and subscriptions are often a want not a need so ask yourself these 2 questions:

  1. Do I get great value from this service (or product)?
  2. Do I really need it or can I do without it for now?

Cancel any that fail these questions. An even better way is to get TRIM to handle the cancellation process for you. Trim is a virtual personal assistant that constantly works to save you money.

Downgrade your phone plan

Phone plans come in all shapes and sizes and costs. When needs must you can save money by downgrading the amount of data and minutes you are paying for.

Even better, if you are out of contract, seek out a better sim only plan and forget the upgrade.

Get a better broadband deal

Cutting back on your monthly bills can save you a fortune. The majority of people in the UK don’t compare their broadband deals when their contract is coming to an end. Broadband checkers can save you money as they allow you to find deals specific to your area.

Cut home energy bills

This is something you can achieve by taking small actions each and every day. Reduce your thermostat, turn lights off, wear extra layers.

Small tiny actions to reduce costs. For more help in cutting your energy bills check these posts out:

How To Save Electricity Doing Absolutely Nothing

How To Keep Your House Warm In Winter And Save Money

woman in pink tip using a calculator with a pink piggy bank on desk with other paper items to signify how to cut expenses drastically

Challenge yourself to drastically cut living expenses

You are in control of your money so you can make a difference in how much you spend. But who doesn’t need a little help in actually doing this?

This is where setting goals and personal challenges can be so effective.

No spend days

I find that no spend days are a perfect way to focus on not spending. The best thing about them is that they are only for one day.

You don’t need to stock up before having a no spend day and you can have them multiple times a week. The more no spend days you have, the more money you save.

And yes a no spend day is exactly what it says – no spending on ANYTHING – it’s only 24 hours.

Fun Money

Giving yourself a small allowance, or fun money, helps you when you are focused on drastically cutting your expenses.

Without fun money you are much more likely to end up spending money you don’t have on things you don’t need.

Give yourself some guilt-free fun money (it could be just $10) to spend on whatever you want.

cut spending

As focused as you are on cutting everything to the bone it can help to have some tricks to help you cut back on your spending.

It’s all too easy to start spending and then carry on, until you realize you’ve racked up another $1000 on your credit card.

Create spending pauses

Spending pauses are about creating a gap between your thoughts on buying something and the act of actually doing so.

The 30 day rule is the big one. See something you like? Press pause for a whole 30 days before you consider again whether to buy it. Hard to do.

7 day or 72 hour spending pause. These are easier to achieve and perfect for small spends e.g. anything under $100.

3 month clothing ban

Buying new clothes every month might be a fun activity to do but you don’t need new clothes every month. A short ban on buying new clothes is a great way to save money.

Hide your credit cards

Taking your credit cards with you wherever you go means you can give into the temptation to buy something you see immediately.

Go out with the intention of not buying and leave your credit cards at home. Some people will go further and freeze them in a block of ice!

Come and follow me on Pinterest for more money saving hints and frugal tips!

pinterest image for how to drastically cut expenses

Part 2. How to lower monthly bills

All of the above cost cutting tips are actions you should consider taking when you find yourself in a very tight money spot.

The 2nd part of drastically cutting expenses is about planning ahead for the bad times, when times are good.

If you keep your monthly expenses low even in good times, you are setting yourself up for success should the worst happen.

Why you should keep household costs low

Don’t think your income would stop overnight? Look at what can happen:

Never mind the risk of an accident, an illness requiring a long period off work or even worse, a pandemic!

How would you cope if anything like this happened to you?

I do of course hope you have an emergency fund, but maybe you are spending all your income, living paycheck to paycheck?

And you may already have worked out a survival budget, one where you are cutting expenses to the bone to reduce your outgoings as much as possible.

It’s your survival budget I want to focus on, more specifically how quickly you can get up and running with it.

Financial Commitments

Think about all the different financial commitments you have, specifically those financial contracts you have taken out and signed on the dotted line for. Contracts like:

  • Mortgage or rent
  • Loans
  • Cell phones
  • Gym membership
  • Car finance
  • Utility bills
  • Credit card repayments

Invoking your survival budget and cutting expenses to the bone would involve you:

  1. Eating out less or not at all
  2. Buying cheap food
  3. Finding free entertainment
  4. No clothes being bought
  5. Following all the tips above to cut your expenses

But what about those financial commitments you are contracted to pay every month or risk having a default flag on your credit report?

Many people take out car finance over 5 years to keep the monthly cost low. Personal loans over 3 years or more are commonplace.

How would you get out of those contracts part way through if you had to drastically cut your household expenses?

You can’t.

Not tomorrow and probably not within a short time frame.

Sure you might be able to sell the car. But what if you are underwater on the finance? And you still need the car to get to work.

Not going to work is it?

Fear not, there are things you can do in advance to help. What you need is a ready made plan in place.

A plan on HOW you’re going to cut your expenses, not the expenses you’re going to cut.

the word planning in a notebook - for how to drastically cut expenses

How To Drastically and Successfully Cut Your Expenses

The answer to HOW to cut expenses is to have planned it in advance. It absolutely is not planning what to do WHEN the sh*t has already hit the fan.

No, it’s thinking about where you would be if your income dropped significantly overnight and working backwards to practical steps you can take today.

Think about all the financial commitments you have and think how you can cut them now.

The less commitments you have, the easier it is to cut your expenses to the bone.

save into an Emergency Fund

First things first. Ensure that the cash you have stashed away for an emergency is just that. Cash.

Readily available at 24 hours notice in an easy access cash savings account.

Not locked away in a share scheme or an investment account. I know you don’t earn very much on cash savings but you need ready, easy access to this money.

find ways to Reduce Lifestyle Creep

When you got your last big pay rise or promotion, what did you do with the extra income you received each month?

Lifestyle creep is where, as your income rises so does your living costs. Next time you get a pay rise, don’t let it get swallowed up by daily spending.

Put it toward one of your financial goals and keep your living costs that little bit lower.

Having a few no spend days can help you refocus your spending habits.

Too many expenses? Reduce them

Here’s how my normal budget and survival budget compared a few years ago. Notice how few monthly financial commitments we actually have.

table of 2 different budgets - to show how to drastically cut expenses

(NB. I’m in the UK so no medical insurance)

When you have too many expenses you have bigger monthly outgoings and more financial commitments that you could find hard to cut back on..

Keeping commitments to a minimum helps you to not only budget for the tight times but also to live within your means in the good times.

Pay insurance Annually

Many annual bills are actually paid monthly. Some with an extra interest charge of course.

Car insurance, house insurance, TV licence, car tax, all can be paid for monthly or in a lump sum.

In my budgets above you can see monthly payments for 5 annual insurances (life, house, car, van and pets).

We now only pay monthly for pet and life insurance as there isn’t an annual option.

The other insurances are all paid annually, thereby reducing our monthly budget by a further £105/$133.

Pay annually, upfront, and keep your monthly outgoings down low.

To save enough money to pay for these items annually we have sinking funds.

The great thing with sinking funds is that you save the same amount every month and use what is in your sinking funds as and when you need the money.

No need to resort to your credit card.

consider Stockpiling Non-Perishable items

Building a pantry stockpile of non-perishable items such as:

  • canned food
  • toilet paper
  • toiletries
  • pasta
  • rice
  • coffee, tea and sugar
  • laundry detergent

can really help in the first few weeks when you are working out how to cut your food and household expenses.

The secret to making a stockpile work is to rotate the goods on a regular basis.

Related post: 30 Of The Best Cheap Foods To Buy When You’re Broke

Don’t Upgrade Your Cell Phone

Every time you upgrade your phone you are locked into a new financial contract. Upgrading does not equal getting a free phone.

You are paying for the new handset via that monthly contract.

Instead of upgrading, let your contract lapse. Check your data and minutes usage and find a rolling contract that covers these.

With rolling contracts not only will you pay less every month, if needs be, you can give 30 days notice and get rid or reduce the tariff again.

pile of bank note rolls - for how to drastically cut expenses

Pay Off Your Debt

Carrying debt means you are carrying a monthly commitment you cannot afford to default on for many months or even years.

Car loans, credit cards, store cards, even mortgages, all are debt. The less debt you have the lower your monthly commitment is.

Increase your debt repayments now, find spare money by reducing your budget in other areas.

Consider paying off your mortgage early, not just credit cards and car loans.

We paid our mortgage off 10 years early and it was like a huge weight lifted off our shoulders.

From that point on I knew we could drastically cut our household expenses if we ever needed to.

Because that big monthly mortgage payment was no longer there.

Related post: 15 Things We Gladly Gave Up To Become Mortgage Free

Know Your Wants And Needs

Being very clear when the going is good about what is a necessity for you and what is clearly a want, will help you enormously should you have to radically reduce your spending overnight.

Using the 30 day rule will help you crystallize your understanding of wants and needs.

Knowing the difference between your wants and your needs means you can cut all wants straight out without agonizing over their correct category.

Insure Your Income

This comes at a financial cost but taking out income protection insurance can reduce your risks of suddenly trying to live on nothing.

With income protection insurance you do not need to be so drastic about cutting your expenses as the insurance will pay out just when you need it most.

It’s not cheap, but if you have high outgoings and a decent income it can stop your worrying about money and give you breathing space to get back on your feet when the difficult times hit.

money notebook with dollar bills - how to live on one income

Update Your Resume/CV

When I moved from one employer to another after 29 years it was a complete pain to create a brand new resume. Using a resume builder proved so useful for me!

I was lucky because I was looking to move to another department within the UK civil service so I didn’t need a proper resume, only a 1 page short version. It still took me ages.

Hunting down old certificates, trying to remember which year I did what. Ages!

If you get hit with a job loss overnight the emotional fallout from that alone will make it very difficult for you to update your resume quickly.

Looking for another job is time consuming enough without have to start from scratch on a very old resume.

Keep it updated with each new career high e.g. internal promotion, new professional qualification.

Get A Second Job

Having a second income is a great way to self insure against the massive impact of losing your main income.

It could be a money making hobby, a second career or something you do a couple of nights a week.

Have Readily Available Credit

Cutting your expenses to the bone doesn’t always mean you’ll be able to live extremely cheaply, you will still need money.

Your emergency fund is one income stream. But having a second backup in the form of credit is useful.

Especially as lenders do not like to lend to unemployed people or those with very little income.

As an example some credit cards require a minimum income level to apply.

Keeping a credit card with no outstanding balance or another line of credit is a good idea. They can be your back up plan.

They don’t stop you needing to drastically cut your expenses but they give you flexibility when coupled with the other steps above.

You may also like:

How To Use Equity Release To Pay For Home Improvements

dollar bills planted in soil

How to drastically cut expenses to the bone successfully

Prepare for the worst and hope for the best.

Taking action now to plan how to drastically cut your expenses puts you in a very strong financial position.

One where perhaps you won’t ever need to invoke a survival budget but knowing you can and be successful with it makes for a good nights sleep.

Reminder of the steps to take:

  1. Cash emergency fund
  2. Stop lifestyle inflation
  3. Limit monthly commitments
  4. Pay annually
  5. Build a stockpile
  6. Don’t upgrade your cell phone
  7. Pay off debt
  8. Wants vs. needs
  9. Consider income protection insurance
  10. Update your resume/CV
  11. Have a second job
  12. Have readily available credit

Follow these steps and get your finances organized so that IF you had to, you could drastically cut your expenses overnight and with great success.

Good luck!

pinterest image for how to drastically cut expenses

Last Updated on 26th October 2022 by Emma

About Emma

I'm here to help you become confident in making the best money decisions for you and your family. Frugal living has changed my life, let me help you change yours.

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