11 Ways to Drastically Cut Household Expenses

When you’re deep in frugality mode, no expense is too small to go under the knife.

Learning how to drastically cut expenses and being ultra-conscious of what you’re spending is a great way to stretch your income or add to your savings. 

As an added bonus, drastically cutting expenses also gives you practice living without certain things, so you gain the skills and discipline to avoid lifestyle creep and grow your wealth even when times aren’t lean.

How to Drastically Cut Expenses in 12 Ways

Here are 11 methods for how to drastically cut expenses. 

1. Get a Dirt-Cheap Phone Plan

If you’re usually spending time in places with wifi, you can potentially save hundreds of dollars a year by going to a phone plan with little to no data. 

For instance, with a plan from Tello Mobile, you can pay as little as $5/month for a plan without data—or add a gig or two for under $15. 

2. Watch TV for Free

Whether you have cable or subscribe to a streaming service like Netflix or Hulu, it’s an expense that could be cut out. Try switching to one of these free Netflix alternatives. The only downside is that you’ll usually have to deal with ads. Another free option is to check out DVDs of movies and shows from your local library.

3. Audit Your Food Budget

Food is one of those expenses that can add up faster than we realize. From a weekly takeout night to fast-food stops to a daily gas station snack on top of grocery essentials and splurges, there are a lot of ways to waste your budget on food (and you’re biologically primed to want to do it).

Meal-prepping cheap lunches and dinners can save you a ton of money (and even time, if you cook big batches of things at once). Rely on cheap staple foods like rice, beans, pasta, and frozen veggies as the base of your preps. 

4. Move to an LCOL Area 

Housing is one of the biggest single expenses you’re likely to have in your life, so when you’re thinking about how to drastically cut expenses, it makes sense to look there.

The cost of mortgages or rent can be extremely different based on the area you’re looking in. Coasts tend to be more expensive than inland areas, cities cost more than rural areas or suburbs, and costs can vary based on how attractive a neighborhood is. 

Making your home base in a LCOL (low cost of living) area gives you a lot more wiggle room in the budget and lets you stack up savings. It’s not without compromises—LCOL areas may be cheap because there’s a reason people aren’t competing to live there. Consider career opportunities, infrastructure quality, recreational options, distance to stores, etc. before making the plunge.

If it’s not possible to move to an entirely different area due to your job, family, or other factors, think about other ways to minimize housing costs. You could rent a room to a permanent tenant, offer a temporary rental on Airbnb or Couchsurfing, downsize to a smaller space, or purchase a duplex and rent one side to help cover costs.

5. Stick to Free Hobbies

Life is about more than working and saving money, but you don’t have to spend a lot to enjoy yourself. Just adopt free hobbies instead of making plans that cost money! Hiking, photography, and reading books from the library are my personal favorites. Check out these 20+ fun free things to do for more ideas. 

6. Cancel Subscriptions 

Subscription expenses can be sneaky. You’re automatically paying a certain amount every month, potentially without even remembering the things you’ve signed up for. We already covered streaming services like Netflix and Hulu, which are certainly two of the most common. 

Next, think about:

  • Amazon Prime (which might also encourage you to buy things you don’t need)
  • Spotify/another music service
  • Physical newspapers/magazines (they still exist)
  • Paid email newsletters (e.g. for travel deals when you’re not traveling as much)
  • A monthly VPN for your computer
  • Meal kits like Blue Apron
  • Other physical item boxes like BarkBox, DollarShaveClub, and Stitchfix

It’s hard to think of any subscription services that you actually need every month! If you feel like you have subscriptions you’re forgetting, check your credit card or bank statements to catch those expenses.

7. Sell or Downgrade Your Car

When you want to drastically cut expenses, you can’t think of a car as a luxury or status symbol. Think of it as a way to get from point A to point B—ideally, as cheaply as possible while still being safe. 

If you’re a two-car household, see if you can live with one. If you live in a walkable/bikeable area with decent public transportation, you could even make it work with no car, which also saves you gas and insurance costs. 

Otherwise, focus on getting an affordable, reliable used car like a Honda or Toyota, which offers good gas mileage and few mechanical problems.

8. Be Conscious of Water and Energy Usage

If your electric and water bills are higher than you’d like, you can help save your wallet and the planet by conserving them both when possible.

Take shorter showers, remember what your parents always told you about turning lights off when you leave the room, use energy-efficient lightbulbs, insulate your house well to save on heating and air conditioning costs, turn off power strips and unplug chargers when they’re not in use, and so on. 

9. Kick Unhealthy Habits

Cigarettes, fast food, and alcohol add up fast to your budget and don’t do anything good for you. Investing in your health can save you a lot of money and stress over time. In the short term, you’re saving $5-$25+ every time you resist temptation.

The same can apply for sugary coffees or energy drinks. (Take it from a fellow caffeine addict—I’ll get a coffee somewhere now and then, but I’ve mostly switched to 100mg caffeine tablets instead.)

10. Use Cash-Back & Coupon Apps 

There are some expenses you just can’t cut, like food, car maintenance (e.g. new tires), etc. For those, you should always check on cash-back and discount sites or apps. Using as many different programs as possible lets you maximize your savings. 

A few of my favorites: 

  1. Rakuten for cash back at hundreds of common stores
  2. Honey to automatically try coupons at checkout and apply the best discount
  3. Ibotta for in-person grocery rebates
  4. Dosh for automatic rebates that you don’t even have to think about (just link a card) 

11. Be Smart With Credit Cards 

Credit cards can hurt you, or they can help you. They can hurt if you let credit card debt pile up and constantly accrue interest. But if you use credit cards wisely, you can earn extra cash back or save up travel rewards for future trips. 

In the context of how to drastically cut expenses, I’d recommend a card like the Chase Freedom to get 5% cash back on certain categories and 1% on all purchases, plus a $200 signup bonus. 

When you combine all these methods to drastically cut expenses, you can be confident you’re living as frugally as possible. What you do with that saved money is up to you, but if you find yourself with some extra, consider learning how to invest so your money compounds over time.

12. Use rainwater harvesting

Rainwater harvesting is an eco-friendly and cost-effective way to reduce your household water expenses. By collecting and storing rainwater, you can use it for various non-potable purposes, such as watering your garden, flushing toilets, and even laundry.

To implement a rainwater harvesting system, you’ll need to install gutters and downspouts on your roof to direct the rainwater into a storage tank or barrels. Adding a filter or screen to the system will help keep debris and leaves out of the collected water. It’s also important to ensure the storage tank is covered and sealed to prevent mosquitoes and other pests from breeding in the water.

For a more advanced system, consider installing a pump and a proper filtration system to further clean the water for use in your washing machine or to flush toilets. This can significantly reduce your household’s consumption of municipal water and lower your water bill.

If you’re looking to supplement your income so you won’t have to scrimp and save quite as drastically, check out these 110+ side hustle ideas.

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