Reduce Your Monthly Expenses: Realistic Ways to Cut Costs and Save Money on Bills and Living Expenses

Life is expensive, costing normal people about $56000 per year on average. This lofty figure doesn’t even include taxes, healthcare, or childcare! 

With the average cost of living skyrocketing, it’s more essential now than ever before to save money on living expenses. 

How to Save Money on Living Expenses

Saving money on living expenses isn’t as easy as the gurus would have you believe. Many of the tips offered are unrealistic for those already struggling. While renting out a bedroom on Airbnb can increase your income and help you afford life, most people don’t actually have extra bedrooms to spare, and those who do may not want to share their precious space with strangers. 

Another widely toted tip asks us to skip our morning coffee. While making coffee at home does save money, the paltry few dollars typically won’t make or break an income. A delicious coffee drink is often the only thing people look forward to each day, so who are we to take that one treat away?

There are far more realistic ways to save money on living expenses. 

Reduce Your Monthly Expenses: Saving Money on Bills

Living expenses include all the things we need for a happy, healthy life. They include things like housing, utilities, insurance, transportation, and food but don’t include fun extras like travel and hobbies.

Let’s dive into how you can save more money on the essential aspects of life. 

Cut Costs On Essential Utilities

We can’t escape the need to control our homes’ temperatures. We also need water, electricity, and internet. 

Finding ways to ways to cut costs on these essential services is crucial to reducing your overall spending. 

Summer Air and Winter Heat

Heating and cooling is one of the top budget busters. Whether you use electric or gas HVAC systems, the costs continue to skyrocket, and those living in warm climates dread the summer while Northern residents fear winter’s price surges. 

Insulation is critical to saving money on HVAC, whether you’re dealing with hot, humid summers or frigid winters. 

Maintaining a temperature outside your ideal comfort zone will also help. Set your thermostat a little lower than ideal in the winter and a little higher in the summer. Make up for the difference with clothing or fans to help circulate the air. 

Choose foods that help your body maintain its temperature in various weather conditions: stews and soups in the winter versus fruits and salads in the summer. 

Little things add up when it comes to saving money on heating and cooling. You’ll find that the small sacrifices are worth the massive savings on your energy statements. 

To recap, you can save money on heating and cooling by:

• Setting your thermostat a little higher or lower than ideal
• Insulating your home
• Use clothing and fans
• Choose foods that fit the temperature

Water and Electricity

Water and non-HVAC electricity usage also suck precious dollars from your bank account. 

To save money on these essentials, ensure you turn off all the lights and faucets when they aren’t in use. Choose cold settings for washing your clothes, avoid “browsing” the refrigerator, and unplug electronics when they aren’t in use. 

When shopping for new appliances, consider choosing energy-efficient models that will reduce your costs over time. 

These steps won’t save you a fortune on utility bills, but when every little cent counts, they can help.  As an added bonus, you can feel good about reducing your carbon footprint a tiny bit!

In summary, save money on water and electricity by:

• Turning lights and faucets off when not in use
• Limit “browsing”
• Choosing energy-efficient settings like cold water wash
• Purchase energy-efficient appliances

Investments To Reduce Energy Costs

If you have some money to invest upfront to save money on your long-term electric costs, consider solar panels or a whole-house fan.  

These options will save you money over time and are better for the environment overall. 

Non-Essential Utilities

Most of us still pay exorbitant amounts for cable television and the internet. Save money by cutting that cable cord. I haven’t had cable in over a year, and honestly, I haven’t missed it. 

Opt for cheaper streaming services like Netflix or Hulu. You’ll find there’s more to watch at a far lower cost.  

Save Money on Housing

Yes, I know, I made fun of the people who write about house hacking earlier. But, if you are in a position to do it, then it’s absolutely a great way to save money on living expenses. 

House hacking isn’t just renting out extra rooms. Although you could get a roommate to split some of the basic costs, you could also downsize to a smaller home or apartment or move to an area with a lower cost of living (also called geoarbitrage). 

Moving is a giant hassle, but a smaller place offers reduced rent and lowered utility costs. 

Not everyone is in a position where they can just move, and sometimes finding cheaper rent is a struggle even if you were. But, it needs to be noted that house hacking in some form is one of the best ways to save money on living expenses if it’s realistic for your current situation.

A lot of younger people are turning to alternatives for reduced housing costs. Van life, tiny homes, and communal living are all soaring in popularity due to the rising cost of housing. These are options to explore if you can’t afford a home in your area. 

The best ways to save money on overall housing costs are:

• Downsizing
• Living with a roommate
• Renting space on Airbnb
• Geoarbitrage
• Alternative Living Options

We All Have To Eat

Food is a massive budget buster, and with inflation, it seems to get more and more expensive with each trip. 

There are lots of ways to save money at the grocery store. You can clip coupons, compare prices per unit, use the store’s loyalty program, and choose generic offerings. Limiting unhealthy snacks and skipping sugar-laden soft drinks will also save you a bundle – and are better for your overall health.

To save even more, challenge yourself with a reduced food budget. Consider how you’d survive if you only had twenty dollars for food. The thought experiment might help you realize how much money you waste on groceries each month. 

Getting Help

If you’re truly strapped, consider going to a food bank. Numerous charities offer food to households in need. However, please don’t use a food bank if you can afford to buy your own groceries. 

Eating Out vs. Eating at Home

Eating at home is obviously much cheaper than dining out. When you have the time and energy, you should opt to stay home to save as much money as possible. 

However, we all have very busy lives, and sometimes it’s easier to go out to grab a bite than to cook something and eat at home. 

Mitigate this by allowing yourself some easy home meal options. Frozen pizza is far cheaper than delivery and just as easy. Premade skillet meals heat up in an instant, and frozen lasagna boxes are perfect for days when you don’t feel like cooking. 

For healthier options, cut up some cucumbers, tomatoes, and peppers to make wraps in less than ten minutes. Add a little hummus, olive oil, salt, and pepper for a divine dinner. 

Bring a sack lunch to work instead of eating out. A simple lunch consisting of a sandwich and chips costs about ten bucks per week – which is what one day of fast food would cost. 

Packing your lunch is a frugal choice that’s also better for your health. 

How To Save Money on Food

To recap, you can decrease your food costs by:

• Eating at home
• Using prepared meals
• Clipping coupons
• Buying generic
• Reducing soft drinks and unhealthy snacks
• Bringing your lunch
• Seeking help when you need it

Save Money When Going Out

No one needs to go out to eat to survive, so it’s technically not a basic living expense. However, sometimes we’re too tired to cook, and grabbing a bite elsewhere is the only option for feeding ourselves.

Unfortunately, enjoying a night out costs a lot of money. 

A great trip for reducing the costs of dining out is to forgo their beverage options and stick to water. Although many places offer free refills, the initial cost constantly creeps up. Most restaurants charge $2-3 for a soft drink, which adds up when you have a large group or go out often. 

Alcohol is one of the biggest budget busters. Servers ask if they can get you anything from the bar for a reason: the restaurant makes big bucks off your drink. You’re better off grabbing a six-pack on your way home. 

Portion sizes in the US are usually far too big for one sitting, so you likely don’t need to add an appetizer and dessert. If you insist on an appetizer, consider it in place of a full meal or splitting a main dish with your partner. 

Saving Money While Getting Around

Transportation is a must in this day and age. Most people in the US rely on cars to get around, as public transportation options are sparse outside of big cities. 

A Lower Car Payment

The new national average car payment soared above $700 at the end of 2022. With cars getting more and more expensive and financiers extending the terms of loans for longer and longer, it’s getting hard to get by without a hefty car payment.

But there are some things that you can do.

Cars decline in value the second they leave the lot, so opting for a used car is a great way to save money. However, good deals are getting harder and harder to come by, with the monthly payment for used cars reaching over $500 a month on average. 

Keep That Old Car

Far too many people trade in their cars well before they’ve paid off the loan. The new loan then gets bundled into the old, and they’re trapped in a never-ending cycle of debt and underwater car payments. 

Stop the cycle. 

Stop getting a new car every 3-5 years. Take care of your vehicle, and keep it for as long as possible. 

I’ve had my current vehicle since 2012, and it’s been paid off for about five years. I love it, and I’m going to take care of it and drive it until it can’t drive anymore. 

There’s no need to get a new car when my current car is in excellent condition.

Saving Money on a Necessary Evil: Insurance Rates

Insurance is a necessity in this world, and it’s the one thing we all pay for while hoping we never have to use it. 

Homeowners’ insurance, car insurance, and health insurance make up the bulk of our insurance expenditures, and there’s not a lot we can do to reduce costs. 

The only options are shopping around for better rates and tweaking your coverage amounts. If you have a hefty emergency fund, you may want to increase your deductible for monthly savings, but if you can’t cover a $1000 emergency, it might be better to pay a higher monthly premium for that peace of mind. 

Saving Money on Living Essential

Basic living expenses take up the bulk of our budgets, so it’s crucial that we make efforts to cut costs on them however we can. 

Not everyone can implement all these options, but most people can find one or two ways to save. With rampant inflation, every little bit helps.