Top 20 ways to reduce monthly expenses

Unless you’re fortunate enough to be one of the super rich, it doesn’t matter where you find yourself in life – everybody wants to save money. Reducing your monthly expenses in a methodical and organized manner is a fast and relatively easy way to stabilizing your finances, rebuilding your credit record, paying off your debts and putting yourself in a position where you will actually be able to save money.

But to reduce your monthly expenses you need to adopt a disciplined mindset. Cutting things haphazardly or on a whim without working out what you need to live on and to satisfy any of your commitments will put you on the fast route to resentment, impulse spending simply to “cheer yourself up” and, potentially, an even worse financial predicament than the one that caused you to think about making savings in the first place!

So, before you start making savings without thinking things through properly, take the time to read our top 20 ways to reduce monthly expenses:

Put everything down on paper

List all of your fixed outgoings and income either in a book or using spreadsheet software. Include everything – mortgage or rent, credit card payments, phone bills, electricity, etc – in one column and all of your income in another. Add it up and subtract your expenditure from your income.

Record other spending for a month

Keep all of your receipts whenever you spend money. Add these to a third column in your budget for a month and then add this to your other fixed outgoings. Getting close to your income or, even worse, already in negative territory? Then you need to read on to make savings.

Cut out the ‘little luxuries’

Can’t do without that caramel macchiato in the morning? Or the expensive sandwich at lunchtime? Start making a flask of coffee before you go out and a packed lunch and you’ll probably start saving yourself more than £10 a day – that’s £200 a month if you work a five-day week.

Stop shopping for labels

Don’t be taken in by designer brands on special offers – you can do better elsewhere. Go online and find last season’s line-up for a fraction of the cost of the latest designs. Better still – learn to mend your own clothes or visit charity shops in upmarket parts of town where the well-off take the clothes that they’ve grown tired of.

Switch your utility suppliers

Electricity and gas companies milk their loyal customers. It’s perverse and unfair but a fact of life. Always try to switch to another every year and give your current supplier the opportunity to better the price you’ve been offered.

Don’t let insurance companies automatically renew your policy

Four weeks before your car insurance is up, you’ll get a renewal pack from the insurer. It’s likely that your premium is simply going up because that’s how these organizations make their profits – by relying on their existing customers doing nothing. Shop around, you are almost guaranteed to find a better deal.

Walk or cycle

Stop taking the car two minutes down the street. Using a vehicle for short periods increases engine wear and uses proportionately more fuel than longer trips. Walk or get on your bike – you’ll get fit and save money at the same time.

Buy supermarket own brands

You may only save 10p on a jar of yeast extract compared with Marmite, but add all of these items up in a weekly shopping basket and you will have saved yourself pounds if you stick to the supermarket’s own brand equivalents.

Buy from a greengrocer or farm shop

You’ll save money if you buy your fruit or vegetables from a local supplier. Better still, if you’ve got a local vegetable box supplier, order a regular one and make use of everything in it.

Plan your meals

So many of us are too busy to prepare our own food so we resort to ready meals and takeaways. These are much more expensive than planning your own food and preparing it in advance – at the weekend, say – and putting it in the freezer.

Drink less

All the most recent advice has highlighted the damage that alcohol can do to your health. But it also can be very bad for your bank balance with beer at up to £5 a pint and a half-decent bottle of wine costing in excess of a tenner. Drink one of those a day and that’s more than £280 a month.

Reduce your overdraft

A bank overdraft is one of the most expensive ways to borrow money. And so long as it’s there, the temptation will always be to go into the red. If you have a good month, reduce or cancel your overdraft altogether to get rid of the temptation in the future.

Sell, sell, sell

If it’s stuck in your attic, the chances are that you haven’t and won’t ever need it. Sell it – either at a boot fair or on eBay. Any vintage or unusual items could possibly be worth more than you realized.

Find somebody to share the journey to work with

Driving solo to the office is expensive and bad for the environment. If you work with people who live within a certain distance of your home, arrange a car pooling scheme on a route so that you can share the cost.

Cut down on cleaning products

Oven cleaners, sink cleaners, floor cleaners … the list goes on and there’s a new product on the shelves every week. The margins on these products are very high and it’s you that is paying them. Learn about the financial benefits of cleaners you can make yourself which are just as effective – Google hydrogen peroxide, white vinegar and baking soda.

Put in LED or energy saver light bulbs

The average LED light bulb uses 20% of the energy that a halogen bulb does. Energy savers are similar. When a light bulb blows, don’t replace it like-for-like – an LED bulb will cost you more but will use a fraction of the power and last for thousands of hours longer.

Don’t leave things on standby

Laptops, TVs, dishwashers, washing machines – they all have that flashing light. That means they’re off, right? Wrong – that means they are on standby and still consuming power. Turn them off at the switch or at the wall if necessary. Over a year, you’ll save yourself three figures in electricity bills.

Pay in cash

Set a weekly incidentals budget and take that money out at the ATM. Stick to it when you’re tempted to go out and grab lunch or an expensive coffee. This is one of the most effective ways to introduce financial discipline.

Only wash clothes on dry days

It may sound extreme but think about how much power the tumble drier uses – it’s probably the least efficient white good in your house. If you know that the weather is going to be dry on Tuesday, put your clothes in the washing machine overnight and hang them out in the morning to dry. They will smell nicer, too.

Keep your old phone

Get a sim only mobile phone deal and save potentially hundreds of pounds a year. Those deals with a phone upgrade may look cheap but they aren’t – the network is making a fortune on top of the calls and texts that you actually make.…