21 Simple Ways To Reduce Your Cost Of Living

By Zach Buchenau

Last Updated: January 8, 2021

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How to reduce your cost of living | Be The Budget

If you want to achieve your financial goals as fast as possible, one of the best things you can do is reduce your cost of living.

I mean, have you ever taken the time to add up how much money you are spending each month on necessities like food, utilities and housing costs? It can be exorbitant. But, these areas of personal finance are often the most difficult to reduce your spending.

So, for the rest of this article, I am going to do my best to help you find ways to cut your cost of living, and achieve your financial goals at light speed.

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1. Get On A Strict Budget

The very first step you should take when trying to reduce your cost of living, is to get on a strict personal budget. This will help you wrap your head around your spending habits, monthly income, and overall financial situation.

Beyond that, budgeting also helps you create a roadmap to every one of your financial goals. I can’t understate how critical this is.

Though, you can’t just create a budget once, and expect it to work any wonders in your life. Rather, if you want to actually see the benefits of budgeting take effect in your finances, you need to make it a daily habit. Seriously, every single day, you should reconcile your budget with your bank account, and make sure every expense aligns. This will keep you in-tune with your expenses, and your eyes open to areas where you can reduce your spending.

There is a reason I put this tip at the top of the list. I am convinced it is the most important thing you can do if you want to reduce your cost of living.

2. Take Better Care Of Your Stuff

I am constantly amazed how people treat their stuff these days. Whether it’s their car, their home, their clothes, their cell phone, or just about anything else that can be bought, people just don’t seem to value their stuff enough to take care of it and make it last.

I think you will find that if you really commit to taking care of your things, and really doing your best to make them last, the less money you will spend in the long run.

For instance, if you own a car, it is much better to keep up with oil changes and regular maintenance, than to shell-out a massive chunk of change when your car breaks down.

As my dad always told me, “it’s easier to keep clean than to make clean.”

And guess what, it’s cheaper, too!

3. Get Out Of Debt

If you are looking for ways to reduce your cost of living, and you are making monthly debt payments on anything at all, then getting out of debt should be at the top of your list.

This is one of the most difficult tasks on this list, but it is by far the best way to add some financial margin to your life.

I should know. Not too long ago, my wife and I were were paying nearly $1,000 a month for a variety of stupid debts we had dug ourselves into. Between credit card bills, car payments, and a few other things, our cost of living was way too high.

So, we went all out, “scorched earth” on our expenses, and 6 months later, we were completely debt free. Trust me, that extra $1,000 is our monthly, positive reinforcement to never go back into debt again.

If reducing your cost of living by getting out of debt is something you are interested in doing, be sure to check out our Free Debt Snowball Calculator, as well as the following posts:

4. Stop Dining Out

When my wife and I were getting out of debt, one of the biggest expenses we cut from our budget was restaurants. Instead of dining out for just about every meal, we decided to make a weekly grocery run, and cook every meal at home. And boy did it have a positive impact on our debt-free journey.

When we eliminated restaurants from our food budget, we added about $500 of monthly margin to our life. That alone saved us nearly two months on our debt payoff timeline.

So, if you want to reduce your cost of living, you should stop dining out. If you are like us, you will be amazed by how much this improves your financial situation.

5. Go Crazy For Leftovers

Along the same lines as cooking all your meals, you should try to make dinners that result in at least a day of leftovers. If you can take care of both your dinner and your lunch the following day in one fell swoop, then you will really experience the joy of a home-cooked meal.

Think about it, if you can get at least one lunch out of every dinner, then you just cut your grocery bill by an additional 33%. Hello, savings!

Related Post: How To Stop Wasting Money On: Food, Clothes, Travel and More!

6. Take Better Care Of Yourself

Paying medical bills is like pulling teeth for me. (Don’t get me started on paying dental bills to actually get teeth pulled.)

While I am extremely grateful to have such wonderful health care professionals, if I can do anything in to prevent a medical bill, then I am game. It might sound silly, but if I’m being completely honest, that’s one of my main motivations for working out.

If you want to reduce your cost of living, then do your best to take care of yourself. Eat well. Work out at least a few times a week. And wash your freaking hands after you use the bathroom!

7. Find Cheaper Car Insurance

If you feel like your car insurance payment is a little high, then you are probably right. So, don’t be afraid to shop around for cheaper car insurance.

Think about it like this, if you can even reduce your car insurance payment by $10 per month, then you just saved yourself from paying an extra $120 per year.

If you want to make sure you’re getting the best possible rate on car insurance, I highly recommend getting a quote comparison from Insurify. With Insurify, you can compare auto insurance rates, discounts and payment options from dozens of top providers in less than 2 minutes. Seriously, it is one of my all-time favorite online tools!

Click Here To Compare Car Insurance Quotes On Insurify

8. Stop Upgrading Your Phone

I am amazed how often I hear people say they need a new phone. I have even heard people say that to someone while they are talking on the phone! Ahem, if your phone isn’t working, then who are you talking to?

I know that in this day and age, it feels like you should get a new phone every couple years, but you really don’t.

If you just take great care of the phone you are currently using, it should last you at least 4 or 5 years before it decides to stop working. And with phone prices reaching upwards of $1,000, this little tip could save you, big time.

9. Move To A Less Expensive Place

If you are paying rent, or a mortgage, I’m willing to bet that is your biggest monthly expense. And if it is more than 25% – 30% of your take-home pay, then you might want to consider moving to a new, cheaper residence.

I realize this might be a daunting, seemingly unrealistic tip for a homeowner, but this article is all about reducing your cost of living. You don’t need to take this tip. It’s just a great way to free up some monthly cash flow.

This is a significantly easier undertaking if you are a renter. Just wait for your current lease to expire, and then find a cheaper place to live.

If you are willing to sacrifice some amenities in order to spend a few hundred dollars less each month, then moving to a less expensive place will save you thousands every year.

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21 Simple Ways To Reduce Your Cost Of Living | Be The Budget

10. Say Goodbye To Cable

If you want to reduce your monthly cost of living, then I suggest cutting cable from your budget. This is one of the best things my wife and I ever did. Not only did we stop having to pay that bill, but we aren’t bombarded with political ads, and depressing news stories.

Now, I’m not saying you should cut television from your life — although, there’s probably a lot of benefits to that. I’m just saying you should consider replacing cable with a streaming service like Netflix or Hulu.

Oh, and if you want to stream your favorite shows on your tv — but you don’t have a smart tv — then just go get yourself an Amazon Firestick, or a Google Chromecast. These are much cheaper options than cable.

11. Use Cashback Apps

If you have never read any of the posts on this blog, you should know that I love getting cash back. However, you should also know that my wife and I never spend money on credit cards — ever. After how much struggle we went through to get out of debt, we vowed to never use credit cards again.

The problem is, since we only spend money using our debit cards, we had to find other ways to get cash back. So, we use Rakuten and Dosh. These two apps allow us to get cash back on all sorts of purchases, without the burden of debt.

12. Buy Refurbished Instead Of New

If you have ever unboxed a brand new iPhone, or taken the plastic screen protector off a brand new computer screen, you know how satisfying it feels to purchase something new. But if you want to reduce your cost of living, you should opt for refurbished electronics instead.

The only real difference between refurbished and new, is that there might be some cosmetic problems. For example, if you buy a refurbished phone, there might be a scratch or two on the back. However, the phone will still work just as well.

I have personally been using a refurbished iPhone for the past 2 years, and it is better than my previous phone, which I got brand new.

Buying refurbished is a great way to get quality electronics at a cheaper price.

13. Go On A Financial Diet

How many times have you — or someone you know — said, “I want to lose 15 pounds before summer”? Now, how often have you ever heard someone say, “I want to reduce my expenses by $200 per month by next quarter”?

The latter is much less common. But, going on a financial diet is one of the best ways to reduce your cost of living.

You see, a financial diet is just like a physical diet. You just set a goal for your expenses, and work to reduce your expenses over a defined period of time. In other words, you work to trim the fat from your financial life.

The benefit of a financial diet, is that you aren’t just shocking your system in one fell swoop. Rather, you work to reduce your expenses over a longer period of time. Like getting in the habit of going to the gym every day, and learning to avoid unhealthy foods, a financial diet trains you to make better decisions, and form positive financial habits.

14. Get Term Life Insurance Instead Of Whole Life

I am not the world’s expert on life insurance. However, when I look at the cost whole life insurance in comparison to term life, I have a hard time understanding why someone wouldn’t choose term life.

According to Nerd Wallet, the average annual cost for a $500,000 whole life policy purchased at the age of 30 is more than 10 times the annual cost of a 30-year term life policy. Now, I don’t know about you, but I would rather pay for a term life policy, and put the rest of that money toward a Roth IRA, 401K, or even just an S&P 500 Index Fund.

15. Get A Wholesale Club Membership

Before my wife and I bought a wholesale club membership, I had my doubts about the value it would realistically bring to our life. But let me tell you, joining a wholesale club is well worth it!

Through our membership, we spend significantly less money on gas, food, clothes, and my most recent favorite, tires. Seriously, I am writing this article the same day that we purchased new tires for both of our family cars, and we spent nearly $500 less than we were planning to spend at a different tire store in town.

In addition to the phenomenal prices, the customer service is always excellent.

If you want to reduce your cost of living, you should definitely join a wholesale club.

16. Stop Leasing And Financing Cars

One of the biggest financial mistakes I ever made was leasing my truck. I was fresh off of a bunch of costly repairs to my previous car, so I foolishly decided that a consistent monthly payment would be easier to swallow. Boy was I wrong.

The high monthly payment put a 3-year strain on my finances, and kept me from building a significant amount of wealth. Then, like an idiot, I decided to finance the car once the lease was over. Can you say bad financial decision-making?

I don’t care how cheap the monthly payment on a lease or car loan is, if you want to reduce your cost of living, you should always save up and buy a car outright. Car payments increase your monthly cost of living, and restrict your ability to build wealth.

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17. Reduce How Much You Spend Alcohol

I am not ashamed to admit that I enjoy having a beer with my family or friends on occasion. But one thing I know about alcohol, is that it adds up. I mean, if you spend $20 on a six pack of beer and a bottle of wine each week, it adds up to over $1,000 per year.

Even something as simple as reducing the amount of money you spend on alcohol can help you reduce your cost of living.

18. Spend Less On Gas

I do not enjoy spending money on gas, but it is one of the most important things I spend money on. That doesn’t mean I should spend more than necessary on it though.

I already mentioned the discount you can get on gas through a wholesale club, but if you don’t have or want a membership to one of those, then you should go out of your way to find the cheapest gas in town.

So, I recommend you get the GasBuddy app. One simple search and you can find the cheapest gas station near you. I mean, if you can save $5 – $10 on every tank of gas, why wouldn’t you?

19. Know The Difference Between Wants And Needs

One of my biggest pet peeves is when somebody says they ‘need’ something when they actually just want it. For example, I love to buy tools. In fact, I can find a use for just about any tool on this planet. But I can promise you, no matter how much I want a tool, it is not a need.

I need to buy gas in order to commute to work. My wife and I need to buy groceries so that our family stays nourished and healthy. I need to pay our rent, utilities and insurance. Anything beyond that is really just a want.

If you want to reduce your living expenses, you need to know the difference between wants and needs.

20. Get Better At Couponing

I’ll be honest, couponing is not my strong suit. For some weird reason, I just don’t think about coupons when it comes to buying things. My wife, however, has quite the talent for couponing! And thank goodness, because her effort in this arena reduces our monthly expenses by hundreds of dollars.

The good news is, couponing is not as time consuming as it once was. Nearly every store has their own coupon app, and beyond that, there are so many websites you can use to find discounts on just about everything you can buy.

21. Buy Groceries Online

One of my biggest spending temptations is food at the store. If I step foot in a grocery store with anything less than a full stomach, our bank account is in serious danger. Plus, I am in for a week of bad eating, because I head straight to the bakery section, or the Oreo aisle.

I am helpless to all the tasty temptations around the store.

So, if you are like me and want to avoid overspending at the grocery store, then you should consider buying your groceries online and just picking them up. That way, you never have to step foot in the store. You won’t be tempted by the smell of fresh doughnuts and coffee cake. And, you won’t end up wasting your paycheck on Pop Tarts, Pillsbury Cinnamon Rolls, and Oreos.

Mmmm… now I’m hungry.

Final Thoughts

Working to reduce your cost of living is a worthy financial pursuit. And the harder you work, the more impressive your results will be.

I mean, can you imagine if you got completely out of debt, lived on a budget, and employed just a few of the other tactics I covered in this post? There’s no doubt in my mind that you could save hundreds, or even thousands of dollars per month.

Now get out there and start cutting those expenses!

Do you have any other tips you would like to see in this article? Or, did any of these tips help you reduce your cost of living? We want to hear about it in the comments below. We love hearing from our readers!

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21 Ways To Reduce Your Cost Of Living | Be The Budget


Reduce Your Cost Of Living: 21 Simple Ways | Be The Budget

Zach Buchenau

About The Author:

Zach Buchenau is a self-proclaimed personal finance nerd. When he isn't writing about budgeting, getting out of debt, making extra money, and living a frugal life, you can find him building furniture, fly fishing, or developing websites. He is the co-founder of BeTheBudget, and Chipotle's most loyal customer.

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