Cutting Expenses to the Bone

Cutting expenses to the bone can help widen the gap between your expenses and your paycheck. Not only that, but it can create real momentum towards your savings goals!

As a nation, we stalk rock stars, super stars, divas, and obsess over their clothing, their cars, their homes, their lives because we want to touch a piece of that magic life. That magic life can be summed up in one word: independence.

Isn’t that what everyone strives for? To be able to do what they want, when they want to, and for however long they want to — period.

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We fantasize about it, we play games like “if I won a million dollars, I would fill in the blank.

But it’s a lot like fantasizing about marrying rich so that all of your worries will go away. It could happen…but not likely, and wouldn’t you rather be in love?

Here’s the thing: you don’t need to earn a huge salary or to win the lottery to reach this independence.

Going back to our foundational principle: you simply need to spend less than you earn or earn more than you spend.

Once you achieve this, you bank the extra and watch your lump of independence grow.

Are you looking at me like I have two heads? Perhaps throughout this series you have been thinking how on earth am I supposed to do that? For those of you barely making ends meet for whichever reason, you need to use the Jaws of Life to pry open some breathing space in that paycheck of yours. This breathing space is the beginning of you reclaiming your paycheck.

Truly though, it’s the beginning of you reclaiming your life.

The Reasons You're Living Paycheck to Paycheck

There are two different people who live paycheck to paycheck:

  • those who spend too much money
  • those who don’t make enough money to cover costs + save

Which category do you fall into? 

The majority of people who live this stressful lifestyle are spending too much money.

That's what I want to tackle in this article — cutting expenses to the bone. 

Here’s the thing: you work hard for your money. We all do. I'm not here to tell you how to spend your money, or that you should put it all in the bank and not spend a single dime on yourself — you can spend your money on whatever you would like to.

But if you do not have a savings account with an emergency fund in it, and you are not saving for your future retirement, then you are spending beyond your means.

Has your paycheck been mortgaged away before you even receive it? Is it just a piece of paper or a lump sum of money that promises to hold the creditors at bay, keep the lights on, and keep you driving to and from work for a month longer?

Don’t you want more for yourself and for your future?

Let's work on drastic cuts you can make to your spending so that we can increase the gap between your expenses and your paycheck. 

How to Drastically Cut Expenses

A lot of articles I write here are about fine-tuning your frugal habits, budget (here's some great budget advice), and spending. It’s as if I ask you to take a scalpel and slit open the tiniest of holes in your finances in order to reap that extra little efficiency.

But what if that is not enough?

What if after obliterating your drugstore bill, slicing your grocery bill, taking your entertainment bill down to a measly $0, and only cooking on an open fire out in your backyard you are still not getting anywhere?

It sounds like it’s time to take more drastic measures; you need to forget about the scalpel and break out the machete, cutting expenses to the bone.

We generally don’t like to talk about these options because they make for oftentimes drastic changes in a person’s lifestyle. But these options are on the table for almost everyone and they could make the difference between retiring in fear versus retiring with dignity, or even the difference between foreclosure/bankruptcy and financial independence.

Cut #1: Move to a Cheaper Place

Did you bite off more than you can chew at your current apartment/home? Or did your financial situation change since moving in? It will be much more difficult (and perhaps not wise with the down market) to get out of a mortgage and sell a home than to move out of an apartment at this point. Still, both should be mulled over as an option. When is your lease up? How much would it cost you to get out of your current lease? It may be worth it to break the lease and free up much-needed cash flow.

Cut #2: Get a Roommate/Rent a Room Out

My Aunt lives in a great area in a posh city, and has done so since her 20s. How did she afford this? She has rented out 1-3 rooms for the last twenty years. She gets to split the rent (and now mortgage as she owns it), utilities, electricity, etc. I had a roommate in my first and second apartment right out of college. While not ideal to many people, this could quickly free up cash for other expenses and allow you to stay where you are. If you live in a two-bedroom+ apartment, make sure your lease allows for a roommate, and discuss this with your landlord. Even though the market is in favor of landlords right now due to higher demands for renting, they might work with you to not lose a paying tenant (that is, if you have been a good tenant up until now).

Cut #3: Get a Second or Third Job

Cutting your spending can only take you so far if your income is too low to begin with. In some cases, you may actually just not be making enough money to cover necessities and any financial obligations you have. If picking up extra hours, taking on more responsibilities, a raise, or promotion has not worked with your current employer (all of these possibilities should be exhausted before taking on a second or third job), then it is time to see what you can fit into your schedule. Waiting tables, seasonal work, freelance work, mowing lawns, consulting: these are all options for you. It will be hard, but it should not last forever.

Cut #4: Get Rid of the Second Car

This will take some flexibility, faith, and the go-ahead from your work. Paul and I are considering this right now as the head gasket just blew on our new-used car (ouch!). We are attempting to get his work schedule changed to my compressed work schedule, or I will have to give up my compressed work schedule. If one of our employers can budge on this, then we are donating or scrapping our truck and going with just one vehicle. The savings should be immediate and huge: currently we each pay $200 per month in gas, and the truck costs approximately $58.00 per month to insure. Assuming a $50 savings in gas each month, we are looking at a savings of $1296 per year, on top of normal maintenance issues and oil changes.

Cut #5: Get Rid of Cable and Internet

Heck, you can even sell the television(s). Americans (and myself included, though we only have one small television in the living room—I refuse to have a television in our bedroom) have accepted a television and home computer as a right, not a privilege. That is why I’ve included this category in this machete article and not in a scalpel article. If you ever watch financial shows like ‘Til Debt Do Us Part, you see that a person can be completely in the dumps financially, eliciting all kinds of sympathy…and they are being taped in front of their large screen, plasma television. Get rid of it! If your finances and future security is at stake, how can you possibly justify cable and internet? Go to the library, use a friend’s computer, or use your work computer after hours if you have to.

Cut #6: Quit Cold Turkey

Smoking, alcohol, and any other addictive habits will suck the life out of your finances. I should know—Paul took up smoking again about six months ago when his job went out of control, and since December it has been sucking about $100 per month out of our budget. Yuck! Thankfully last weekend he quit cold turkey. It’s been a rough week to say the least, but he is doing beautifully and he made the right choice for his health, our life, and our finances.

Cutting Household Expenses – Real Life Examples

I’d like to highlight stories from others who have chosen to take drastic measures in order to free up more of their money. These are real life examples!

A note: what is extreme to someone may not be extreme to another person. Interestingly enough, I asked several bloggers for articles on their extreme financial moves, and there is quite a continuum on what is considered extreme. 

Extreme Grocery Savings

Faced with Graduate School, NoDebtMBA decided to start a $25-a-week grocery challenge. They eat almost vegetarian meals, stock up on staples, and eat at home for their meals. Six weeks in they were going strong.

Prairie Eco-Thrifter posed a grocery challenge to her husband to only purchase dairy and fruit from the grocery store so that they could eat through their excessive food supply; after 8 weeks, they had only spent $200 on groceries. Typically they spend $400 per month on groceries.

Here’s another great blog to check out that details their grocery shopping of just $30 a week in New York City. They offer weekly receipt breakdowns—pretty neat!

Extreme Cable and Cell Phone Savings

Money Cone was previously paying $720 for their cell phone plan, and now just pays $100 per year by switching to prepaid. Moneycone also cut cable television for a savings of $700 per year. They purchased rabbit ears for $10 which gives them 13 HD channels. They also use Hulu, Netflix, and Roku.

Putting 100% Money Down on Home Purchase

Money Saving Mom offers a great series on how her family saved 100% of the money needed to purchase their first home outright. This is a great series—everything that they did will certainly not work for everyone, but it is very inspirational. Some of the highlights include the wife being a stay-at-home Mom and the father attending and finishing law school debt-free due to their convictions, choices and opportunities.

Extreme Transportation Savings

Super Frugalette shared a car with her husband for six years, and discusses the pros and cons of ditching the second car in her article.

My husband, Paul, and I have shared a car now for over a year since we lost both our vehicles in Hurricane Harvey. We're a one-car family!

Extreme Christmas/Holidays/Gift-Giving Savings

The Saved Quarter spent a grand total of $68.75 on holiday gifts for friends and family last year, and has started her $100 Christmas Challenge again for this year. Her strategy includes mystery shopping, making homemade gifts, playing the drugstore game, earning free gift cards, etc

We’re cutting expenses to the bone so that we can actually start using our money for our savings and money goals. I like how this woman wrote a whole article on drastic measures you can take to cut expenses, and then gives real life examples of people who have done some of these things. Frugality tips | spending | cut expenses #savemoney #bills #nospend