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!

white desktop with pen and candle and text overlay "how to cut spending to bare bones"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.

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 win the lottery to reach financial 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.

A Secret to Cut Everyday Expenses

Here's the secret to cut everyday expenses in your household: get rid of the vampires trying to suck your bank account dry.

I'm not talking about your kids, nor those annoying people that keep calling for you to donate to your alma mater (even though you're still paying down your student loans), nor the IRS.

No. It's the elusive, but-ever-present “Maintenance + Upkeep” Vampire.

I don't really remember the time period when I started thinking that a purchase was a one-and-done thing. But I definitely remember the day when the fact that it typically isn't smacked me in the face.

So let’s talk about what sort of products you want to avoid buying (or ones you need to get rid of and replace with others that don't require upkeep costs) so that you can cut everyday expenses.

Budget Vampire #1: Belongings with Lots of Moving Parts

Things with lots of moving parts, all interconnected and necessary for the functioning of the item, have a much higher probability of breaking down. Like electric toothbrushes versus manual ones. Or cars with lots of electrical systems that are great for the first several years, but promise some pricey bills after an accident or from normal wear and tear.

Your Garlic: Beware of movable parts. Of course, that's much easier said than done in our modern times. So what you want to be on the lookout for are really great warranty programs. This doesn't mean you have to buy expensive warranties; many credit cards offer extended warranties just for being a card member. Be sure to check into the details of yours and save receipts as necessary (I have a “receipts + manuals” file in my filing cabinet for this very reason).

Budget Vampire #2: Belongings with Frequent Replacements

Hello Brita Water Filter and the Swiffer Mop!

I thought once I had splurged on these sleek new appliances (I was in my early 20s just out of college, so they seemed like shiny appliances to me), that my investment was done. But anyone with a Brita or a Swiffer knows that the refills can be an endless money vampire. It really rubbed me the wrong way every few months when I had to dedicate more of my paycheck to disposable items just to be able to use my original purchase.

And then one day it dawned on me: after a year or so of buying these refills, I had paid MORE in refills than I did for the dang product! Light bulb moment right there (reminiscent of those BMG Music Club days of my teens).

Your Garlic: Sometimes it's better to pay a bit more upfront for a product that does the same thing, but does not need refills. Such as the Reveal Mop vs. the Swiffer Mop. It is about $10 more to buy, but the pads are washable, and the cleaning liquid container is refillable (we use vinegar and water in ours).

Budget Vampire #3: Belongings with Lots of Maintenance Needs

Pets are the best example for this category (vet appointments, flea medication, carpet cleaner, etc.); however, if you're like me, you consider pets family and not belongings.

So other examples can include cars (oil changes, annual registration/inspections, insurance, gasoline, etc.), or swimming pools (chemicals, water refills, liner repairs, etc.).

Your Garlic: See if there are maintenance plans included. Like when we purchased our central A/C and furnace, there were several cleanings included in the price. After that, definitely shop around for places that have opened up shop to complete this maintenance (typically cheaper than getting maintenance done by the original seller of the item).  

Bottom Line: you better figure in the maintenance and upkeep when you purchase items…which can cost even more than the product itself. Otherwise, prepare to have your monthly cash flow sucked dry!

The Proven Call Script to Cut Everyday Household Expenses

Looking to cut expenses to the bone? Then you've got to get around Switching Costs. These are the negative costs (monetary, psychological, effort/time based) a person incurs when switching suppliers. And many switching costs are in place for a reason; once companies have you as a customer they will do almost anything to keep you.

In both carrot and stick attempts at increasing the switching costs on their products, companies have instituted both early cancellation fees as well as promotional offers for signing you onto longer contracts. Perhaps you had to install a piece of equipment in order to get a supplier, and now you must make an appointment or return the equipment before cancelling a contract. Any sort of barrier between you and leaving your supplier is in the favor of the supplier.

These switching costs usually end up producing what I like to call a “mental barrier”. I know that I want to do something, I even know of the short-term and long-term benefits doing it could produce, but all of the complications have caused a muddy/cloudiness in my head towards it and therefore I don’t want to take any action on it today (turned into six months, one year, three years, etc.).

How long have you been meaning to shop around and switch your cell phone plan, cable, or internet provider to cut household expenses? How many more service calls must you make before you are ready to take on the switching costs and get out of your current contract? I have been thinking about the difference a day can make to your finances.

Not even an entire day, just four phone calls.

If you knew that making just four phone calls would most likely lead to long-term financial gains for you and your family, would that be enough to work through your mental barrier and make you take action?

Wondering how to save money?  And how to drastically cut expenses? It's much easier when you find extra cash using the 4 call scripts (really, cost cutting hacks) below.

How many more service calls must you make before you're ready to take on the switching costs & get out of your current contract? Click To Tweet

Phone Call #1: Cable/Internet/Home Phone

When was the last time you called your cable/internet/home phone service provider and asked for a discount? Sometimes you need to be sent to the cancellation department in order to get one, but the effort could save you a lot of money. In 30 minutes of my time, we saved $300 on our annual costs, were upgraded to the next set of channels for free for one year (with no further commitments), and were sent a $50 visa gift card!

Pay Per Half Hour: $350

Phone Call Script

Ring, Ring.

Customer Service Rep: How may I help you?

You: Hi! I’m hoping you can help me. My promotional period has ended, and I am wondering if I am eligible for a new promotion? OR I cannot afford my current cable/internet package and need to know if there is any way that you can reduce the monthly cost. OR I recently received an offer from [company] for [amount of offer]/Saw an advertisement from [company] for [amount of offer]. Can you beat this?

Rep: Can I have your account number please?

You: Sure. It’s XXXXXXXXXXXXX. A pause while the rep looks into your current plan.

Rep: How about we give you some extra channels, or higher internet speed?

You: That is wonderful. Thank you. But I also need to decrease the amount of money I am paying each month.

Rep: I’m sorry, there’s nothing else we can do.

You: Okay. I appreciate your time. Can you please transfer me to a rep in the cancellation department?

Rep: Sure. Have a nice day.

At this point, you can be sent to either a retention rep, a cancellation rep, or someone who acts as both.
Cancellation Rep: How may I help you today?

You: Hi, I’d like to have my monthly payment lowered. However, the customer service rep was unable to do this.

Rep: I see. What if we offered you $XX.XX for cable/internet for six months?

You: Is that the best you can do?

Rep: How about I extend that to 12 months?

You: Fantastic. Thank you so much for your help! What’s my current bill now, and what is it after this new deal? Also, can I please have your name and Agent ID number?

Rep: $XXX.XX per month to begin with, and $XX.XX now. My name is [name], and my Agent ID Number is XXXXXXXXX.

You: Great. Thank you very much for your help!

Phone Call #2: Homeowner’s/Renter’s Insurance

I was once told by an insurance agent that I should shop around for insurance quotes every six months. He explained that each company can offer you a different price because their pool of insured customers is unique to them. This also explains why one company may offer you a price at a significant savings from another company.

Back in 2010 I shopped around for better homeowner’s insurance and was able to get comparable coverage for $739 less than we were paying before. This took me about two hours on the phone.

Pay Per Hour: $369.50 (total is $739)

Phone Call #3: Auto Insurance

The first thing that you should know with auto insurance is that if you combine your auto insurance with your homeowner’s/renter’s policy you should receive a discount. Doing this is one of the reasons why we received the $739 in savings in the example above. If you have already combined insurance policies, then call your company and ask them if they can do better. If not, shop around for better quote(s).

Phone Call #4: Escrow Account

Paul and I have a VA loan, so we are required to keep an escrow account. If you have a conventional loan, you might want to find out if you can ditch your escrow. The benefit to doing so is that you can then use your money to earn you money. Instead of giving your mortgage company an extra few hundred dollars each month that is earning them interest, you can keep this in your own savings account and pocket the interest. True, this might just be $50 or so per year. But wouldn’t you rather pocket that instead of a bank?

Depending on your lender, you will need to meet a few requirements in order to stop using an escrow account, such as: your mortgage typically has to be at least a year old, you have to show that you have made consistently on-time payments, and your loan-to-value ratio typically needs to be under 75%.

Word of Warning: Understand that if you get rid of your escrow account, you will need to be diligent in putting enough money into savings each month (and keeping it there) so that when your property taxes and homeowner’s insurance bills are due you have the money.

Bonus: 4 Ways to Get through to a Live Customer Agent

You generally can't get anything outside-of-the-box done without talking to a live rep.

Fortunately, I've become somewhat of an expert on how to get through to a live person. Let me share some tips with you for how to get through all those phone systems to a live person.

  1. By Voice: Say “Agent” or “Representative” sternly into the phone. Many systems are voice activated through each of the menus. You can also say that you want to cancel the service, and your chances of being patched through to a live person will increase immensely (thanks, ADRealty!).
  2. By Keypad: Press “0” in a menu. This is typically a default to connect you through to a service rep. If it does not work in the main menu, try it in the second menu, and the third. In most systems, you do not need to hear all of the options of each menu in order to press a number.
  3. By Placing an Order: You do not actually need to place an order, but most systems will punch you through to a live rep if they know you are going to buy something from them. From there you can ask to be directly connected to whichever department you need. ***Word to the wise, once you find that most rare of species (a live agent), ask for their direct line number in case you are cut-off during the transfer.
  4. By Selecting Tech Support: Once again, I know that you do not need tech support, but select this option because you will most likely be put through to a live rep. Once there, they can directly transfer you to any department you need (and will likely be happy to pass you off).

Don’t Be Discouraged by Contract Agreements and Not Having Enough Time

The two main obstacles I can see to prevent you from making these phone calls are your contract provisions and not having enough time. I want you to know that there can be ways around both of these problems.

  • Get Out of Your Contract Without Paying a Penalty: For cell phone contracts where there is an early termination fee, know that you can use sites like Cell Swapper to find a willing person to assume your contract. There may be a small fee to do this, but it will be much less than the termination fee. For cars that are leased, you can use services such as where you can list your car and a buyer who is looking to take on your lease will hopefully find you. Note that you cannot do this without your lease company’s consent. A final way to get out of a contract for free is if your service provider changes its terms of services. Typically after they do so, you can void the contract within 30 days (this happens frequently so take a look at your last month’s bill for any indication that this has occurred).
  • Outsource Your Negotiations: If you are crunched for time, know that you can outsource this task. Kyle from The Penny Hoarder discusses a service that will make these types of phone calls and negotiations for you for the price of keeping half of any of the costs that they save you. Fifty percent is a lot of money to keep, but remember, you would not have gained anything without having someone make these phone calls for you.

Hopefully your phone calls won’t all feed onto each other, causing you to have to make several other phone calls. But if they do, know that the agony will only last today, and that the financial benefits will keep paying you back month after month. And if you are not looking to save yourself money, then why not do this and donate the monthly savings gained to a charity instead? It's the best way for how to cut expenses and save money at the same time.

If you take the time (or use a service) to cut your bills in a day, please share your progress, experiences (both good and bad), and any money saved in the comments below! It will be fun to see the total amount of money this community can save.

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

Cutting Expenses to the Bones — Our Own Examples

I wanted to give you all a rundown of 17 things we've done to cut expenses to the bone that have made an incredible change to our lives (to the tune of $111,350.19!).

  1. Ditch your bloated cell phone plan and enter the low-cost smartphone plan market (so you still get everything you want anyway, with an extra $40-$80 to play with per month!). Our (Annual) Savings: $410.76
  2. Take a stab at Travel Hacking for almost-free airfare (you still have to pay the security fees + an annual fee on the credit card you open). Our Savings (one trip): $1,200
  3. Nab that next juicy bank offer deal that comes your way (but only if it’s worth it). Our Annual Earnings: $200
  4. Play the Drugstore Game (without getting the Sunday Paper). Our Savings (since 2008): $3,500
  5. Fight your property taxesOur Savings (over three years): $612
  6. Start getting your oil changes for free by mystery shopping them. Our Annual Savings: $200
  7. Shop around for Homeowner’s Insurance. When we did, we found a policy that was $739 cheaper! Our Annual Savings: $739
  8. Chop your grocery bill down without coupon clipping, ad scouring, or store hopping. Over three trips, we shaved $76.43 off of our bill. Our Savings: $76.43
  9. Refinance a 30-year mortgage down to 15 years. We did this, going from 5.5% to 3.5%, for a total interest savings of $103,000Our Savings (over life of loan): $103,000
  10. Sign up to this free investment aggregator site to get the lowdown on how many fees you’re paying across all of your portfolio. You might be surprised, and compelled to move to lower-costing funds. Our current annual fees are $116.48, but I never would have known that without using this free service. Our Annual Savings: $0 (I did not move my money, just am paying attention to the fees now)
  11. Move your money to an interest-bearing checking account, and a high-yield savings account. Our Annual Savings: N/A
  12. Work on decreasing your water bill. Ours is generally around $30/month, and the average Houstonian’s is usually around $55/month. Our (Estimated) Annual Savings: $80
  13. Take the time to liquidate your electronic graveyard. We did, and reaped $107 in cash, $25.99 in tax deductions, $4 in Office Depot store credits, and 150 Recyclebank points. This was in 2012, so I’m sure we’re due for another liquidation. Our (Cash) Savings: $107
  14. Attack the cost of doing laundry in your household. My favorite way we do this is by making our own laundry detergent. Not only does it save us good money (we can wash 81+ loads for about $8.00), but it keeps some chemicals out of our home. Our (Estimated) Annual Savings: $25
  15. Get a little creative when you’re on a high-deductible health insurance plan so that you still get the care that you need, but without coming close to meeting the deductible for the year. Our Annual Savings: Hard to quantify, so I’ll skip
  16. Consider grocery shopping every other week instead of every week. Not only is this a money-saver, but it’s a time-saver as well. I estimate this alone has saved us about $100-$160/month from what we were spending when we shopped each week. Our Annual Savings: $1200

    This is the kind of stuff I get super-excited about. When I can take the same pile of cash as everyone else, and get more from it after researching new frugal living hacks and then show you how to do the same, I feel my purpose. Then seeing the tangible results by actually shifting money from checking into savings (a place we consider to be a black hole — stuff goes in but it doesn’t come out) completes everything in a very satisfactory way.

Let me know what you’re going to try next from the list above!

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Amanda L. Grossman is a Certified Financial Education Instructor, Plutus Foundation Grant Recipient, and founder of Frugal Confessions. Over the last 10 years, her money work helping people with how to save money and how to manage money has been featured in Kiplinger, Washington Post, U.S. News & World Report, Business Insider, LifeHacker, Woman's World, Woman's Day, ABC 13 Houston, Keybank, and more. Read more here.
7 replies
  1. Dot Reimer says:

    I am enjoying this site so much! I keep looking for a thread on getting out of PRIVATE student loan debt. Would love to hear from anyone that have some tactics that have worked for you!

    • Amanda says:

      I’m so glad you’re enjoying my site, Dot! You might want to look into The Debt Manipulator 3.0, which will definitely help you get out of private student loan debt (and lots of other kinds).

  2. Kevin Watts says:

    Thank you for this post. Very timely. I have been trying change my cell phone plan because of the terrible coverage. I am going to try cellphone swapper and see how it is

  3. Funny about Money says:

    “Switching costs”: great term!

    Boy, do I hate having to change providers!!!!! Those aggravating telephone trees just drive me nuts, and then when you reach a human being, half the time the person is clueless. Or, as in the all-time winner of the Aggravation Prize, the late not-so-great Qwest, they try to rip you off.

    Where insurance is concerned, I strongly recommend finding a good independent insurance broker. Met one such angel at a business networking group. He was able to save me over $500 on homeowner’s and car insurance, with a top-rated company. More recently, while stumbling through the bureaucratic labyrinth in search of a new Medicare Supplement carrier after Mutual of Omaha jacked up my rates by $433, I came across a broker who handles health insurance (not easy to find!). He found me a policy that costs less than what Mutual of Omaha’s original rate, through a company that a) has better ratings than Mutual of Omaha, b) has virtually no consumer gripes cluttering the Internet, and c) has actual customer service! Can you imagine? A person answers the phone!

    Wish there were agents to run interference with other kinds of large bureaucratic carriers.

  4. [email protected] says:

    I’ll get on the phone with our Internet provider first thing tomorrow–great point! I keep forgetting, so thanks for the reminder.

  5. krantcents says:

    Thanks for the reminder! I think we forget about some of these things as we do our other routines.

  6. cj says:

    Great and very helpful article. DISH Network would not give us a duscount so they got terminated. Now we have no TV, but we have a lot more productive time. On the other hand, we ditched AT&T for Virgin Mobile, as just on good example, and are enjoying a savings of $30/mth. This stuff is addictive and rewarding!


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