Join our mailing list to find out more ways to make and save money with little time and effort.

How to Drastically Cut Expenses: 5 Easy Steps

Some of these links may be affiliate links and we may receive compensation when you sign-up for offers. See our disclosure policy. All information on this site is for educational and informational purposes only.

In a pinch, people will usually turn to ‘earn more’ while failing to give proper consideration to the other (usually easier) option – spend less. There are so many ways for you to reduce or cut out expenses that don’t involve you shunning entertainment, hygiene and fashion as you move into someone’s barn.

Step 1: Work Out What Your Expenses Are

The golden rule for expenses has always been to make sure you’re earning more than you’re spending. Same goes for saving, where you can only save as much as you’ve got left over after your expenses.

The first step to cutting down your expenses is to find out what they are. To do that, you’ll need to start tracking your expenses.

Keep track for a month or so to get a complete picture of your expenditure. A very short tracking period (a few days to two weeks) won’t provide a clear picture of your spending habits. It won’t even include all of your monthly direct debit subscriptions.

You can track your expenses the old-fashioned way, by writing them down, if that’s what it takes to keep you honest. Otherwise, there are a ton of intuitive apps that you can use to help with the seemingly onerous task of tracking.

Here are some we suggest:

Clarity Money:

Clarity’s website states that the platform helps to:

  • Bring more transparency to your spending
  • Uncover unwanted subscriptions and cancel them
  • Find credit cards and other services that you may be interested in
  • Add more organization to your financial life

The site itself provides helpful visuals that break down your saving, income and… spending. The graph views organise your spending so that it’s easy to compare your spending patterns over time.

This doubles as a convenient way to track your progress!

It has a bunch of other features as well – it can help you cancel your subscriptions, find your next credit card or assist with your savings accounts.


Mint is a great free option for those who think they’re likely to forget to include a lot of the smaller day-to-day expenses.

It links to your bank, then pulls transactions so that you have a complete list including all of the coffees you’d forgotten about. The program automatically lists and categorizes everything for you.

In addition to creating a budget, you can track investments, pay bills, check your credit score, and enjoy bank-level security. Running low on funds? You can opt into alerts so bills do not go unpaid. Went over budget on your last splurge? Mint will let you know.

We reviewed Mint a few years ago, you can read our detailed report here.


Dollarbird is an app that’s designed to help you track expenses from multiple sources at various times. You can check out what the impact of your expenses and income have on your future financial situation.

It markets itself as an app that’s designed to adapt to real-life situations with the help of AI.

The app helps you to understand your spending over time, telling you when you’ve overspent (compared to previous months) in certain categories.


Empower links to your accounts so that you can track your balances, transactions, due dates and monthly payments all in one place.

It works on the principle of tracking your spending to curb your spending so that you can save better.

The app presents transactions in a clean, clear and digestible interface. It then helps you to make more informed and intelligent decisions about your spending.

Empower is also a mobile bank that gives 1% cash back (up to $1,000) and 2.0% interest on their savings account. The bank has no fees or minimum balance and 25,000 free ATMs in the network.


The friendly folk at Wally have worked to create an app that helps you to understand where your money goes. It’s marketed as an app for those who aren’t particularly money savvy.

It tracks your expenses while trying to keep you on track with a budget. If you choose this app, don’t stress too much about creating a budget while you’re working out what your expenses are.

It’s known as Wally+ on Android.

There are, of course, pros and cons for each of these apps. Many of them are discussed in more detail in our blog post about 16 Free Budgeting Apps To Help You Stay On Track.

No matter which one you choose, remember, you need to include everything – I mean everything – when tracking your expenses. Be brutally honest, pretending you don’t spend money on your poodle’s nails will only harm your chances of success in the long run.

Be sure to include any miscellaneous extra expenses that crop up over the weeks. Even though you wouldn’t usually buy that particular item, it’s likely that there are some similar expenses that rear their head from time to time that you don’t pay heed to at the time.

I’d also suggest running an accounting style reconciliation yourself if the app you choose doesn’t do it for you. Check that your bank statement reflects what your expenses app is saying.

Bonus Tip: If your app doesn’t provide one, create your visual that gives you the full picture of where your money went for the month. The visual representation drives home the proportions of expenditure going towards certain things in a way that simply seeing the figures really can’t match.

Step 2: Separate Essentials From Non-Essentials

After you’ve got a fair idea of where your money goes, you should create a comprehensive and categorised list of all your expenditure. The apps above or the visual should cut down the amount of time that this will take.

I can really only give you guidance and sympathy at this point. One man’s essentials are another man’s waste, so to say. The list will be individual to you.

If you live your life as most people do, the bare-bones essentials are housing, food, travel for work, utilities, any medications you might need and some entertainment expenses so you don’t gnaw your fingers off from boredom.

Beyond these (although even these aren’t strictly necessary expenses), there will likely be some work and lifestyle-related expenses that you see as non-negotiables.

For some, it might be a sports channel subscription. This might result in savings in the long run, if the alternative is going to the match or watching at the pub.

If you’re not a die-hard fan, this should fall in the unessential pile.

If your list of essentials is too long, partner up with a frugal friend and get an outsider’s perspective. One major clue that an expense is probably not essential is if you’re embarrassed to discuss it with the said friend.

Step 3: Cull Anything You Don’t Use

This step is short and simple: anything that you don’t currently use needs to go.

Gym memberships you don’t use, subscription or membership fees for things you don’t use often enough to offset the cost (think eBay plus and the like) and Groupons that are only going to expire and go to waste are all obvious examples of things that fall into this list.

There are quite a few apps available now that can help you cancel the subscriptions you don’t need. In fact, many of them will even track down subscriptions that you’ve forgotten you’re paying for.

Check out TrimTrueBill, Bobby (IOS only at the moment) and Subscript Me (also IOS only). TrueBill is probably your most comprehensive free option.

Step 4: Stop Spontaneous Spending

At this juncture, I’ll ask you to have a look at your spontaneous spending habits. By take a look at it, I mean stop it. Immediately.

This step can be difficult for some because it’s so easy to feel like you’re missing out if you walk away from a good deal. If you are prone to shopping or couponing irresponsibly, it really is time to break the habit.

Spontaneous spending is a trap that advertisers rely on heavily. Everything in the stores that you visit has been carefully contemplated by advertisers in an effort to get you to buy more.

Same goes for online stores. “Other items you might like”, emails reminding you of flash sales with deals you’ll never get again (you will), they’re all designed to pique your interest and get your money.

So how do you break this pattern? Simple – you use lists.

If you need anything, write it on a list. Whenever you’re going shopping (including online), the list comes with you. You aren’t allowed to purchase anything that isn’t on the list.

If you do, you’re only cheating yourself.

Check out these convenient list apps that’ll help with this process:

Grocery Pal (IOS only), Out of Milk, Any List, and Favado (includes discounts and deals on things on your list).

This also applies to spontaneous couponing. You should not purchase anything just because you find a really good deal on it. If you haven’t got it on your list of things you need, do not spontaneously purchase it.

Let some time pass between when you see the sale and when you add it to the list. Even consider letting the sale end first. It’ll come around again, if it’s on your list next time, go for it.

Check out our post on personal accountability whilst shopping if you want some more guidance on breaking the habit.

Step 5: Tackle the Non-Essentials

After you’ve cancelled the unessential services that you don’t use, it’s time to take a look at your remaining non-essential expenses.

If you’ve got a lot, you should whittle the list down so that there are just a few remaining.

Really what’s required here is a lifestyle switch. You don’t need to forego fun. You just need to think about what you want to spend money on and finding the cheapest way to do it.

Here are some tips on what this looks like in practice:

  • Cooking your own dinner
  • Shopping for yourself
  • Dying your own hair
  • Doing your own nails
  • Being proactive and ensuring that you don’t end up paying late fees for anything.
  • Cutting down on expensive hobbies (you can hike, walk, run or swim in public lakes for next to nothing)
  • Getting rid of the expensive cable (you can probably find whatever it is you want to watch on a better subscription service for a fraction of the price – check out this guide here.)
  • Picnics and drinks at home instead of expensive nights out
  • Ditching the cinema for some home entertainment

We’ve written previously about 6 expenses you don’t need and can ditch now. If you’re reading this because you need to cut your expenses, make sure none of these apply to you. If they do – it’s time for them to go.

Step 5: Take A Look At The Essentials

This can be quite confronting for some people, but the reality is that if your essential expenses are not kept in check, you’ll never get a handle on your finances. Your lifestyle needs to be in proportion to your current income, not your future expected income.

I’ve broken your essentials into categories for your convenience:

Household cleaners and hygiene items

I’m not debating whether or not you need soap or shampoo, but do you need the most expensive brand? No, you don’t. In fact, you can make most of your own hygiene products and household cleaners using very cheap ingredients.

At a glance, here are some that I use every week:

Shampoo: bicarb soda and water.

Conditioner: apple cider vinegar and water.

Toothpaste: sea salt flakes, peppermint oil, bicarb, and coconut oil.

Facial scrub: tumeric, coconut oil, bicarb, and lavender oil.

Fabric Softener: white vinegar (also really good for stinky sportswear)

Draino: white vinegar and bicarb soda

Household cleaning spray: tea tree oil, water, vinegar.

Check out this website for a heap more inspiration or just Google recipes for whatever household items you spend way too much money on. It’s so easy once you get started.

Oh, and ladies, buy yourself some reusable sanitary items. They’re super convenient and will save you a ton of cash each month.


If you’re a bit more flexible with where you live, there are tons of options for free housing. This lifestyle is a bit more well suited to digital nomads or those who work from home – if that’s you, check out Trusted Housesitters or Mindahome to see if there’s something close to you.

Alternatively, if you are tied to an area by work or your family situation, you could find local housesits and rent out your place on Airbnb while you’re house sitting.

Unfortunately, if this won’t work for you, your only real option for cutting costs here is to downsize or move to a cheaper locale.

If you’re feeling sorry for yourself for needing to downsize, check out the Tiny House Movement Instagram for inspiration. There are some incredibly cool tiny houses out there that pack a lot of life into the small space they offer.


Most of us just sign up for a utilities package and never look back. The reality is that you can probably find a much better deal on your utilities.

Check out our post about saving on your utility expenses here.

Food & Drink

First of all, stop paying for water. The only excuse to pay for water is if you’re in a country where the tap water isn’t safe. Get yourself a drink bottle and get in the habit of carrying it. Fill it up from the tap when needed.

Food costs are difficult to get down, but you can do so by shopping seasonally, making more food from scratch, eating vegetarian a few times a week, and using coupons wisely.

Check out this post on 26 ways to save on food costs.


If you’re reliant on your car for work, your options are limited – but you do have options.

If you own a car that guzzles gas, consider selling it for something a bit more eco (and wallet) friendly. Check out our post about selling your car online if you want some guidance on getting the best price.

If you’re not reliant on your car for work, sell it. You can use a local car via a peer-to-peer sharing arrangement for those rare times you do need them. Check out Getaround, Turo and Maven.

If your lifestyle allows it, bikes are much cheaper than cars to purchase and run. They come with the added benefit of exercise and we all know that good health is cheaper than poor health.

What’s Next?

I have one final tip for you to keep your spending under control after you’ve got your expenses under control – pretend to have less money than you do. It’s a tip I swear by!

I automate my savings so that I never even realize the money is in my account.  Then, I use apps that mimic the tried and tested method of envelope budgeting to keep my spending in check.

Have a look at GoodBudget, Mvelopes or Simple Budget (Google store).

GoodBudget is the most comprehensive and well-reviewed envelope budget app on the market. Simple Budget is a little more user friendly and comes without the bells and whistles.

You can supplement your budgeting with $0-day challenges. These are where you challenge yourself to spend $0 on any certain day. Set yourself up with leftovers, ride the bike the work, go for a run afterwards – without spending an extra cent.

Earn Free Cash Online: The Survey Junkie survey site is a FREE survey site that pays you to take surveys online. There's absolutely no cost to join, and payouts can be made to either PayPal or for a gift card of your choosing. The best part? Some people are earning at a rate of up to $15 - $20 per hour. It's 100% free to join. We've partnered with Survey Junkie to give you a 25-point sign-up bonus when you register using our link and complete your initial profile information.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Secured By miniOrange