This is the time to learn how to drastically cut expenses and save money from wherever we can. The world is going through the pandemic and we are not sure when things will be normal.
The world economy is going through a tough time and it will bounce back but when, is not clear.
We should be ready to keep ourselves and our families protected to go through all this.
How to drastically cut expenses
Cutting everyday expenses is not rocket science but it requires little planning and discipline. It is very much possible to live with next to nothing.
The only thing is that you should learn to live that way. When you learn to differentiate your needs from your wants, you will need half of what you are spending now.
Benefits of cutting expenses
There are many benefits of living on less.
- You don’t have to earn more. Even if you will earn more in the coming time, it will help you build your retirement fund.
- More family time and more happiness.
- If you are earning better, you may be able to retire early.
- Better health because eating out expensive food will be out of your budget
These are only a few perks of cutting expenses. But one of the perks which I love is less workload. We are not alive to work. We work to live.
But this situation is different. Most of us have lost our jobs so cutting expenses is not a choice, it is a necessity. Moreover, if you will follow the plan to cut the expenses, you will naturally become conservative about money even when you will be earning more than now.
Creating a plan
The most important part is creating a plan. It will let you see the categories of your budget and where all your money normally goes. It will be impossible to make plans and execute when there will be no money.
So, make a plan today when you have some money in your hands. Make a list of all the subscriptions and contracts you have. This may include
- Gym memberships
- Cell phone contracts
- Magazine subscriptions
- Energy bills
- Other personal loans
These are the expenses which take a huge amount of money and few like mortgage are necessary. Do whatever you can to manage your subscriptions for now.
Stop spending money on anything not required
1. Stick to bare minimums
This pandemic has taught us many things. One of them is living basic things. We are not going out of our homes so no expensive outings. Eating out is reduced. Shopping centres are closed and we cannot go out shopping as usual.
But there is a choice of shopping online which can blow up your budget. Shopping for those items that are not necessary should be stopped and you should spend money only on basic needs.
There are few things which you can do to stop spending money while shopping online.
- Never shop when stressed or upset( you will definitely buy more)
- Delete shopping apps for now. Open the websites in the browser. This may help you drop the idea of shopping. Shopping with apps is so much easy.
- Check for deals and compare prices.
- Only buy something when you need and keep your money with you.
If you are able to pay your mortgage, shop for different lenders. Interests re all-time low so it is a good time to check with the lender with lowest interest rates.
✔If you are not in a position to pay your loan repayments, you can talk to your financial institutions for deferring the loan. This may help you go through a difficult time.
Also, you can choose the option of paying only the interest. It will help you keep some money if things go worse.
3. Cell phone bills
A cell phone which rebound by the contract will require you to talk to the provider. But if you are not in a locked plan, look for lower plans.
Check if you can go for a lower plan. As most of us are working from home, talking through the internet can solve the problem.
Moreover, your kids may be at bigger plans and you may think of cancelling their subscriptions as they are not going to schools anymore.
4. Gym memberships
Try to exercise without spending any money. You can jog outside, brisk walk and do other exercises at home. Letting go of your gym subscription can be hard( I know this from experience)
5. Cut your food spending
Food is one of the largest expenses in most of the households. It takes a big chunk of your budget. And the best part is the money spent on food can be reduced. Here are a few things you can do to reduce your food expense,
- Never ever waste leftovers. Get creative with food and try to create different recipes with leftovers.
- Meal plan in advance as this will help you buy only those food items that you will use anyway. It is said that an average person wastes 40% of the food. Stop any wastage.
- Cook from your fridge: Don’t go shopping for food for one week and cook from your fridge. This will let you use all of your food items lying at the back of your fridge. Most of the time we forget what we bought and they either deteriorate or expires.
- Compare the prices and buy generic and home brands wherever possible.
- Reduce your spending on ready to eat and cook your meals from scratch.
- Stop eating out. If you love to eat out, once in a while is okay but if you love to eat every now and then, think about it. You are spending a lot of money on eating out.
These will help you reduce your spending on food a lot.
6. Build for a rainy day
I know we are already going through a crisis, but we are getting some help from our governments. It is in our best interests to save whatever we can.
If you have a job now you are one of the luckiest people. Even then, be conservative with your money. The world is going through a crisis and anything may happen tomorrow. So get ready financially and save each whatever you can.
If you are already building an emergency fund, continue building it. It will help you have some peace of mind
7. Look for ways to earn money
Earning extra money can help you go through all these tough times. We are not sure of the outcome of this pandemic. Getting ready and starting some side hustles is the key to get through this. There are a few things you can do
- Start proofreading: Proofreading can be a great way to start a side hustle. If English is your first language, it can help you start an extra income stream.
- Start working as a Virtual Assistant: You can start working as a virtual assistant. Online businesses want help in admin work for running their businesses.
- Start a blog: This will not make you money immediately but can become an income source in coming time. You can learn it from my free email course here ( add email course)
8. Make use of whatever you have
Make use of everything you have. Instead of buying new, use whatever you have at home. Most of the time we buy a lot of clothes and other items which we never use.
This is the time to ditch this habit and start wearing clothes which we already have.
Most of us are not going to work, parties and outings and, so we don’t need a lot of new dresses. Most of the days are spent in PJs. So why to waste money on new clothes which eventually will be hanging in our closet.
9. Cancel all subscriptions
I know it can be hard to let all these go but believe me, keeping your money with you is more important than keeping all the subscriptions.
You may have subscriptions to streaming services like youtube premium, Netflix, Amazon Prime, Spotify. These may add up and can be expensive. Instead of having multiple subscriptions, go for the one you watch the most.
Cancel all unnecessary streaming services.
You may have direct debits for all of these, check your bank statement and cancel anything unnecessary.
If you are finding it hard financially, make some plans and cut all unnecessary spending. It will make you better equipped to go through all this.
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