When you are trying to pay off debt, put more money towards retirement, or have a little less financial stress, one of the first things to think about is how to lower your monthly household expenses.
I’m not advocating for extreme frugality (I’ve done it before and it’s tough), but I know that there are some easy ways to lower your bills. I also realize that it’s easy to let your spending get out of control, and sometimes you need to rein it in.
With the ideas I’m about to share, you can find more money in your monthly budget. Pair that with a side hustle, and you can make some serious changes in your life.
Here are 29 easy ways to lower your monthly household expenses
Save money on home expenses
For many people, mortgage or rent qualifies as their most significant monthly expense, but there are lots of additional costs that are factored into where you live.
1. Refinance for a lower mortgage interest rate
Depending on when you purchased your home, you might be able to refinance your mortgage at a lower interest rate and save tens of thousands of dollars over the course of the loan.
Here’s an example with $200,000 mortgage with a 30-year-loan term:
- You pay $186,511.00 in interest at a rate of 5.00%
- You pay $133,443.00 in interest at a rate of 3.75%
The 1.25% interest rate difference saves you over $50,000, and you can usually find lower interest rates if you refinance for a shorter loan term. A shorter-term may not lower your monthly payments, but it will save you considerably more over your loan term. Using the example above, refinancing at a rate of 3.75% for 15 years reduces the total interest to $61,800.
Mortgage interest rates are mostly based on factors you can’t control, like the federal rates fund and the overall economy, but your credit score plays a big part in getting the best and lowest rates. Those rates go to people with credit scores of 740 or higher.
2. Move to a smaller home
Downsizing to a smaller house often reduces your monthly expenses in several different ways. You save on heating, cooling, and electricity. Smaller homes are often less expensive, and that can cut your mortgage and property taxes. There’s also the fact that you have less physical space to fill with stuff.
If you ever wanted to remodel, it will cost less with a smaller house. You’ll need more flooring, countertops, cabinet, and paint to fix up a bigger house.
You could even go wild with downsizing and move into a van. Sara from Tiny Van Big Living wrote about #vanlife and debt in How Living in a Van is Helping Me Conquer $172,000 of Debt. Her story is amazing!
3. Stop blasting the heat and AC
I live in Texas, and the summers are hot. I mean really freaking hot. It’s tempting to blast the AC all summer long, but I keep myself in check by thinking about what it will do to my electric bill. The same goes for your gas bill in the winter if you try to turn your house into a sauna.
My wife and I recently installed this Ecobee smart thermostat to help us manage the temperature in our house. Smart thermostats can help you reduce your monthly heating and cooling costs because they raise or lower the temperature in your house while you’re away. That might not sound like a big deal, but it can lead to a 12-23% savings on heating and cooling.
4. Get better light bulbs
About a year ago, we switched every single bulb in our house to LED bulbs, and we immediately started feeling the savings.
Even though the initial investment is high, it could be a few hundred dollars depending on the number of LED bulbs and type you get, you will see your energy bill drop – LED bulbs are 80% more efficient than incandescent ones.
Read more at Are LED Light Bulbs Worth the Money (Yes and Here’s Why).
5. Lower the temperature of your water heater
This is a small savings, but it’s worth bringing up. Lower the temperature of your water heater by just a little bit, and you can save money on electricity or gas (depending on how your water heater works).
You’ll also stop burning yourself in the shower. You’re welcome.
6. Stop outsourcing
There are pros and cons to outsourcing basic home tasks like cleaning, lawn care, or laundry services. It can free up time that you can devote to running your business or growing your side hustle, and that can help you make more money. But on the flip side, outsourcing too many things can get really expensive.
You can weigh up the pros and cons by thinking about the following things:
- How much does the service cost? Professional services generally cost a little more, whereas independent contractors may cost less.
- What is your time worth to you? Consider the opportunity cost – if it costs $25/hour for a clearing service, but you can make $50/hour with your side hustle, then it might be worth paying for the service.
- What is your budget? If you have a lot of debt or are struggling to make it to the next paycheck, outsourcing probably isn’t the best use of your resources.
Save money on food expenses
Food is a basic necessity and one of the most common monthly household expenses. But it’s a hard one to cut because food is so good. Fortunately, I have several tips that will keep your food budget in check.
7. Be a smarter grocery shopper
After you’ve made your budget and decided how much you can spend at the grocery store each week or month, here are some tips that will help you stick your budget:
- Pay attention to unit costs
- Always eat before you go to the grocery store
- Buy generic brands
- Buy in-season produce
- Avoid pre-cut, pre-packaged food
- Remember the saying that “eye level is buy level”
- Join your grocery store’s loyalty program
- Always shop with a grocery list
- Use an app like Ibotta to earn cashback when you shop
8. Rethink the way you go out to eat
The obvious tip here is that you can save a lot of money if you stop eating out so much, and it’s true. I mean, if you and your spouse average $40 on your restaurant bill and you go out for dinner twice a week. Over the month you’ve spent $320 on dining out. If you eat out one less time per week, you’re saving $160.
But, you can save money by eating out for lunch instead of dinner, going for happy hour specials instead of a full meal, not ordering alcohol or soda, using coupons, and splitting a meal.
I like to save going out to eat as a reward, and it’s not something my wife and I do when we’re too tired or busy to cook. Keeping it as a treat makes us appreciate it more, and we can also plan out nice meals.
9. Start meal prepping
If you are finding it difficult to make lunches or dinners every day, take a few hours at the beginning of each week (or during the weekend) to prep the majority of your meals. You’re essentially making grab-and-go meals that just require reheating. It’s also great for portion control… an added bonus.
Meal prepping is also good for those nights when you’re too tired to cook – see the last tip.
Learn more at 9 Meal Prep Tips & Ideas to Help You Save Money.
10. Stop wasting so much food
I am guilty of this one, but I still hate, I mean HATE, throwing food away. There’s the guilt aspect… your mom telling you that there are starving kids in the world. But wasting food means you are throwing money away.
If you get in a regular cycle of not using everything you buy, then throwing food away is causing you to spend more on your groceries – it’s just that simple.
You can start wasting less food by coming up with some meals that use food that’s about to go bad. Think stir fry or casseroles for vegetables and smoothies with ripe fruit.
Learning how to store food properly means less will go to waste. Here are a few tips for storing food for maximum freshness:
- Put potatoes, onions, and garlic in a cool, dark place
- Lettuce and other leafy greens need to be washed, stored in a plastic bag with a dish towel or paper towel, and put in the crisper drawer
- Don’t store bread in plastic – it’s best if you keep it on the counter or in a cool dry place
- Apples, pears, celery, berries, grapes, cherries, zucchini, squash, and green beans should be stored in a drawer in your fridge
- Bananas, citrus, and tomatoes are best kept on the kitchen countertop
Save money on auto expenses
If you’ve been around M$M for any length of time, you know I have strong feelings about cars – buy used and Yukons for life. But I will keep my feelings to myself so I can help you reduce one of your most common monthly household expenses.
11. Buy used
I know I said I was going to keep my feelings about cars to myself, but this one is big. Cars are depreciating assets. A brand new car loses 20% to 30% of its value in the first year, and it loses around 60% of its initial value in the first five years.
Buying a used car means you are banking the hit that someone else already took. It also saves you on insurance, taxes, and interest charges.
12. Drive a car with lower gas mileage
Buying a car that gets better gas mileage is one option, but it might not be for everyone. You can also save money on fuel by:
- Making sure your tires are properly inflated
- Keep a safe distance between you and the car in front of you so you brake less and don’t have to accelerate as often
- Turn off your car if you will be idling for more than a couple of minutes
- Engines that are regularly maintained burn less fuel, so keep up with routine maintenance
- Follow the speed limit
13. Call your car insurance company
Shopping around for lower rates on car insurance or negotiating with your current insurance provider is an easy way to save money each month. The problem is that many people have just accepted their rates and never try finding something less expensive.
I call my insurance company every few months to see if there are any lower rates, and the last time I called, I was able to negotiate for a reduction that saves me $40/month. Someone on my team recently switched companies, raised their deductible, and is now saving more than a $1,200 year.
To lower this monthly expense, start by calling your insurance company and seeing if there are any discounts you can take advantage of – good driver, customer loyalty, take a defensive driving course, etc. There are normally better rates if you bundle your homeowners and auto insurance, so ask about that too.
Raising your deductible lowers your premium, but you should make sure you have that amount saved in the bank if you get into an accident. And you might be able to save money by paying your premium every six months to a year, instead of monthly.
And if all else fails, shop around for lower rates.
Save money on debt expenses
Ughhh… debt.
Debt is a major problem, and it’s become one of the most common monthly expenses for many people. It causes financial stress, it’s expensive, and it prevents you from working towards long-term financial goals like retirement.
14. Refinance your student loans
Your student loan debt is most likely a bunch of smaller loans, each at their own interest rate. Refinancing your student loans is a process that bundles up the individual loans in one lump sum, then borrowing that amount from another lender at a new rate.
It can simplify your payments, but the real benefit is if you’re able to refinance at a lower rate. Some people can end up saving thousands of dollars throughout their payoff.
If you’re interested, I highly recommend refinancing with a company like Credible. You can learn more about the student loan refinancing process and whether or not you’re a good candidate in The Ultimate Guide to Refinancing Your Student Loans.
15. Call your credit card company to negotiate your rates
If your credit score and payment history is decent, you might be able to save on your monthly credit card bills by calling to ask for a reduced APR. This might seem like a negligible amount of money, but over time it’s those little things that contribute to your financial well being.
Another option is to research balance transfer cards. These cards work by allowing customers to transfer over high-interest rate credit card debt to a card that has a 0% interest rate for a limited period – sometimes as long as 18-21 months.
The best cards have low or zero balance transfer fees and no annual fees, but they’re reserved for people with the highest credit scores.
Learn what to expect with balance transfer cards, how they can save you money, and tips for using them in Best Balance Transfer Cards for 2020.
16. Really focus on your debt
The reality is that debt is always going to make up a good portion of your monthly expenses if you never seriously focus on paying it off.
Paying off debt can take some major sacrifices – I lived with my in-laws and practiced extreme frugality to pay off my $40,000 in student loan debt in 18 months. It was really freaking hard, but it’s one of the best things I’ve ever done.
Destroying my debt set me on a track for quitting a job I didn’t love, launching this site, building a second business, and even allowed my wife to retire before she was 30. One of the biggest rewards is less financial stress overall.
To start focusing on paying off debt, you need to stop thinking that living with debt is okay. Debt has become normalized as we use it to upgrade to shiny new phones, buy a brand new car every few years, and pay for stuff we don’t really need.
You have to stop thinking that it’s okay to keep taking on more debt.
Here are the steps I recommend after that:
- Start an emergency fund. Even just $500-$1,000 saved for unexpected expenses can prevent you from taking on more debt. You’ll want to add to this fund once you’ve destroyed your high-interest rate debt.
- Track your spending and create a budget. You’ll get a good sense of how much you currently have to put towards debt and which expenses to cut.
- Pick a debt payoff strategy. The debt snowball and avalanche are two different debt payoff strategies that explain the most effective way to make extra debt payments. It can help you save money on interest and accelerate your payoff.
- Increase your income. Because there is only so much you can cut from your budget, making more money gives you options. Just think about the dent you can make in your debt if you had an extra $500-$1,000 more each month to work with.
Don’t forget to celebrate along the way. Paying off debt is exhausting and stressful, and you need to celebrate when you hit a milestone. Treat yourself to a nice (but inexpensive) bottle of wine, night out with friends, etc.
Save money on entertainment expenses
Even when you are lowering your most common monthly household expenses, you’re still going to need to find ways to relax and unwind. I do this with wine and golf (I don’t recommend golf if you’re looking to cut your costs), but we all have our thing.
But there are ways to cut common entertainment costs so you can still have fun while saving money.
17. Get rid of cable
Cable TV easily costs $75-$100 a month, but there are a growing number of streaming services that offer the shows you want at a much lower price.
Netflix continues to be a popular option, but if you want your favorite cable networks without the high cost, check out Sling TV. There are three different levels of service that run from $30-$45/month.
Check out more options at 17 of The Best Cable Alternatives for 2020 (Some are free!).
18. Find and cancel unused subscription services
Have you started to notice how many subscription services there are? Razor delivery, beauty bags, meal boxes, apps, online fitness studios, game boxes, crafts, etc.
The subscription model is convenient for customers, and it often provides a high value for a small investment, but the problem is that subscription costs can easily add up. And it’s especially dangerous if you’re not using services anymore and forget to cancel them.
To cut these monthly expenses out of your budget, go through your bank and credit card transactions to see if there’s anything you’ve forgotten about, then cancel the services you aren’t using anymore.
You can also try a service like Truebill or Trim – these are apps that find and cancel services for you. They can also negotiate for lower rates on cable and telecom services, and both have budgeting functions.
Learn more about these apps in Truebill Review 2020 | Save Money with Less Effort and Trim App Review 2020 | An Easy Way to Save Money on Bills.
19. Find the free stuff
I want you to do something right now.
Open a new tab on your browser and type “free things to do in [name of your city].” I promise that you will immediately get a list of options. You can find things like:
- Outdoor concerts
- Free days at local museums
- Hiking trails
- Storytime events for kids
- Farms that are open to public
- Historic sites
- Sculpture parks
- Festivals
Your local library is another great free option, and most libraries lend out more than just books. I’ve seen libraries lending out telescopes, museum passes, board games, art supplies, power tools, musical instruments, fishing poles, video cameras, digital cameras, video game consoles, and more.
20. Say “no” to your friends
This might sound like a weird one, but hear me out.
When I was paying off my student loans, one of the hardest things I had to do was to start saying no to my friends. I was invited out for pub crawls, basketball games, happy hours, charity events, etc. But I couldn’t go commit to all of those things and pay off my debt.
I hated saying no to my friends, but I was honest about my goals, offered up free alternatives, and they understood.
You don’t need to say no to everything, but understand the limitations of your budget and consider saving up for these kinds of expenses with a sinking fund. Sinking funds are a strategic way to save for irregular expenses, annual ones, or saving up to make big purchases.
Save money on healthcare expenses
I’ve talked to many, many of my readers who say that the cost of health care has gone beyond just one of their most common monthly household expenses, to actually become their largest.
21. Raise your deductible
The deductible on your health insurance is the amount you pay out of pocket before your insurance plan pays. And just like other forms of insurance, raising the deductible on your health insurance can lower your monthly premium.
This might not be an option for your plan, but it’s worth researching. You’ll want to think about your ability to pay the deductible if you incurred a major medical bill.
22. Start going to the doctor
Well-visits, or annual check-ups, are the services your doctor provides to keep you healthy. It’s a type of preventative care that is intended to update your vaccines, do blood work, and to just check on things before they become major issues… major issues mean major costs.
At the very least, see your doctor once a year for these visits. They’re covered by most health care plans, so there’s really no reason to ignore them.
23. Get to know your health care plan
Health insurance plans are expensive and confusing and all of the literature they send you about updates can easily end up in the recycling. But before you toss that stuff out, read your coverage options to know which doctors to see, when you should go to the ER vs. urgent care, etc.
While I know it’s boring stuff to read, knowing your plan can save you money.
24. Try a health care sharing ministry
Health care sharing ministries are faith-based health insurance alternatives that allow members to share medical costs among one another. You and the rest of the members pay a monthly membership fee that is pooled together and then used to cover a portion of members’ medical bills
It isn’t the same as health insurance – health sharing ministries are for like-minded people who have made a commitment to live a spiritually and physically healthy lifestyle.
Health sharing ministries save members money by offering sharing for healthy individuals – because it’s not insurance, they reserve the right to deny coverage for pre-existing conditions or not cover bills associated with an unhealthy lifestyle, like smoking or drinking too much.
The reality is that they’re not for everyone. But, my wife and I have been using a health care sharing ministry for almost three years now, and we’ve been really happy with it and how much we’re saving.
A healthier pool of people = lower health care costs. You’re also considered a cash paying customer in the eyes of providers which generally gets you lower rates.
There’s a lot to think about, but you can learn more in Is a Health Care Sharing Ministry Right for You? I explain more about how these groups work and compare three of the most popular options.
Miscellaneous monthly expenses to cut
This is catch-all for anything that didn’t really fit into the categories above but still makes up some of your most common monthly household expenses.
25. Reduce your travel expenses
Travel might not be something you do every month, but it’s something you have to plan in advance and save up for. One of my favorite ways to cut travel expenses is to use credit cards for travel hacking.
Travel hacking is basically earning credit card reward points or miles that can be redeemed for free flights and hotels. You need to be good with credit cards to make it work… you pay your balance in full every month. But it’s surprisingly easy to do, and I explain how to get started in A Beginner's Guide to Travel Hacking: How to Take Your First Free Trip.
26. Rethink your cell phone bill
Cell phones are pretty much necessities at this point, and every family I know claims this as one of their most common monthly household expenses. What many people don’t realize is that there are some great discount cell service providers that can lower your cell phone bill to $30/month or less.
Don’t believe me? Check out your options in The Best Cheap Cell Phone Plans of 2020.
27. Buy used
I’ve already mentioned buying used cars over new ones, and the same goes for all sorts of things around your house – appliances, books, electronics, furniture, clothes, shoes, sports equipment, musical instruments, baby equipment, toys, home decor, household goods, etc.
Every day, people are getting rid of perfectly good used things for brand new versions of them. Most of the time this stuff is in really good shape, people just want something new.
Facebook is a good place to look – buy/sell groups, your local Buy Nothing chapter, and Marketplace. There are also apps like Decluttr, Poshmark, 5Miles, LetGo, etc. These are the same apps that are good if you want to make money selling your stuff. Don’t forget about Goodwill, resale shops, and garage sales.
28. Find a better bank
One of the ways that brick-and-mortar banks make money is by charging their customers fees for all sorts of things – minimum balance charges, ATM fees, lost card fees, foreign transaction fees, monthly service fees, etc.
You can virtually eliminate those fees and save money at a higher interest rate by switching to an online bank. Even though these banks are online, you can still find nationwide ATM access. Learn more at Best Online Savings Accounts for 2020.
29. Quit the gym
Between inexpensive home workout equipment and YouTube videos, you can get a great workout at home without paying a monthly gym membership fee. Even cheap gyms, ones where you pay $10-$20/month, get to be expensive if you’re not using them.
But keep in mind that it’s easy to fall for fancy equipment and workout gear – you can workout in regular clothes, old tennis shoes, and using stuff around your house as workout equipment.
The final word on reducing your monthly household expenses
The reason you’re reading this article is because you’ve already decided that you want to make a change and lower your bills. That’s Step 1, but Step 2 is taking one of these suggestions and putting it in action. That’s your challenge now.
It’s not enough to want to change your financial life for the better. You have to make it happen.
Use one of these ideas, and take the money you’re saving each month and make an extra payment towards your debt. Or maybe you put that money in your retirement fund. Whatever your reason for finding this article is, it’s on you to make the next move.
About Millennial Money Man
Bobby Hoyt is a former band director who paid off $40,000 of student loan debt in 18 months on his teaching salary and then left his job to run Millennial Money Man full-time. He helps other Millennials earn more through side hustles, save more through budgeting tools and apps, and pay off debt. He is a personal finance expert who has been seen on Forbes, Reuters, MarketWatch, CNBC, International Business Times, Business Insider, US News, Yahoo Finance, and many other personal finance and entrepreneurship media outlets.
Comments
Tyler
I second the motion on the health-share program. We switched about 4 years ago and not only have we saved a ton on premiums, but we’ve saved a buttload on out of pocket expenses too (I have 4 kids). Also, another tip I use regularly is just call the tv or internet provider I’m with and ask them to lower my bill and they will usually give me a credit for a 6 months or a year.
Millennial Money Man
So far it’s been great for us! My wife had used it more than I have, but overall we’re happy with it. It certainly beats paying way more for a terrible health insurance policy that didn’t seem to cover anything.
AB
Here in San Antonio, Spectrum is the internet king. We did their introductory rate for a couple years, then it dropped off and left us with a $70/mo bill for the internet. I thought it was way too much but Spectrum wouldn’t budge on their price so we went with Spring Unlimited Plus and do internet through our phones via HotSpot. The Sprint plan gives us 50 GB / line / mo which is used for streaming and gaming, and all data consumed by the phone does not count towards the 50 GB. So far this has worked for us, but we can definitely tell that Sprint is underdog in cell service.
Millennial Money Man
Yeah that’s tough – in my area there are really only two options for internet. What I have now is alright, but I have had to call in and complain several times and fight them on pricing.
Quick tip for online chats with internet companies – see if you can have the agent send you directly to their “customer retention” chat. They tend to be easier to work with!
Isaac Williams
At the beginning of the year, we shopped around for car insurance, and homeowners insurance and are going to save almost $1000 this year! We always limit ourselves to only going out to eat a couple times a month, but definitely guilty of making a few extra trips to local craft breweries when we know we really shouldn’t ?. We also just canceled cable as well.
Allison
Recently I got a renewal bill for auto insurance. It jumped $160/year. When I called, they confirmed what I expected to hear: it’s my increased mileage. So I’ll accept that, since the mileage is because of commuting 5days/week to the higher paying job that allowed me to hit a savings rate of 50% in 2018 (best ever by FAR) but I’ll go back to HR & look into the ride-sharing program offered by my employer. Maybe I can give up my autonomy a couple days a week.
Takeaway: lower annual mileage will get us all a lower premium.
skydiver
Great tips. One point I disagree on is the claim & assertion that Walmart or low cost stores have crappy clothes that fall apart in no time or in 6 months. I always find this a mute point & completely invalid but it seems to get regurgitated on these lists of what not to buy & waste money on, etc. despite having no data or real life evidence of such claims. Idk what you have to be doing to your clothes for them to fall apart but if they are falling apart, it’s due to user error. I have clothes & shoes from Walmart, Family Dollar, Dots, Catos, Payless Shoes & all kinds of non-name brand stores that I’ve had literally for over 15 yrs that haven’t deteroriated or fallen apart & still look great! Like anything in life, if you take care of it properly & use it properly, it will last. I treat everything I own regardless of the price I paid, like it cost something, b/c it did, my hard earned income. If your walmart clothes or low end budget store clothes are falling apart, the problem is you, not the clothes. If you follow the care tag label, wear them as intended, launder them exactly as told to & treat them like something of value, they will last. The real problem is the majority of people, and dare I say, millennials (I am one) & esp. men, don’t read & could care less what a tag says or what material something is & don’t know how to properly do laundry or launder clothes. Heck, most people don’t even separate their clothes to wash them! I think we need to stop blaming stores for people’s own negligence & ignorance in how to take care of things we invest in & buy. It’s easier to blame it on being cheap than to take a look at ourselves & our own inabilities, defaults & lack of knowledge or laziness. Properly take care of anything you purchase clothes wise & I guarantee your clothes will begin to last longer, look better & hold up overtime as intended. Ignore the care tag label, save time by doing it your own way & yes, anything you wear will eventually fall apart quicker unnecessarily. This should be commonsense but sense is not common anymore.